Senate Bill sb1712

CODING: Words stricken are deletions; words underlined are additions. 
    Florida Senate - 2003                                  SB 1712

    By the Committee on Banking and Insurance





    311-106B-03

  1                      A bill to be entitled

  2         An act relating to governmental reorganization;

  3         conforming the Florida Statutes to the

  4         amendment of Article IV, Section 4 of the State

  5         Constitution, in which the functions of the

  6         former positions of Comptroller and Treasurer

  7         were combined into the office of Chief

  8         Financial Officer, and chapter 2002-404, Laws

  9         of Florida, which reorganized certain

10         executive-branch duties and functions to

11         implement such constitutional amendment;

12         amending ss. 11.12, 11.13, 11.147, 11.151,

13         11.40, 11.42, 14.057, 14.058, 14.203, 15.09,

14         16.10, 17.001, 17.002, 17.011, 17.02, 17.03,

15         17.031, 17.04, 17.0401, 17.041, 17.0415, 17.05,

16         17.075, 17.076, 17.08, 17.09, 17.10, 17.11,

17         17.12, 17.13, 17.14, 17.16, 17.17, 17.20,

18         17.21, 17.22, 17.25, 17.26, 17.27, 17.28,

19         17.29, 17.30, 17.32, 17.325, 17.41, 17.43,

20         F.S.; transferring and amending ss. 18.01,

21         18.02, 18.021, 18.05, 18.06, 18.07, 18.08,

22         18.091, 18.10, 18.101, 18.103, 18.104, 18.125,

23         18.15, 18.17, 18.20, 18.23, 18.24, F.S.;

24         amending ss. 20.04, 20.055, 20.121, 20.195,

25         20.425, 20.435, 24.105, 24.111, 24.112, 24.120,

26         25.241, 26.39, 27.08, 27.10, 27.11, 27.12,

27         27.13, 27.34, 27.3455, 27.703, 27.710, 27.711,

28         28.235, 28.24, 30.49, 30.52, 40.30, 40.31,

29         40.33, 40.34, 40.35, 43.16, 43.19, 48.151,

30         55.03, 57.091, 68.083, 68.084, 68.087, 68.092,

31         77.0305, 92.39, 99.097, 107.11, 110.1127,

                                  1

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






    Florida Senate - 2003                                  SB 1712
    311-106B-03




 1         110.113, 110.114, 110.116, 110.1227, 110.1228,

 2         110.123, 110.125, 110.181, 110.2037, 110.205,

 3         112.061, 112.08, 112.191, 112.215, 112.3144,

 4         112.3145, 112.3189, 112.31895, 112.3215,

 5         112.63, 116.03, 116.04, 116.05, 116.06, 116.14,

 6         120.52, 120.80, 121.051, 121.061, 121.133,

 7         122.35, 125.0104, 129.201, 131.05, 137.09,

 8         145.141, 154.02, 154.03, 154.05, 154.06,

 9         154.209, 154.314, 163.01, 163.055, 163.3167,

10         166.111, 175.032, 175.101, 175.121, 175.151,

11         185.08, 185.10, 185.13, 189.4035, 189.412,

12         189.427, 190.007, 191.006, 192.091, 192.102,

13         193.092, 195.101, 198.29, 199.232, 203.01,

14         206.46, 210.16, 210.20, 210.50, 211.06, 211.31,

15         211.32, 212.08, 212.12, 212.20, 213.053,

16         213.054, 213.255, 213.67, 213.75, 215.02,

17         215.03, 215.04, 215.05, 215.11, 215.20, 215.22,

18         215.23, 215.24, 215.25, 215.26, 215.29, 215.31,

19         215.32, 215.3206, 215.3208, 215.322, 215.34,

20         215.35, 215.405, 215.42, 215.422, 215.50,

21         215.551, 215.552, 215.555, 215.559, 215.56005,

22         215.5601, 215.58, 215.684, 215.70, 215.91,

23         215.92, 215.93, 215.94, 215.96, 215.965,

24         215.97, 216.0442, 216.102, 216.141, 216.177,

25         216.181, 216.183, 216.192, 216.212, 216.221,

26         216.222, 216.235, 216.237, 216.251, 216.271,

27         216.275, 216.292, 216.301, 217.07, 218.06,

28         218.23, 218.31, 218.321, 218.325, 220.151,

29         220.187, 220.62, 220.723, 238.11, 238.15,

30         238.172, 238.173, 250.22, 250.24, 250.25,

31         250.26, 250.34, 252.62, 252.87, 253.025,

                                  2

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






    Florida Senate - 2003                                  SB 1712
    311-106B-03




 1         255.03, 255.052, 255.258, 255.503, 255.521,

 2         257.22, 258.014, 259.032, 259.041, 265.53,

 3         265.55, 267.075, 272.18, 280.02, 280.04,

 4         280.041, 280.05, 280.051, 280.052, 280.053,

 5         280.054, 280.055, 280.06, 280.07, 280.071,

 6         280.08, 280.085, 280.09, 280.10, 280.11,

 7         280.13, 280.16, 280.17, 280.18, 280.19,

 8         282.1095, 284.02, 284.04, 284.05, 284.06,

 9         284.08, 284.14, 284.17, 284.30, 284.31, 284.32,

10         284.33, 284.34, 284.35, 284.37, 284.385,

11         280.39, 284.40, 284.41, 284.42, 284.44, 284.50,

12         287.042, 287.057, 287.058, 287.063, 287.064,

13         287.09451, 287.115, 287.131, 287.175, 288.1045,

14         288.106, 288.109, 288.1253, 288.709, 288.712,

15         288.776, 288.778, 288.99, 289.051, 289.081,

16         289.121, 292.085, 313.02, 314.02, 316.3025,

17         316.545, 320.02, 320.081, 320.20, 320.71,

18         320.781, 322.21, 324.032, 324.171, 326.006,

19         331.303, 331.309, 331.3101, 331.348, 331.419,

20         336.022, 337.25, 339.035, 339.081, 344.17,

21         350.06, 354.03, 365.173, 370.06, 370.16,

22         370.19, 370.20, 373.503, 373.59, 373.6065,

23         374.983, 374.986, 376.11, 376.123, 376.307,

24         376.3071, 376.3072, 376.3075, 376.3078,

25         376.3079, 376.40, 377.23, 377.2425, 377.705,

26         378.035, 378.037, 378.208, 381.765, 381.90,

27         385.207, 388.201, 388.301, 391.025, 391.221,

28         392.69, 393.002, 393.075, 394.482, 400.0238,

29         400.063, 400.071, 400.4174, 400.4298, 400.471,

30         400.962, 401.245, 401.25, 402.04, 402.17,

31         402.33, 403.1835, 403.1837, 403.706, 403.724,

                                  3

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






    Florida Senate - 2003                                  SB 1712
    311-106B-03




 1         403.8532, 404.111, 406.58, 408.040, 408.05,

 2         408.08, 408.18, 408.50, 408.7056, 408.902,

 3         408.909, 409.175, 409.25656, 409.25658,

 4         409.2673, 409.8132, 409.817, 409.818, 409.910,

 5         409.912, 409.9124, 409.915, 411.01, 413.32,

 6         414.27, 414.28, 420.0005, 420.0006, 420.101,

 7         420.123, 420.131, 420.141, 420.5092, 430.42,

 8         430.703, 440.015, 440.02, 440.05, 440.09,

 9         440.10, 440.1025, 440.103, 440.105, 440.1051,

10         440.106, 440.107, 440.13, 440.134, 440.14,

11         440.17, 440.20, 440.24, 440.38, 440.381,

12         440.385, 440.386, 440.40, 440.44, 440.49,

13         440.50, 440.51, 440.515, 440.52, 440.525,

14         440.591, 443.131, 443.191, 443.211, 445.0325,

15         447.12, 450.155, 468.392, 468.529, 473.3065,

16         475.045, 475.484, 475.485, 489.114, 489.144,

17         489.145, 489.510, 489.533, 494.001, 494.0011,

18         494.0012, 494.00125, 494.0013, 494.0014,

19         494.0016, 494.00165, 494.0017, 494.0021,

20         494.0025, 494.0028, 494.0029, 494.00295,

21         494.0031, 494.0032, 494.0033, 494.0034,

22         494.0035, 494.0036, 494.0038, 494.004,

23         494.0041, 494.00421, 494.0061, 494.0062,

24         494.0064, 494.0065, 494.0066, 494.0067,

25         494.0069, 494.0072, 494.00721, 494.0076,

26         494.0079, 494.00795, 494.00797, 497.005,

27         497.101, 497.105, 497.107, 497.109, 497.115,

28         497.117, 497.131, 497.201, 497.253, 497.313,

29         497.403, 498.025, 498.049, 499.057, 501.212,

30         507.03, 509.215, 513.055, 516.01, 516.02,

31         516.03, 516.031, 516.05, 516.07, 516.11,

                                  4

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






    Florida Senate - 2003                                  SB 1712
    311-106B-03




 1         516.12, 516.22, 516.221, 516.23, 516.32,

 2         516.33, 516.35, 517.021, 517.03, 517.051,

 3         517.061, 517.07, 517.075, 517.081, 517.082,

 4         517.101, 517.111, 517.12, 517.1201, 517.1203,

 5         517.1204, 517.121, 517.131, 517.141, 517.151,

 6         517.161, 517.181, 517.191, 517.201, 517.2015,

 7         517.221, 517.241, 517.301, 517.302, 517.313,

 8         517.315, 517.32, 518.115, 518.116, 518.15,

 9         518.151, 518.152, 519.101, 520.02, 520.03,

10         520.07, 520.31, 520.32, 520.34, 520.52, 520.61,

11         520.63, 520.73, 520.76, 520.81, 520.83, 520.90,

12         520.994, 520.995, 520.996, 520.9965, 520.997,

13         520.998, 526.141, 537.003, 537.004, 537.005,

14         537.006, 537.008, 537.009, 537.011, 537.013,

15         537.016, 537.017, 548.066, 548.077, 550.0251,

16         550.054, 550.0951, 550.125, 550.135, 550.1645,

17         552.081, 552.161, 552.21, 552.26, 553.72,

18         553.73, 553.74, 553.79, 553.88, 554.1021,

19         554.105, 554.111, 559.10, 559.543, 559.544,

20         559.545, 559.546, 559.548, 559.55, 559.553,

21         559.555, 559.563, 559.725, 559.730, 559.785,

22         559.928, 559.9232, 560.102, 560.103, 560.105,

23         560.106, 560.107, 560.1073, 560.108, 560.109,

24         560.111, 560.112, 560.113, 560.114, 560.115,

25         560.116, 560.117, 560.118, 560.119, 560.121,

26         560.123, 560.125, 560.126, 560.127, 560.128,

27         560.129, 560.202, 560.205, 560.206, 560.207,

28         560.208, 560.209, 560.210, 560.211, 560.302,

29         560.305, 560.306, 560.307, 560.308, 560.309,

30         560.310, 560.402, 560.403, 560.404, 560.4041,

31         560.407, 560.408, 561.051, 562.44, 567.08,

                                  5

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






    Florida Senate - 2003                                  SB 1712
    311-106B-03




 1         569.205, 569.215, 570.13, 570.195, 570.20,

 2         574.03, 589.06, 597.010, 601.10, 601.15,

 3         601.28, 607.0501, 607.14401, 609.05, 617.0501,

 4         617.1440, 624.01, 624.05, 624.07, 624.09,

 5         624.11, 624.124, 624.129, 624.155, 624.19,

 6         624.302, 624.303, 624.305, 624.307, 624.308,

 7         624.310, 624.3102, 624.311, 624.312, 624.313,

 8         624.314, 624.315, 624.316, 624.3161, 624.317,

 9         624.318, 624.319, 624.320, 624.321, 624.322,

10         624.324, 624.33, 624.34, 624.401, 624.4031,

11         624.404, 624.4072, 624.4085, 624.40851,

12         624.4094, 624.4095, 624.410, 624.411, 624.412,

13         624.413, 624.4135, 624.414, 624.415, 624.416,

14         624.418, 624.420, 624.421, 624.4211, 624.422,

15         624.423, 624.424, 624.4241, 624.4243, 624.4245,

16         624.430, 624.4361, 624.437, 624.438, 624.439,

17         624.4392, 624.44, 624.441, 624.4411, 624.4412,

18         624.442, 624.443, 624.4431, 624.444, 624.445,

19         F.S.; amending and renumbering s. 624.4435,

20         F.S.; amending ss. 624.45, 624.4621, 624.4622,

21         624.464, 624.466, 624.468, 624.470, 624.473,

22         624.4741, 624.476, 624.477, 624.480, 624.482,

23         624.484, 624.486, 624.487, 624.501, 624.5015,

24         624.502, 624.506, 624.509, 624.5091, 624.5092,

25         624.516, 624.517, 624.519, 624.521, 624.523,

26         624.6012, 624.605, 624.607, 624.609, 624.610,

27         624.80, 624.81, 624.82, 624.83, 624.84, 624.85,

28         624.86, 624.87, 625.01115, 625.012, 625.041,

29         625.051, 625.061, 625.071, 625.081, 625.091,

30         625.101, 625.121, 625.131, 625.141, 625.151,

31         625.161, 625.172, 625.181, 625.303, 625.305,

                                  6

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






    Florida Senate - 2003                                  SB 1712
    311-106B-03




 1         625.317, 625.322, 625.324, 625.325, 625.326,

 2         625.330, 625.331, 625.332, 625.333, 625.338,

 3         625.52, 625.53, 625.55, 625.56, 625.57, 625.58,

 4         625.62, 625.63, 625.75, 625.765, 625.78,

 5         625.79, 625.80, 625.82, 625.83, 626.015, F.S.;

 6         creating s. 626.016, F.S.; prescribing powers

 7         and duties of the Department of Financial

 8         Services, Financial Services Commission, and

 9         Office of Insurance Regulation; amending ss.

10         626.025, 626.112, 626.161, 626.171,626.181,

11         626.191, 626.201, 626.202, 626.211, 626.221,

12         626.231, 626.241, 626.251, 626.261, 626.266,

13         626.271, 626.281, 626.2815, 626.2817, 626.291,

14         626.292, 626.301, 626.322, 626.361, 626.371,

15         626.381, 626.431, 626.451, 626.461, 626.471,

16         626.511, 626.521, 626.541, 626.551, 626.561,

17         626.591, 626.592, 626.601, 626.611, 626.621,

18         626.631, 626.641, 626.661, 626.681, 626.691,

19         626.692, 626.7315, 626.732, 626.742, 626.7451,

20         626.7454, 626.7491, 626.7492, 626.752,

21         626.7845, 626.7851, 626.8305, 626.8311,

22         626.8427, 626.8463, 626.8467, 626.847,

23         626.8473, 626.8582, 626.8584, 626.859, 626.861,

24         626.863, 626.865, 626.866, 626.867, 626.869,

25         626.8695, 626.8696, 626.8697, 626.8698,

26         626.870, 626.871, 626.872, 626.873, 626.8732,

27         626.8734, 626.8736, 626.8738, 626.874, 626.878,

28         626.88, 626.8805, 626.8809, 626.8814, 626.884,

29         626.89, 626.891, 626.892, 626.894, 626.895,

30         626.896, 626.897, 626.898, 626.899, 626.901,

31         626.906, 626.907, 626.909, 626.910, 626.912,

                                  7

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






    Florida Senate - 2003                                  SB 1712
    311-106B-03




 1         626.914, 626.916, 626.917, 626.918, 626.919,

 2         626.921, 626.931, 626.932, 626.936, 626.9361,

 3         626.937, 626.938, 626.9511, 626.9541, 626.9543,

 4         626.9545, 626.9551, 626.9561, 626.9571,

 5         626.9581, 626.9591, 626.9601, 626.9611,

 6         626.9621, 626.9631, 626.9641, 626.9651,

 7         626.989, 626.9892, 626.99, 626.9911, 626.9912,

 8         626.9913, 626.9914, 626.9915, 626.9916,

 9         626.9919, 626.9921, 626.9922, 626.99235,

10         626.99245, 626.9925, 626.9926, 626.9927,

11         626.99272, 626.99285, 626.99295, 627.031,

12         627.0612, 627.0613, 627.062, 627.0625,

13         627.0628, 627.0629, 627.0645, 627.06501,

14         627.0651, 627.0652, 627.0653, 627.06535,

15         627.066, 627.072, 627.091, 627.0915, 627.0916,

16         627.092, 627.096, 627.101, 627.111, 627.141,

17         627.151, 627.171, 627.192, 627.211, 627.212,

18         627.215, 627.221, 627.231, 627.241, 627.281,

19         627.291, 627.301, 627.311, 627.3111, 627.314,

20         627.318, 627.331, 627.351, 627.3511, 627.3512,

21         627.3513, 627.3515, 627.3517, 627.357, 627.361,

22         627.371, 627.381, 627.4035, 627.410, 627.4101,

23         627.4105, 627.411, 627.412, 627.413, 627.4145,

24         627.417, 627.418, 627.4234, 627.4236, 627.4238,

25         627.427, 627.429, 627.452, 627.458, 627.462,

26         627.464, 627.476, 627.479, 627.480, 627.481,

27         627.482, 627.502, 627.503, 627.510, 627.5515,

28         627.5565, 627.558, 627.602, 627.604, 627.605,

29         627.6131, 627.618, 627.622, 627.623, 627.624,

30         627.625, 627.640, 627.6425, 627.643, 627.647,

31         627.6472, 627.6475, 627.6482, 627.6484,

                                  8

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






    Florida Senate - 2003                                  SB 1712
    311-106B-03




 1         627.6487, 627.6488, 627.649, 627.6494,

 2         627.6498, 627.6499, 627.6515, 627.6561,

 3         627.6571, 627.6675, 627.6685, 627.6692,

 4         627.6699, 627.673, 627.6735, 627.674, 627.6741,

 5         627.6742, 627.6744, 627.6745, 627.678,

 6         627.6785, 627.682, 627.6844, 627.6845, 627.701,

 7         627.7011, 627.7012, 627.7015, 627.7017,

 8         627.702, 627.706, 627.727, 627.7275, 627.728,

 9         627.7282, 627.7295, 627.736, 627.739, 627.7401,

10         627.744, 627.745, 627.758, 627.7711, 627.777,

11         627.7773, 627.780, 627.782, 627.783, 627.7843,

12         627.7845, 627.786, 627.7865, 627.791, 627.793,

13         627.798, 627.805, 627.8055, 627.828, 627.829,

14         627.832, 627.833, 627.834, 627.836, 627.838,

15         627.840, 627.8405, 627.848, 627.849, 627.912,

16         627.9122, 627.9126, 627.913, 627.914, 627.915,

17         627.917, 627.9175, 627.918, 627.919, 627.9403,

18         627.9404, 627.9405, 627.9406, 627.9407,

19         627.94072, 627.94074, 627.9408, 627.942,

20         627.943, 627.944, 627.948, 627.950, 627.951,

21         627.952, 627.954, 627.971, 627.972, 627.973,

22         627.974, 627.986, 627.987, 628.051, 628.061,

23         62.071, 628.091, 628.101, 628.111, 628.152,

24         628.161, 628.171, 628.221, 628.251, 628.255,

25         628.261, 628.271, 628.281, 628.341, 628.351,

26         628.371, 628.391, 628.401, 628.411, 628.421,

27         628.431, 628.441, 628.451, 628.461, 628.4615,

28         628.471, 628.481, 628.491, 628.501, 628.511,

29         628.520, 628.525, 628.530, 628.535, 628.6013,

30         628.6014, 628.6017, 628.705, 628.707, 628.711,

31         628.713, 628.715, 628.717, 628.719, 628.721,

                                  9

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






    Florida Senate - 2003                                  SB 1712
    311-106B-03




 1         628.725, 628.729, 628.730, 628.733, 628.801,

 2         628.802, 628.803, 628.905, 628.911, 628.913,

 3         628.917, 629.081, 629.101, 629.121, 629.131,

 4         629.161, 629.171, 629.181, 629.231, 629.241,

 5         629.261, 629.281, 629.291, 629.301, 629.401,

 6         629.520, 630.021, 630.031, 630.051, 630.071,

 7         630.081, 630.091, 630.101, 630.131, 630.151,

 8         630.161, 631.021, 631.025, 631.031, 631.041,

 9         631.042, 631.051, 631.0515, 631.061, 631.071,

10         631.081, 631.091, 631.111, 631.152, 631.154,

11         631.221, 631.231, 631.361, 631.371, 631.391,

12         631.392, 631.398, 631.54, 631.55, 631.56,

13         631.57, 631.59, 631.62, 631.66, 631.714,

14         631.72, 631.722, 631.723, 631.727, 631.813,

15         631.814, 631.821, 631.825, 631.904, 631.911,

16         631.912, 631.917, 631.918, 631.931, 632.611,

17         632.612, 632.614, 632.615, 632.616, 632.621,

18         632.622, 632.627, 632.628, 632.629, 632.631,

19         632.632, 632.633, 632.637, 633.01, 633.022,

20         633.025, 633.052, 633.061, 633.081, 633.111,

21         633.161, 633.162, 633.30, 633.31, 633.353,

22         633.382, 633.43, 633.445, 633.45, 633.46,

23         633.461, 633.47, 633.50, 633.524, 633.802,

24         633.811, 633.814, 634.011, 634.021, 634.031,

25         634.041, 634.044, 634.045, 634.052, 634.053,

26         634.061, 634.081, 634.095, 634.101, 634.111,

27         634.121, 634.1213, 634.1216, 634.137, 634.141,

28         634.151, 634.161, 634.181, 634.191, 634.211,

29         634.221, 634.231, 634.242, 634.253, 634.261,

30         634.282, 634.283, 634.284, 634.285, 634.286,

31         634.287, 634.288, 634.289, 634.301, 634.302,

                                  10

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    Florida Senate - 2003                                  SB 1712
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 1         634.303, 634.304, 634.305, 634.306, 634.307,

 2         634.3077, 634.3078, 634.308, 634.310, 634.311,

 3         634.3112, 634.312, 634.3123, 634.3126, 634.313,

 4         634.314, 634.320, 634.321, 634.324, 634.325,

 5         634.327, 634.3284, 634.336, 634.337, 634.338,

 6         634.339, 634.34, 634.341, 634.342, 634.343,

 7         634.344, 634.345, 634.348, 634.401, 634.402,

 8         634.403, 634.404, 634.405, 634.406, 634.4061,

 9         634.4065, 634.407, 634.409, 634.411, 634.413,

10         634.414, 634.4145, 634.415, 634.416, 634.422,

11         634.423, 634.426, 634.427, 634.428, 634.430,

12         634.433, 634.437, 634.438, 634.439, 634.44,

13         634.441, 634.442, 634.443, 634.444, 635.011,

14         635.031, 635.041, 635.042, 635.071, 635.081,

15         636.003, 636.006, 636.007, 636.008, 636.009,

16         636.015, 636.016, 636.017, 636.018, 636.025,

17         636.029, 636.036, 636.037, 636.038, 636.039,

18         636.043, 636.045, 636.046, 636.047, 636.048,

19         636.049, 636.052, 636.053, 636.055, 636.056,

20         636.057, 636.058, 636.062, 636.063, 636.064,

21         636.067, 641.185, 641.19, 641.2017, 641.2018,

22         641.21, 641.215, 641.22, 641.225, 641.227,

23         641.228, 641.23, 641.234, 641.2342, 641.25,

24         641.255, 641.26, 641.27, 641.28, 641.281,

25         641.284, 641.285, 641.29, 641.3007, 641.305,

26         641.31, 641.3105, 641.31071, 641.31074,

27         641.315, 641.3154, 641.3155, 641.316, 641.35,

28         641.36, 641.365, 641.385, 641.39001, 641.3903,

29         641.3905, 641.3907, 641.3909, 641.3911,

30         641.3913, 641.3917, 641.3922, 641.402, 641.403,

31         641.405, 641.406, 641.4065, 641.407, 641.409,

                                  11

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    Florida Senate - 2003                                  SB 1712
    311-106B-03




 1         641.41, 641.412, 641.418, 641.42, 641.421,

 2         641.424, 641.437, 641.443, 641.444, 641.445,

 3         641.446, 641.447, 641.448, 641.45, 641.452,

 4         641.453, 641.454, 641.455, 641.457, 641.48,

 5         641.49, 641.495, 641.511, 641.512, 641.52,

 6         641.54, 641.55, 641.58, 642.015, 642.017,

 7         642.021, 642.022, 642.023, 642.025, 642.027,

 8         642.029, 642.0301, 642.0331, 642.0334,

 9         642.0338, 642.041, 642.043, 642.047, 642.0475,

10         648.25, 648.26, 648.33, 648.34, 648.35,

11         648.355, 648.365, 648.386, 648.44, 648.442,

12         648.571, 650.06, 651.011, 651.012, 651.013,

13         651.014, 651.015, 651.018, 651.019, 651.021,

14         651.022, 651.023, 651.0235, 651.026, 651.0261,

15         651.028, 651.033, 651.035, 651.051, 651.055,

16         651.083, 651.085, 651.091, 651.095, 651.105,

17         651.106, 651.107, 651.108, 651.1081, 651.111,

18         651.114, 651.1151, 651.118, 651.119, 651.121,

19         651.123, 651.125, 651.134, 655.001, 655.005,

20         655.012, 655.015, 655.016, 655.031, 655.032,

21         655.0321, 655.0322, 655.033, 655.034, 655.037,

22         655.0385, 655.0386, 655.0391, 655.041, 655.043,

23         655.044, 655.045, 655.047, 655.049, 655.057,

24         655.059, 655.061, 655.071, 655.411, 655.412,

25         655.414, 655.416, 655.418, 655.50, 655.60,

26         655.762, 655.89, 655.90, 655.922, 655.942,

27         655.943, 655.948, 655.949, 655.963, 657.002,

28         657.005, 657.0061, 657.008, 657.021, 657.026,

29         657.028, 657.031, 657.033, 657.0335, 657.038,

30         657.042, 657.043, 657.053, 657.062, 657.063,

31         657.064, 657.065, 657.066, 657.068, 658.12,

                                  12

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    Florida Senate - 2003                                  SB 1712
    311-106B-03




 1         658.16, 658.165, 658.19, 658.20, 658.21,

 2         658.22, 658.23, 658.235, 658.24, 658.25,

 3         658.26, 658.27, 658.28, 658.285, 658.295,

 4         658.2953, 658.296, 658.32, 658.33, 658.34,

 5         658.35, 658.36, 658.37, 658.39, 658.40, 658.41,

 6         658.42, 658.43, 658.44, 658.45, 658.48, 658.53,

 7         658.67, 658.68, 658.73, 658.79, 658.80, 658.81,

 8         658.82, 658.83, 658.84, 658.90, 658.94, 658.95,

 9         658.96, 658.995, 660.26, 660.265, 660.27,

10         660.28, 660.33, 660.40, 606.47, 660.48, 663.02,

11         663.04, 663.05, 663.055, 663.06, 663.061,

12         663.064, 663.065, 663.07, 663.08, 663.083,

13         663.09, 663.10, 663.11, 663.12, 663.13, 663.14,

14         663.16, 663.17, 663.171, 663.172, 663.173,

15         663.174, 663.175, 663.176, 663.177, 663.178,

16         663.18, 663.181, 663.301, 663.302, 663.303,

17         663.304, 663.305, 663.306, 663.308, 663.309,

18         663.311, 663.312, 663.316, 663.319, 665.012,

19         665.013, 665.0315, 665.033, 665.0335, 665.034,

20         665.0345, 665.0711, 665.1001, 667.002, 667.003,

21         667.005, 667.006, 667.007, 667.008, 667.013,

22         687.13, 687.14, 687.141, 687.143, 687.144,

23         687.145, 687.148, 697.05, 713.596, 716.02,

24         716.03, 716.04, 716.05, 716.06, 716.07,

25         717.101, 717.117, 717.135, 717.138, 718.501,

26         719.501, 721.24, 721.26, 723.006, 732.107,

27         733.816, 744.534, 766.105, 766.1115, 766.314,

28         766.315, 768.28, 790.001, 790.1612, 791.01,

29         791.015, 817.16, 817.234, 817.2341, 817.50,

30         839.06, 849.086, 849.33, 860.154, 860.157,

31         896.102, 896.104, 903.09, 903.101, 903.27,

                                  13

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 1         925.037, 932.7055, 932.707, 938.27, 939.13,

 2         943.031, 943.032, 944.516, 946.33, 946.509,

 3         946.5095, 946.510, 946.517, 946.522, 946.525,

 4         947.12, 950.002, 957.04, 985.406, 985.409,

 5         1000.05, 1001.23, 1002.36, 1002.38, 1002.39,

 6         1003.48, 1004.30, 1004.725, 1006.29, 1006.33,

 7         1006.34, 1006.39, 1008.33, 1009.265, 1009.54,

 8         1009.56, 1009.66, 1009.72, 1009.73, 1009.765,

 9         1009.77, 1009.971, 1009.972, 1010.56, 1010.74,

10         1010.75, 1011.10, 1011.17, 1011.18, 1011.4105,

11         1011.57, 1011.94, 1012.59, 1012.79, 1013.79,

12         F.S.; repealing s. 17.06, F.S., relating to

13         items and accounts disallowed by the

14         Comptroller; s. 18.03, F.S., relating to

15         residence and office of the Treasurer; s.

16         18.09, F.S., relating to delivery to the

17         Legislature of the annual report of the

18         Treasurer; s. 18.22, F.S., relating to

19         rulemaking authority of the Department of

20         Banking and Finance; s. 20.12, F.S., relating

21         to the Department of Banking and Finance; s.

22         20.13, F.S., relating to the Department of

23         Insurance; s. 440.135, F.S., relating to pilot

24         programs for medical and remedial care in

25         workers' compensation; s. 624.4071, F.S.,

26         relating to special purpose homeowner insurance

27         companies; s. 624.463, F.S., relating to

28         conversion of self-insurance funds; s.

29         627.0623, F.S., relating to restrictions on

30         expenditures and solicitations of insurers and

31         affiliates; s. 627.3516, F.S., relating to

                                  14

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    Florida Senate - 2003                                  SB 1712
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 1         residential property insurance market

 2         coordinating council; s. 627.7825, F.S.,

 3         relating to alternative rate adoption; s.

 4         655.019, F.S., relating to campaign

 5         contribution limitations; s. 657.067, F.S.,

 6         relating to conversion from federal to state

 7         charter and to requirements for application

 8         approval; and ss. 657.25-657.269, relating to

 9         the Florida Credit Union Guaranty Corporation,

10         Inc.; providing for retroactive applicability;

11         providing an effective date.

12  

13  Be It Enacted by the Legislature of the State of Florida:

14  

15         Section 1.  Section 11.12, Florida Statutes, is amended

16  to read:

17         11.12  Salary, subsistence, and mileage of members and

18  employees; expenses authorized by resolution; appropriation;

19  preaudit by Comptroller.--

20         (1)  The Chief Financial Officer Treasurer is

21  authorized to pay the salary, subsistence, and mileage of the

22  members of the Legislature, as the same shall be authorized

23  from time to time by law, upon receipt of a warrant therefor

24  of the Comptroller for the stated amount. The Chief Financial

25  Officer may Treasurer is authorized to pay the compensation of

26  employees of the Legislature, together with reimbursement for

27  their authorized travel as provided in s. 112.061, and such

28  expense of the Legislature as shall be authorized by law, a

29  concurrent resolution, a resolution of either house, or rules

30  adopted by the respective houses, provided the total amount

31  appropriated to the legislative branch shall not be altered,

                                  15

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 1  upon receipt of such warrant therefor. The number, duties, and

 2  compensation of the employees of the respective houses and of

 3  their committees shall be determined as provided by the rules

 4  of the respective house or in this chapter. Each legislator

 5  may designate no more than two employees to attend sessions of

 6  the Legislature, and those employees who change their places

 7  of residence in order to attend the session shall be paid

 8  subsistence at a rate to be established by the President of

 9  the Senate for Senate employees and the Speaker of the House

10  of Representatives for House employees. Such employees, in

11  addition to subsistence, shall be paid transportation expenses

12  in accordance with s. 112.061(7) and (8) for actual

13  transportation between their homes and the seat of government

14  in order to attend the legislative session and return home, as

15  well as for two round trips during the course of any regular

16  session of the Legislature.

17         (2)  All vouchers covering legislative expenses shall

18  be preaudited by the Chief Financial Officer Comptroller, and,

19  if found to be correct, state warrants shall be issued

20  therefor.

21         Section 2.  Paragraph (c) of subsection (5) of section

22  11.13, Florida Statutes, is amended to read:

23         11.13  Compensation of members.--

24         (5)

25         (c)  The Office of Legislative Services shall submit on

26  forms prescribed by the Chief Financial Officer Comptroller

27  requested allotments of appropriations for the fiscal year. It

28  shall be the duty of the Chief Financial Officer Comptroller

29  to release the funds and authorize the expenditures for the

30  legislative branch to be made from the appropriations on the

31  basis of the requested allotments.  However, the aggregate of

                                  16

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 1  such allotments shall not exceed the total appropriations

 2  available for the fiscal year.

 3         Section 3.  Subsection (4) of section 11.147, Florida

 4  Statutes, is amended to read:

 5         11.147  Office of Legislative Services.--

 6         (4)  The Office of Legislative Services shall deliver

 7  such vouchers covering legislative expenses as required to the

 8  Chief Financial Officer Comptroller and, if found to be

 9  correct, state warrants shall be issued therefor.

10         Section 4.  Section 11.151, Florida Statutes, is

11  amended to read:

12         11.151  Annual legislative appropriation to contingency

13  fund for use of Senate President and House Speaker.--There is

14  established a legislative contingency fund consisting of

15  $10,000 for the President of the Senate and $10,000 for the

16  Speaker of the House of Representatives, which amounts shall

17  be set aside annually from moneys appropriated for legislative

18  expense.  These funds shall be disbursed by the Chief

19  Financial Officer Comptroller upon receipt of vouchers

20  authorized by the President of the Senate or the Speaker of

21  the House of Representatives. Such Said funds may be expended

22  at the unrestricted discretion of the President of the Senate

23  or the Speaker of the House of Representatives in carrying out

24  their official duties during the entire period between the

25  date of their election as such officers at the organizational

26  meeting held pursuant to s. 3(a), Art. III of the State

27  Constitution and the next general election.

28         Section 5.  Subsection (5) of section 11.40, Florida

29  Statutes, is amended to read:

30         11.40  Legislative Auditing Committee.--

31  

                                  17

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 1         (5)  Following notification by the Auditor General, the

 2  Department of Financial Services Banking and Finance, or the

 3  Division of Bond Finance of the State Board of Administration

 4  of the failure of a local governmental entity, district school

 5  board, charter school, or charter technical career center to

 6  comply with the applicable provisions within s. 11.45(5)-(7),

 7  s. 218.32(1), or s. 218.38, the Legislative Auditing Committee

 8  may schedule a hearing. If a hearing is scheduled, the

 9  committee shall determine if the entity should be subject to

10  further state action.  If the committee determines that the

11  entity should be subject to further state action, the

12  committee shall:

13         (a)  In the case of a local governmental entity or

14  district school board, request the Department of Revenue and

15  the Department of Financial Services Banking and Finance to

16  withhold any funds not pledged for bond debt service

17  satisfaction which are payable to such entity until the entity

18  complies with the law. The committee, in its request, shall

19  specify the date such action shall begin, and the request must

20  be received by the Department of Revenue and the Department of

21  Financial Services Banking and Finance 30 days before the date

22  of the distribution mandated by law. The Department of Revenue

23  and the Department of Financial Services may Banking and

24  Finance are authorized to implement the provisions of this

25  paragraph.

26         (b)  In the case of a special district, notify the

27  Department of Community Affairs that the special district has

28  failed to comply with the law. Upon receipt of notification,

29  the Department of Community Affairs shall proceed pursuant to

30  the provisions specified in ss. 189.421 and 189.422.

31  

                                  18

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    Florida Senate - 2003                                  SB 1712
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 1         (c)  In the case of a charter school or charter

 2  technical career center, notify the appropriate sponsoring

 3  entity, which may terminate the charter pursuant to ss.

 4  228.056 and 228.505.

 5         Section 6.  Paragraph (b) of subsection (6) of section

 6  11.42, Florida Statutes, is amended to read:

 7         11.42  The Auditor General.--

 8         (6)

 9         (b)  All payrolls and vouchers for the operations of

10  the Auditor General's office shall be submitted to the Chief

11  Financial Officer Comptroller and, if found to be correct,

12  payments shall be issued therefor.

13         Section 7.  Subsection (1) of section 14.057, Florida

14  Statutes, is amended to read:

15         14.057  Governor-elect; establishment of operating

16  fund.--

17         (1)  There is established an operating fund for the use

18  of the Governor-elect during the period dating from the

19  certification of his or her election by the Elections

20  Canvassing Commission to his or her inauguration as Governor.

21  The Governor-elect during this period may allocate the fund to

22  travel, expenses, his or her salary, and the salaries of the

23  Governor-elect's staff as he or she determines. Such staff may

24  include, but not be limited to, a chief administrative

25  assistant, a legal adviser, a fiscal expert, and a public

26  relations and information adviser. The salary of the

27  Governor-elect and each member of the Governor-elect's staff

28  during this period shall be determined by the Governor-elect,

29  except that the total expenditures chargeable to the state

30  under this section, including salaries, shall not exceed the

31  amount appropriated to the operating fund. The Executive

                                  19

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    Florida Senate - 2003                                  SB 1712
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 1  Office of the Governor shall supply to the Governor-elect

 2  suitable forms to provide for the expenditure of the fund and

 3  suitable forms to provide for the reporting of all

 4  expenditures therefrom. The Chief Financial Officer

 5  Comptroller shall release moneys from this fund upon the

 6  request of the Governor-elect properly filed.

 7         Section 8.  Section 14.058, Florida Statutes, is

 8  amended to read:

 9         14.058  Inauguration expense fund.--There is

10  established an inauguration expense fund for the use of the

11  Governor-elect in planning and conducting the inauguration

12  ceremonies. The Governor-elect shall appoint an inauguration

13  coordinator and such staff as necessary to plan and conduct

14  the inauguration. Salaries for the inauguration coordinator

15  and the inauguration coordinator's staff shall be determined

16  by the Governor-elect and shall be paid from the inauguration

17  expense fund. The Executive Office of the Governor shall

18  supply to the inauguration coordinator suitable forms to

19  provide for the expenditure of the fund and suitable forms to

20  provide for the reporting of all expenditures therefrom. The

21  Chief Financial Officer Comptroller shall release moneys from

22  this fund upon the request of the inauguration coordinator

23  properly filed.

24         Section 9.  Paragraph (f) of subsection (3) of section

25  14.203, Florida Statutes, is amended to read:

26         14.203  State Council on Competitive Government.--It is

27  the policy of this state that all state services be performed

28  in the most effective and efficient manner in order to provide

29  the best value to the citizens of the state. The state also

30  recognizes that competition among service providers may

31  improve the quality of services provided, and that

                                  20

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    Florida Senate - 2003                                  SB 1712
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 1  competition, innovation, and creativity among service

 2  providers should be encouraged.

 3         (3)  In performing its duties under this section, the

 4  council may:

 5         (f)  Require that an identified state service be

 6  submitted to competitive bidding or another process that

 7  creates competition with private sources or other governmental

 8  entities. In determining whether an identified state service

 9  should be submitted to competitive bidding, the council shall

10  consider, at a minimum:

11         1.  Any constitutional and legal implications which may

12  arise as a result of such action.

13         2.  The cost of supervising the work of any private

14  contractor.

15         3.  The total cost to the state agency of such state

16  agency's performance of a service, including all indirect

17  costs related to that state agency and costs of such agencies

18  as the Chief Financial Officer Comptroller, the Treasurer, the

19  Attorney General, and other such support agencies to the

20  extent such costs would not be incurred if a contract is

21  awarded. Costs for the current provision of the service shall

22  be considered only when such costs would actually be saved if

23  the contract were awarded to another entity.

24         Section 10.  Subsection (3) of section 15.09, Florida

25  Statutes, is amended to read:

26         15.09  Fees.--

27         (3)  All fees arising from certificates of election or

28  appointment to office and from commissions to officers shall

29  be paid to the Chief Financial Officer Treasurer for deposit

30  in the General Revenue Fund.

31  

                                  21

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    Florida Senate - 2003                                  SB 1712
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 1         Section 11.  Section 16.10, Florida Statutes, is

 2  amended to read:

 3         16.10  Receipt of Supreme Court reports for

 4  office.--The Clerk of the Supreme Court shall deliver to the

 5  Attorney General a copy of each volume, or part of volume, of

 6  the decisions of the Supreme Court, which may be in the care

 7  or custody of said clerk, and which the Attorney General's

 8  office may be without, and take the Attorney General's receipt

 9  for the same. The Attorney General shall keep the same in her

10  or his office at the capitol, and each retiring Attorney

11  General shall take the receipt of her or his successor for the

12  same and file such receipt in the Chief Financial Officer's

13  Treasurer's office; provided that this shall not authorize the

14  taking away of any book belonging to the Supreme Court

15  library, kept for the use of said court.

16         Section 12.  Section 17.001, Florida Statutes, is

17  created to read:

18         17.001  Chief Financial Officer.--As provided in s.

19  4(c), Art. IV of the State Constitution, the Chief Financial

20  Officer is the chief fiscal officer of the state and is

21  responsible for settling and approving accounts against the

22  state and keeping all state funds and securities.

23         Section 13.  Section 17.002, Florida Statutes, is

24  created to read:

25         17.002  Definition.--For the purposes of this chapter,

26  the term "department" means the Department of Financial

27  Services.

28         Section 14.  Section 17.011, Florida Statutes, is

29  amended to read:

30         17.011  Assistant Chief Financial Officer

31  comptroller.--The Chief Financial Officer Comptroller of the

                                  22

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    Florida Senate - 2003                                  SB 1712
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 1  state may appoint an Assistant Chief Financial Officer

 2  comptroller to hold office during the pleasure of the Chief

 3  Financial Officer Comptroller.

 4         Section 15.  Section 17.02, Florida Statutes, is

 5  amended to read:

 6         17.02  Place of residence and office.--The Chief

 7  Financial Officer Comptroller shall reside at the seat of

 8  government of this state, and shall hold office in a room in

 9  the capitol.

10         Section 16.  Section 17.03, Florida Statutes, is

11  amended to read:

12         17.03  To audit claims against the state.--

13         (1)  The Chief Financial Officer Comptroller of this

14  state, using generally accepted auditing procedures for

15  testing or sampling, shall examine, audit, and settle all

16  accounts, claims, and demands, whatsoever, against the state,

17  arising under any law or resolution of the Legislature, and

18  issue a warrant to the Treasurer directing the payment

19  Treasurer to pay out of the State Treasury of such amount as

20  he or she allows shall be allowed by the Comptroller thereon.

21         (2)  The Chief Financial Officer Comptroller may

22  establish dollar thresholds applicable to each invoice amount

23  and other criteria for testing or sampling invoices on a

24  preaudit and postaudit basis.  The Chief Financial Officer

25  Comptroller may revise such thresholds and other criteria for

26  an agency or the unit of any agency as he or she deems

27  appropriate.

28         (3)  The Chief Financial Officer Comptroller may adopt

29  and disseminate to the agencies procedural and documentation

30  standards for payment requests and may provide training and

31  technical assistance to the agencies for these standards.

                                  23

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 1         (4)  The Chief Financial Officer Comptroller shall have

 2  the legal duty of delivering all state warrants and shall be

 3  charged with the official responsibility of the protection and

 4  security of the state warrants while in his or her custody.

 5  The Chief Financial Officer Comptroller may delegate this

 6  authority to other state agencies or officers.

 7         Section 17.  Section 17.031, Florida Statutes, is

 8  amended to read:

 9         17.031  Security of Chief Financial Officer's

10  Comptroller's office.--The Chief Financial Officer may

11  Comptroller is authorized to engage the full-time services of

12  two law enforcement officers, with power of arrest, to prevent

13  all acts of a criminal nature directed at the property in the

14  custody or control of the Chief Financial Officer Comptroller.

15  While so assigned, such said officers shall be under the

16  direction and supervision of the Chief Financial Officer

17  Comptroller, and their salaries and expenses shall be paid

18  from the general fund of the office of Chief Financial Officer

19  Comptroller.

20         Section 18.  Section 17.04, Florida Statutes, is

21  amended to read:

22         17.04  To audit and adjust accounts of officers and

23  those indebted to the state.--The Chief Financial Officer

24  Department of Banking and Finance of this state, using

25  generally accepted auditing procedures for testing or

26  sampling, shall examine, audit, adjust, and settle the

27  accounts of all the officers of this state, and any other

28  person in anywise entrusted with, or who may have received any

29  property, funds, or moneys of this state, or who may be in

30  anywise indebted or accountable to this state for any

31  property, funds, or moneys, and require such officer or

                                  24

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 1  persons to render full accounts thereof, and to yield up such

 2  property or funds according to law, or pay such moneys into

 3  the treasury of this state, or to such officer or agent of the

 4  state as may be appointed to receive the same, and on failure

 5  so to do, to cause to be instituted and prosecuted

 6  proceedings, criminal or civil, at law or in equity, against

 7  such persons, according to law.  The Division of Accounting

 8  and Auditing Financial Investigations may conduct

 9  investigations within or outside of this state as it deems

10  necessary to aid in the enforcement of this section.  If

11  during an investigation the division has reason to believe

12  that any criminal statute of this state has or may have been

13  violated, the division shall refer any records tending to show

14  such violation to state or federal law enforcement or

15  prosecutorial agencies and shall provide investigative

16  assistance to those agencies as required.

17         Section 19.  Section 17.0401, Florida Statutes, is

18  amended to read:

19         17.0401  Confidentiality of information relating to

20  financial investigations.--Except as otherwise provided by

21  this section, information relative to an investigation

22  conducted by the Division of Accounting and Auditing Financial

23  Investigations pursuant to s. 17.04, including any consumer

24  complaint, is confidential and exempt from the provisions of

25  s. 119.07(1) and s. 24(a), Art. I of the State Constitution

26  until the investigation is completed or ceases to be active.

27  Any information relating to an investigation conducted by the

28  division pursuant to s. 17.04 shall remain confidential and

29  exempt from the provisions of s. 119.07(1) and s. 24(a), Art.

30  I of the State Constitution after the division's investigation

31  is completed or ceases to be active if the division submits

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 1  the information to any law enforcement or prosecutorial agency

 2  for further investigation.  Such information shall remain

 3  confidential and exempt from the provisions of s. 119.07(1)

 4  and s. 24(a), Art. I of the State Constitution until that

 5  agency's investigation is completed or ceases to be active.

 6  For purposes of this section, an investigation shall be

 7  considered "active" so long as the division or any law

 8  enforcement or prosecutorial agency is proceeding with

 9  reasonable dispatch and has a reasonable good faith belief

10  that the investigation may lead to the filing of an

11  administrative, civil, or criminal proceeding.  This section

12  shall not be construed to prohibit disclosure of information

13  that which is required by law to be filed with the Department

14  of Financial Services or the Office of Financial Institutions

15  and Securities Regulation Banking and Finance and that which,

16  but for the investigation, would otherwise be subject to

17  public disclosure. Nothing in this section shall be construed

18  to prohibit the division from providing information to any law

19  enforcement or prosecutorial agency.  Any law enforcement or

20  prosecutorial agency receiving confidential information from

21  the division in connection with its official duties shall

22  maintain the confidentiality of the information as provided

23  for in this section.

24         Section 20.  Section 17.041, Florida Statutes, is

25  amended to read:

26         17.041  County and district accounts and claims.--

27         (1)  It shall be the duty of the Chief Financial

28  Officer Department of Banking and Finance of this state to

29  adjust and settle, or cause to be adjusted and settled, all

30  accounts and claims heretofore or hereafter reported to it by

31  the Auditor General, the appropriate county or district

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 1  official, or any person against all county and district

 2  officers and employees, and against all other persons

 3  entrusted with, or who may have received, any property, funds,

 4  or moneys of a county or district or who may be in anywise

 5  indebted to or accountable to a county or district for any

 6  property, funds, moneys, or other thing of value, and to

 7  require such officer, employee, or person to render full

 8  accounts thereof and to yield up such property, funds, moneys,

 9  or other thing of value according to law to the officer or

10  authority entitled by law to receive the same.

11         (2)  On the failure of such officer, employee, or

12  person to adjust and settle such account, or to yield up such

13  property, funds, moneys, or other thing of value, the Chief

14  Financial Officer department shall direct the attorney for the

15  board of county commissioners, the district school board, or

16  the district, as the case may be, entitled to such account,

17  property, funds, moneys, or other thing of value to represent

18  such county or district in enforcing settlement, payment or

19  delivery of such account, property, funds, moneys, or other

20  thing of value. The Chief Financial Officer department may

21  enforce such settlement, payment, or delivery pursuant to s.

22  17.20.

23         (3)  Should the attorney for the county or district

24  aforesaid be disqualified or unable to act, and no other

25  attorney be furnished by the county or district, or should the

26  Chief Financial Officer department otherwise deem it

27  advisable, such account or claim may be certified to the

28  Department of Legal Affairs by the Chief Financial Officer

29  department, to be prosecuted by the Department of Legal

30  Affairs at county or district expense, as the case may be,

31  including necessary per diem and travel expense in accordance

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 1  with  s. 112.061, as now or hereafter amended.  Such expenses,

 2  when approved by the Chief Financial Officer department, shall

 3  be paid forthwith by such county or district.

 4         (4)  If Should it appears appear to the Chief Financial

 5  Officer department that any criminal statute of this state has

 6  or may have been violated by such defaulting officer,

 7  employee, or person, such information, evidence, documents,

 8  and other things tending to show such a violation, whether in

 9  the hands of the Chief Financial Officer Comptroller, the

10  Auditor General, the county, or the district, shall be

11  forthwith turned over to the proper state attorney for

12  inspection, study, and such action as may be deemed proper, or

13  the same may be brought to the attention of the proper grand

14  jury.

15         (5)  No such account or claim, after it has been

16  certified to the Chief Financial Officer department, may be

17  settled for less than the amount due according to law without

18  the written consent of the Chief Financial Officer department,

19  and any attempt to make settlement in violation of this

20  subsection shall be deemed null and void.  A county or

21  district board desiring to make such a settlement shall

22  incorporate the proposed settlement into a resolution, stating

23  that the proposed settlement is contingent upon the Chief

24  Financial Officer's Comptroller's approval, and shall submit

25  two copies of the resolution to the department.  The Chief

26  Financial Officer department shall return one copy with his or

27  her the Comptroller's action endorsed thereon.

28         (6)  No settlement of account of any such officer,

29  employee, or person, with the county or district, or any of

30  their officers or agents, made in an amount or manner other

31  than as authorized by law or for other than a lawful county or

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 1  district purpose, shall be binding upon such county or

 2  district unless and until approved by the Chief Financial

 3  Officer department, or unless more than 4 years shall have

 4  elapsed from the date of such settlement.

 5         (7)  Nothing in this section shall supersede the

 6  continuing duty of the proper county and district officers to

 7  require any officer, employee, or person to render full

 8  accounts of and to yield up according to law to the officer or

 9  authority entitled by law to receive the same, any property,

10  funds, moneys, or other thing of value as to which such

11  officer, employee, or person is in anywise indebted to or

12  accountable to such county or district.  The provisions of

13  this section provide for collections and recoveries which the

14  proper county or district officers have failed to make, and

15  for correction of settlements made in an amount or manner

16  other than as authorized by law.

17         Section 21.  Section 17.0415, Florida Statutes, is

18  amended to read:

19         17.0415  Transfer and assignment of claims.--In order

20  to facilitate their collection from third parties, the Chief

21  Financial Officer Comptroller may authorize the assignment of

22  claims among the state, its agencies, and its subdivisions,

23  whether arising from criminal, civil, or other judgments in

24  state or federal court. The state, its agencies, and its

25  subdivisions, may assign claims under such terms as are

26  mutually acceptable to the Chief Financial Officer Comptroller

27  and the assignee and assignor.  The assigned claim may be

28  enforced as a setoff to any claim against the state, its

29  agencies, or its subdivisions, by garnishment or in the same

30  manner as a judgment in a civil action.  Claims against the

31  state, its agencies, and its subdivisions resulting from the

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 1  condemnation of property protected by the provisions of s. 4,

 2  Art. X of the State Constitution are not subject to setoff

 3  pursuant to this section.

 4         Section 22.  Section 17.05, Florida Statutes, is

 5  amended to read:

 6         17.05  Subpoenas; sworn statements; enforcement

 7  proceedings.--

 8         (1)  The Chief Financial Officer Comptroller may demand

 9  and require full answers on oath from any and every person,

10  party or privy to any account, claim, or demand against or by

11  the state, such as it may be the Chief Financial Officer's

12  Comptroller's official duty to examine into, and which answers

13  the Chief Financial Officer Comptroller may require to be in

14  writing and to be sworn to before the Chief Financial Officer

15  Comptroller or the department or before any judicial officer

16  or clerk of any court of the state so as to enable the Chief

17  Financial Officer Comptroller to determine the justice or

18  legality of such account, claim, or demand.

19         (2)  In exercising authority under this chapter, the

20  Chief Financial Officer Comptroller or his or her designee

21  may:

22         (a)  Issue subpoenas, administer oaths, and examine

23  witnesses.

24         (b)  Require or permit a person to file a statement in

25  writing, under oath or otherwise as the Chief Financial

26  Officer Comptroller or his or her designee requires, as to all

27  the facts and circumstances concerning the matter to be

28  audited, examined, or investigated.

29         (3)  Subpoenas shall be issued by the Chief Financial

30  Officer Comptroller or his or her designee under seal

31  commanding such witnesses to appear before the Chief Financial

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 1  Officer Comptroller or his or her the Comptroller's

 2  representative or the department at a specified time and place

 3  and to bring books, records, and documents as specified or to

 4  submit books, records, and documents for inspection.  Such

 5  subpoenas may be served by an authorized representative of the

 6  Chief Financial Officer Comptroller or the department.

 7         (4)  In the event of noncompliance with a subpoena

 8  issued pursuant to this section, the Chief Financial Officer

 9  Comptroller or the department may petition the circuit court

10  of the county in which the person subpoenaed resides or has

11  his or her principal place of business for an order requiring

12  the subpoenaed person to appear and testify and to produce

13  books, records, and documents as specified in the subpoena.

14  The court may grant legal, equitable, or injunctive relief,

15  including, but not limited to, issuance of a writ of ne exeat

16  or the restraint by injunction or appointment of a receiver of

17  any transfer, pledge, assignment, or other disposition of such

18  person's assets or any concealment, alteration, destruction,

19  or other disposition of subpoenaed books, records, or

20  documents, as the court deems appropriate, until such person

21  has fully complied with such subpoena and the Chief Financial

22  Officer Comptroller or the department has completed the audit,

23  examination, or investigation.  The Chief Financial Officer

24  Comptroller or the department is entitled to the summary

25  procedure provided in s. 51.011, and the court shall advance

26  the cause on its calendar.  Costs incurred by the Chief

27  Financial Officer Comptroller or the department to obtain an

28  order granting, in whole or in part, such petition for

29  enforcement of a subpoena shall be charged against the

30  subpoenaed person, and failure to comply with such order shall

31  be a contempt of court.

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 1         Section 23.  Section 17.075, Florida Statutes, is

 2  amended to read:

 3         17.075  Form of state warrants and other payment

 4  orders; rules.--

 5         (1)  The Chief Financial Officer Department of Banking

 6  and Finance is authorized to establish the form or forms of

 7  state warrants which are to be drawn by him or her it and of

 8  other orders for payment or disbursement of moneys out of the

 9  State Treasury and to change the form thereof from time to

10  time as the Chief Financial Officer department may consider

11  necessary or appropriate.  Such orders for payment may be in

12  any form, but, regardless of form, each order shall be subject

13  to the accounting and recordkeeping requirements applicable to

14  state warrants.

15         (2)  The Chief Financial Officer department shall adopt

16  rules establishing accounting and recordkeeping procedures for

17  all payments made by electronic transfer of funds or by any

18  other means.  Such procedures shall be consistent with the

19  statutory requirements applicable to payments by state

20  warrant.

21         Section 24.  Section 17.076, Florida Statutes, is

22  amended to read:

23         17.076  Direct deposit of funds.--

24         (1)  As used in this section, the term:

25         (a)  "beneficiary" means any person who is drawing

26  salary or retirement benefits from the state or who is the

27  recipient of any lawful payment from state funds.

28         (b)  "Department" means the Department of Banking and

29  Finance.

30         (2)  The Chief Financial Officer department shall

31  establish a program for the direct deposit of funds to the

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 1  account of the beneficiary of such a payment or disbursement

 2  in any financial institution equipped for electronic fund

 3  transfers, which institution is designated in writing by such

 4  beneficiary and has lawful authority to accept such deposits.

 5  Direct deposit of funds shall be by any electronic or other

 6  transfer medium approved by the Chief Financial Officer

 7  department for such purpose.

 8         (3)  The Chief Financial Officer department may

 9  contract with an authorized financial institution for the

10  services necessary to operate the program.  In order to

11  implement the provisions of this section, the Chief Financial

12  Officer may Comptroller is authorized to deposit with that

13  financial institution the funds payable to the beneficiaries,

14  in lump sum, by Chief Financial Officer's Comptroller's

15  warrant to make the authorized direct deposits.

16         (4)  The written authorization of a beneficiary shall

17  be filed with the department or its designee. Such

18  authorization shall remain in effect until withdrawn in

19  writing by the beneficiary or dishonored by the designated

20  financial institution.

21         (5)  All direct deposit records made prior to October

22  1, 1986, are exempt from the provisions of s. 119.07(1).  With

23  respect to direct deposit records made on or after October 1,

24  1986, the names of the authorized financial institutions and

25  the account numbers of the beneficiaries are confidential and

26  exempt from the provisions of s. 119.07(1).

27         (6)  The department shall implement local option direct

28  deposit of funds for local governmental entities by January 1,

29  1996.

30         (6)(7)  To cover the department's actual costs for

31  processing the direct deposit of funds other than salary or

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 1  retirement benefits, the department may charge the beneficiary

 2  of the direct deposit a reasonable fee. The department may

 3  collect the fee by direct receipt from the beneficiary or by

 4  subtracting the amount of the fee from the funds due the

 5  beneficiary.  Such fees collected by the department shall be

 6  deposited into the Department of Financial Services Banking

 7  and Finance Administrative Trust Fund.

 8         (7)(8)  Effective July 1, 2000, all new recipients of

 9  retirement benefits from this state shall be paid by direct

10  deposit of funds. A retiree may request from the department an

11  exemption from the provisions of this subsection when such

12  retiree can demonstrate a hardship. The department may pay

13  retirement benefits by state warrant when deemed

14  administratively necessary.

15         Section 25.  Section 17.08, Florida Statutes, is

16  amended to read:

17         17.08  Accounts, etc., on which warrants drawn, to be

18  filed.--All accounts, vouchers, and evidence, upon which

19  warrants have heretofore been, or shall hereafter be, drawn

20  upon the treasury by the Chief Financial Officer Comptroller

21  shall be filed and deposited in the office of Chief Financial

22  Officer Comptroller or the office of the Chief Financial

23  Officer's Comptroller's designee, in accordance with

24  requirements established by the Secretary of State.

25         Section 26.  Section 17.09, Florida Statutes, is

26  amended to read:

27         17.09  Application for warrants for salaries.--All

28  public officers who are entitled to salaries in this state,

29  shall make their application for warrants in writing, stating

30  for what terms and the amount they claim, which written

31  

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 1  application shall be filed by the Chief Financial Officer

 2  Comptroller as vouchers for the warrants issued thereupon.

 3         Section 27.  Section 17.10, Florida Statutes, is

 4  amended to read:

 5         17.10  Record of warrants and of state funds and

 6  securities issued.--The Chief Financial Officer Comptroller

 7  shall cause to be entered in the warrant register a record of

 8  the warrants issued during the previous month, and shall make

 9  such entry in the record so required to be kept as shall show

10  the number of each warrant issued, in whose favor drawn, and

11  the date it was issued. He or she shall account for all state

12  funds and securities.

13         Section 28.  Section 17.11, Florida Statutes, is

14  amended to read:

15         17.11  To report disbursements made.--

16         (1)  The Chief Financial Officer Comptroller shall make

17  in all his or her future annual reports an exhibit stated from

18  the record of disbursements made during the fiscal year, and

19  the several heads of expenditures under which such

20  disbursements were made.

21         (2)  The Chief Financial Officer Comptroller shall also

22  cause to have reported from the Florida Accounting Information

23  Resource Subsystem no less than quarterly the disbursements

24  which agencies made to small businesses, as defined in the

25  Florida Small and Minority Business Assistance Act of 1985; to

26  certified minority business enterprises in the aggregate; and

27  to certified minority business enterprises broken down into

28  categories of minority persons, as well as gender and

29  nationality subgroups. This information shall be made

30  available to the agencies, the Office of Supplier Diversity,

31  the Governor, the President of the Senate, and the Speaker of

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 1  the House of Representatives. Each agency shall be responsible

 2  for the accuracy of information entered into the Florida

 3  Accounting Information Resource Subsystem for use in this

 4  reporting.

 5         Section 29.  Section 17.12, Florida Statutes, is

 6  amended to read:

 7         17.12  Authorized to issue warrants to tax collector or

 8  sheriff for payment.--Whenever it shall appear to the

 9  satisfaction of the Chief Financial Officer Comptroller of

10  this state from examination of the books of his or her office

11  that the tax collector or the sheriff for any county in this

12  state has paid into the State Treasury, through mistake or

13  otherwise, a larger or greater sum than is actually due from

14  such said collector or sheriff, then the Chief Financial

15  Officer Comptroller may issue a warrant to such said collector

16  or sheriff for the sum so found to be overpaid.

17         Section 30.  Section 17.13, Florida Statutes, is

18  amended to read:

19         17.13  To duplicate warrants lost or destroyed.--

20         (1)  The Chief Financial Officer Comptroller is

21  required to duplicate any Chief Financial Officer's

22  Comptroller's warrants that may have been lost or destroyed,

23  or may hereafter be lost or destroyed, upon the owner thereof

24  or the owner's agent or attorney presenting the Chief

25  Financial Officer Comptroller the statement, under oath,

26  reciting the number, date, and amount of any warrant or the

27  best and most definite description in his or her knowledge and

28  the circumstances of its loss; if the Chief Financial Officer

29  Comptroller deems it necessary, the owner or the owner's agent

30  or attorney shall file in the office of the Chief Financial

31  Officer Comptroller a surety bond, or a bond with securities,

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 1  to be approved by one of the judges of the circuit court or

 2  one of the justices of the Supreme Court, in a penalty of not

 3  less than twice the amount of any warrants so duplicated,

 4  conditioned to indemnify the state and any innocent holders

 5  thereof from any damages that may accrue from such

 6  duplication.

 7         (2)  The Chief Financial Officer Comptroller is

 8  required to duplicate any Chief Financial Officer's

 9  Comptroller's warrant that may have been lost or destroyed, or

10  may hereafter be lost or destroyed, when sent to any payee via

11  any state agency when such warrant is lost or destroyed prior

12  to being received by the payee and provided the director of

13  the state agency to whom the warrant was sent presents to the

14  Chief Financial Officer Comptroller a statement, under oath,

15  reciting the number, date, and amount of the warrant lost or

16  destroyed, the circumstances surrounding the loss or

17  destruction of such warrant, and any additional information

18  that the Chief Financial Officer Comptroller shall request in

19  regard to such warrant.

20         (3)  Any duplicate Chief Financial Officer's

21  Comptroller's warrant issued in pursuance of the above

22  provisions shall be of the same validity as the original was

23  before its loss.

24         Section 31.  Section 17.14, Florida Statutes, is

25  amended to read:

26         17.14  To prescribe forms.--The Chief Financial Officer

27  Department of Banking and Finance may prescribe the forms of

28  all papers, vouchers, reports and returns and the manner of

29  keeping the accounts and papers to be used by the officers of

30  this state or other persons having accounts, claims, or

31  demands against the state or entrusted with the collection of

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 1  any of the revenue thereof or any demand due the same, which

 2  form shall be pursued by such officer or other persons.

 3         Section 32.  Section 17.16, Florida Statutes, is

 4  amended to read:

 5         17.16  Seal.--The seal of office of the Chief Financial

 6  Officer Comptroller of the state shall be the same as the seal

 7  heretofore used for that purpose.

 8         Section 33.  Section 17.17, Florida Statutes, is

 9  amended to read:

10         17.17  Examination by Governor and report.--The office

11  of Chief Financial Officer Comptroller of the state, and the

12  books, files, documents, records, and papers shall always be

13  subject to the examination of the Governor of this state, or

14  any person the Governor may authorize to examine the same; and

15  on the first day of January of each and every year, or oftener

16  if called for by the Governor, the Chief Financial Officer

17  Comptroller shall make a full report of all his or her

18  official acts and proceedings for the last fiscal year to the

19  Governor, to be laid before the Legislature with the

20  Governor's message, and shall make such further report as the

21  constitution may require.

22         Section 34.  Section 17.20, Florida Statutes, is

23  amended to read:

24         17.20  Assignment of claims for collection.--

25         (1)  The Chief Financial Officer Department of Banking

26  and Finance shall charge the state attorneys with the

27  collection of all claims that are placed in their hands for

28  collection of money or property for the state or any county or

29  special district, or that it otherwise requires them to

30  collect.  The charges are evidence of indebtedness of a state

31  attorney against whom any charge is made for the full amount

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 1  of the claim, until the charges have been collected and paid

 2  into the treasury of the state or of the county or special

 3  district or the legal remedies of the state have been

 4  exhausted, or until the state attorney demonstrates to the

 5  Chief Financial Officer department that the failure to collect

 6  the charges is not due to negligence and the Chief Financial

 7  Officer department has made a proper entry of satisfaction of

 8  the charge against the state attorney.

 9         (2)  The Chief Financial Officer department may assign

10  the collection of any claim to a collection agent who is

11  registered and in good standing pursuant to chapter 559, if

12  the Chief Financial Officer department determines the

13  assignation to be cost-effective.  The Chief Financial Officer

14  department may pay an agent from any amount collected under

15  the claim a fee that the Chief Financial Officer department

16  and the agent have agreed upon; may authorize the agent to

17  deduct the fee from the amount collected; may require the

18  appropriate state agency, county, or special district to pay

19  the agent the fee from any amount collected by the agent on

20  its behalf; or may authorize the agent to add the fee to the

21  amount to be collected.

22         (3)  Notwithstanding any other provision of law, in any

23  contract providing for the location or collection of unclaimed

24  property, the Chief Financial Officer department may authorize

25  the contractor to deduct its fees and expenses for services

26  provided under the contract from the unclaimed property that

27  the contractor has recovered or collected under the contract.

28  The Chief Financial Officer department shall annually report

29  to the Governor, President of the Senate, and the Speaker of

30  the House of Representatives the total amount collected or

31  

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 1  recovered by each contractor during the previous fiscal year

 2  and the total fees and expenses deducted by each contractor.

 3         Section 35.  Section 17.21, Florida Statutes, is

 4  amended to read:

 5         17.21  Not to allow any claim of state attorney against

 6  state until report made.--The Chief Financial Officer

 7  Comptroller shall not audit or allow any claim which any state

 8  attorney may have against the state for services who shall

 9  fail to make any report which by law the state attorney is

10  required to make to the Chief Financial Officer Comptroller of

11  claims of the state which it is his or her duty to collect.

12         Section 36.  Section 17.22, Florida Statutes, is

13  amended to read:

14         17.22  Notice to Department of Legal Affairs.--Whenever

15  the Chief Financial Officer Department of Banking and Finance

16  forwards any bond or account or claim for suit to any state

17  attorney, he or she it shall advise the Department of Legal

18  Affairs of the fact, giving it the amount of the claim and

19  other necessary particulars for its full information upon the

20  subject.

21         Section 37.  Section 17.25, Florida Statutes, is

22  amended to read:

23         17.25  May certify copies.--The Chief Financial Officer

24  Comptroller of this state may certify, under his or her seal

25  of office, copies of any record, paper, or document, by law

26  placed in the Chief Financial Officer's Comptroller's custody,

27  keeping, and care; and such certified copy shall have the same

28  force and effect as evidence as the original would have.

29         Section 38.  Sections (1) and (3) of section 17.26,

30  Florida Statutes, are amended to read:

31  

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 1         17.26  Cancellation of state warrants not presented

 2  within 1 year.--

 3         (1)  If any state warrant issued by the Chief Financial

 4  Officer or Comptroller against any fund in the State Treasury

 5  is not presented for payment within 1 year after the last day

 6  of the month in which it was originally issued, the Chief

 7  Financial Officer Comptroller may cancel the warrant and

 8  credit the amount of the warrant to the fund upon which it is

 9  drawn.  If the warrant so canceled was issued against a fund

10  that is no longer operative, the amount of the warrant shall

11  be credited to the General Revenue Fund. The Chief Financial

12  Officer Treasurer shall not honor any state warrant after it

13  has been canceled.

14         (3)  When a warrant canceled under subsection (1)

15  represents funds that are in whole or in part derived from

16  federal contributions and disposition of the funds under

17  chapter 717 would cause a loss of the federal contributions,

18  the Governor shall certify to the Chief Financial Officer

19  Comptroller that funds represented by such warrants are for

20  that reason exempt from treatment as unclaimed property.

21  Obligations represented by warrants are unenforceable after 1

22  year from the last day of the month in which the warrant was

23  originally issued.  An action may not be commenced thereafter

24  on the obligation unless authorized by the federal program

25  from which the original warrant was funded and unless payment

26  of the obligation is authorized to be made from the current

27  federal funding.  When a payee or person entitled to a warrant

28  subject to this paragraph requests payment, and payment from

29  current federal funding is authorized by the federal program

30  from which the original warrant was funded, the Chief

31  Financial Officer Comptroller may, upon investigation, issue a

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 1  new warrant to be paid out of the proper fund in the State

 2  Treasury, provided the payee or other person executes under

 3  oath the statement required by s. 17.13 or surrenders the

 4  canceled warrant.

 5         Section 39.  Subsections (1), (2), and (3) of section

 6  17.27, Florida Statutes, are amended to read:

 7         17.27  Microfilming and destroying records and

 8  correspondence.--

 9         (1)  The Department of Financial Services Banking and

10  Finance may destroy general correspondence files and also any

11  other records which the department may deem no longer

12  necessary to preserve in accordance with retention schedules

13  and destruction notices established under rules of the

14  Division of Library and Information Services, records and

15  information management program, of the Department of State.

16  Such schedules and notices relating to financial records of

17  the department shall be subject to the approval of the Auditor

18  General.

19         (2)  The Department of Financial Services Banking and

20  Finance may photograph, microphotograph, or reproduce on film

21  such documents and records as it may select, in such manner

22  that each page will be exposed in exact conformity with the

23  original.

24         (3)  The Department of Financial Services Banking and

25  Finance may destroy any of such said documents after they have

26  been photographed and filed in accordance with the provisions

27  of subsection (1).

28         Section 40.  Section 17.28, Florida Statutes, is

29  amended to read:

30         17.28  Chief Financial Officer Comptroller may

31  authorize biweekly salary payments.--The Chief Financial

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 1  Officer Comptroller is authorized and may permit biweekly

 2  salary payments to personnel upon written request by a

 3  specific state agency.  The Chief Financial Officer

 4  Comptroller shall adopt promulgate reasonable rules and

 5  regulations to carry out the intent of this section.

 6         Section 41.  Section 17.29, Florida Statutes, is

 7  amended to read:

 8         17.29  Authority to prescribe rules.--The Chief

 9  Financial Officer may Comptroller has authority to adopt rules

10  pursuant to ss. 120.54 and 120.536(1) to implement this

11  chapter and duties assigned by statute or the State

12  Constitution. Such rules may include, but are not limited to,

13  the following:

14         (1)  Procedures or policies relating to the processing

15  of payments from salaries, other personal services, or any

16  other applicable appropriation.

17         (2)  Procedures for processing interagency and

18  intraagency payments which do not require the issuance of a

19  state warrant.

20         Section 42.  Section 17.30, Florida Statutes, is

21  amended to read:

22         17.30  Dissemination of information.--The Chief

23  Financial Officer Comptroller may disseminate, in any form or

24  manner he or she considers appropriate, information regarding

25  the Chief Financial Officer's Comptroller's official duties.

26         Section 43.  Section 17.32, Florida Statutes, is

27  amended to read:

28         17.32  Annual report of trust funds; duties of Chief

29  Financial Officer Comptroller.--

30         (1)  On February 1 of each year, the Chief Financial

31  Officer Comptroller shall present to the President of the

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 1  Senate and the Speaker of the House of Representatives a

 2  report listing all trust funds as defined in s. 215.32.  The

 3  report shall contain the following data elements for each fund

 4  for the preceding fiscal year:

 5         (a)  The fund code.

 6         (b)  The title.

 7         (c)  The fund type according to generally accepted

 8  accounting principles.

 9         (d)  The statutory authority.

10         (e)  The beginning cash balance.

11         (f)  Direct revenues.

12         (g)  Nonoperating revenues.

13         (h)  Operating disbursements.

14         (i)  Nonoperating disbursements.

15         (j)  The ending cash balance.

16         (k)  The department and budget entity in which the fund

17  is located.

18         (2)  The report shall separately list all funds that

19  received no revenues other than interest earnings or transfers

20  from the General Revenue Fund or from other trust funds during

21  the preceding fiscal year.

22         (3)  The report shall separately list all funds that

23  had unencumbered balances in excess of $2 million in each of

24  the 2 preceding fiscal years.

25         Section 44.  Section 17.325, Florida Statutes, is

26  amended to read:

27         17.325  Governmental efficiency hotline; duties of

28  Chief Financial Officer Comptroller.--

29         (1)  By September 1, 1992, The Chief Financial Officer

30  Comptroller shall establish and operate a statewide toll-free

31  telephone hotline to receive information or suggestions from

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 1  the citizens of this state on how to improve the operation of

 2  government, increase governmental efficiency, and eliminate

 3  waste in government.  The Chief Financial Officer Comptroller

 4  shall report each month to the Appropriations Committee of the

 5  House of Representatives and of the Senate the information or

 6  suggestions received through the hotline and the evaluations

 7  and determinations made by the affected agency, as provided in

 8  subsection (3), with respect to such information or

 9  suggestions.

10         (2)  The Chief Financial Officer Comptroller shall

11  operate the hotline 24 hours a day. The Chief Financial

12  Officer Comptroller shall advertise the availability of the

13  hotline in newspapers of general circulation in this state and

14  shall provide for the posting of notices in conspicuous places

15  in state agency offices, city halls, county courthouses, and

16  places in which there is exposure to significant numbers of

17  the general public, including, but not limited to, local

18  convenience stores, shopping malls, shopping centers, gasoline

19  stations, or restaurants.  The Chief Financial Officer

20  Comptroller shall use the slogan "Tell us where we can 'Get

21  Lean'" for the hotline and in advertisements for the hotline.

22         (3)  Each telephone call on the hotline shall be

23  received by the office of the Chief Financial Officer

24  Comptroller, and the office of the Chief Financial Officer

25  Comptroller shall conduct an evaluation to determine if it is

26  appropriate for the telephone call to be processed as a "Get

27  Lean" telephone call. If it is determined that the telephone

28  call should be processed as a "Get Lean" telephone call, a

29  record of each suggestion or item of information received

30  shall be entered into a log kept by the Chief Financial

31  Officer Comptroller.  A caller on the hotline may remain

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 1  anonymous, and, if the caller provides his or her name, the

 2  name shall be confidential.  If a caller discloses that he or

 3  she is a state employee, the Chief Financial Officer

 4  Comptroller, in addition to maintaining a record as required

 5  by this section, may refer any information or suggestion from

 6  the caller to an existing state awards program administered by

 7  the affected agency.  The affected agency shall conduct a

 8  preliminary evaluation of the efficacy of any suggestion or

 9  item of information received through the hotline and shall

10  provide the Chief Financial Officer Comptroller with a

11  preliminary determination of the amount of revenues the state

12  might save by implementing the suggestion or making use of the

13  information.

14         (4)  Any person who provides any information through

15  the hotline shall be immune from liability for any use of such

16  information and shall not be subject to any retaliation by any

17  employee of the state for providing such information or making

18  such suggestion.

19         (5)  The Chief Financial Officer Comptroller shall

20  adopt any rule necessary to implement the establishment,

21  operation, and advertisement of the hotline.

22         Section 45.  Section 17.41, Florida Statutes, is

23  amended to read:

24         17.41  Department of Financial Services Banking and

25  Finance Tobacco Settlement Clearing Trust Fund.--

26         (1)  The Department of Financial Services Banking and

27  Finance Tobacco Settlement Clearing Trust Fund is created

28  within that department.

29         (2)  Funds to be credited to the Tobacco Settlement

30  Clearing Trust Fund shall consist of payments received by the

31  state from settlement of State of Florida v. American Tobacco

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 1  Co., No. 95-1466AH (Fla. 15th Cir. Ct. 1996). Moneys received

 2  from the settlement and deposited into the trust fund are

 3  exempt from the service charges imposed under s. 215.20.

 4         (3)(a)  Subject to approval of the Legislature, all or

 5  any portion of the state's right, title, and interest in and

 6  to the tobacco settlement agreement may be sold to the Tobacco

 7  Settlement Financing Corporation created pursuant to s.

 8  215.56005.  Any such sale shall be a true sale and not a

 9  borrowing.

10         (b)  Any moneys received by the state pursuant to any

11  residual interest retained in the tobacco settlement agreement

12  or the payments to be made under the tobacco settlement

13  agreement shall be deposited into the Tobacco Settlement

14  Clearing Trust Fund.

15         (4)  Net proceeds of the sale of the tobacco settlement

16  agreement received by the state shall be immediately deposited

17  into the Lawton Chiles Endowment Fund, created in s. 215.5601,

18  without deposit to the Tobacco Settlement Clearing Trust Fund.

19         (5)  The department shall disburse funds, by

20  nonoperating transfer, from the Tobacco Settlement Clearing

21  Trust Fund to the tobacco settlement trust funds of the

22  various agencies in amounts equal to the annual appropriations

23  made from those agencies' trust funds in the General

24  Appropriations Act.

25         (6)  Pursuant to the provisions of s. 19(f)(3), Art.

26  III of the State Constitution, the Tobacco Settlement Clearing

27  Trust Fund is exempt from the termination provisions of s.

28  19(f)(2), Art. III of the State Constitution.

29         Section 46.  Section 17.43, Florida Statutes, is

30  amended to read:

31  

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 1         17.43  Chief Financial Officer's Comptroller's Federal

 2  Equitable Sharing Trust Fund.--

 3         (1)  The Chief Financial Officer's Comptroller's

 4  Federal Equitable Sharing Trust Fund is created within the

 5  Department of Financial Services Banking and Finance. The

 6  department may deposit into the trust fund receipts and

 7  revenues received as a result of federal criminal,

 8  administrative, or civil forfeiture proceedings and receipts

 9  and revenues received from federal asset-sharing programs. The

10  trust fund is exempt from the service charges imposed by s.

11  215.20.

12         (2)  Notwithstanding the provisions of s. 216.301 and

13  pursuant to s. 216.351, any balance in the trust fund at the

14  end of any fiscal year shall remain in the trust fund at the

15  end of the year and shall be available for carrying out the

16  purposes of the trust fund.

17         Section 47.  Section 18.01, Florida Statutes, is

18  transferred, renumbered as section 17.51, Florida Statutes,

19  and amended to read:

20         17.51 18.01  Oath and certificate of Chief Financial

21  Officer Treasurer.--The Chief Financial Officer Treasurer

22  shall, within 10 days before he or she enters upon the duties

23  of office, take and subscribe an oath or affirmation

24  faithfully to discharge the duties of office, which oath or

25  affirmation must be deposited with the Department of State.

26  The Chief Financial Officer Treasurer shall also file with the

27  Department of State a certificate from the Comptroller

28  attesting that the retiring Treasurer or Chief Financial

29  Officer has turned over vouchers for all payments made as

30  required by law, and that the Treasurer's account has been

31  truly credited with the same, and that he or she has filed

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 1  receipts from his or her successor for all vouchers paid since

 2  the end of last quarter, and for balance of cash, and for all

 3  bonds and other securities held by the Treasurer or Chief

 4  Financial Officer as such, and a certificate from each board

 5  of which he or she is made by law ex officio treasurer, that

 6  he or she has satisfactorily accounted to such board as its

 7  treasurer.

 8         Section 48.  Section 18.02, Florida Statutes, is

 9  transferred, renumbered as section 17.52, Florida Statutes,

10  and amended to read:

11         17.52 18.02  Moneys paid on warrants.--The Division of

12  Treasury Treasurer shall pay all warrants on the treasury

13  drawn by the Chief Financial Officer or Comptroller and other

14  orders by the Chief Financial Officer or Comptroller for the

15  disbursement of state funds by electronic means or by means of

16  a magnetic tape or any other transfer medium. No moneys shall

17  be paid out of the treasury except on such warrants or other

18  orders of the Chief Financial Officer or Comptroller.

19         Section 49.  Section 18.021, Florida Statutes, is

20  transferred, renumbered as section 17.53, Florida Statutes,

21  and amended to read:

22         17.53 18.021  Chief Financial Officer Treasurer to

23  operate personal check-cashing service.--

24         (1)  The Chief Financial Officer Treasurer is

25  authorized to operate a personal check-cashing service or a

26  remote financial service unit at the capitol for the benefit

27  of state employees or other responsible persons who properly

28  identify themselves.

29         (2)  If a personal check is dishonored or a state

30  warrant is forged and the Chief Financial Officer Treasurer

31  has made diligent but unsuccessful effort to collect and has

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 1  forwarded the returned check for prosecution by the

 2  appropriate state attorney, then he or she may include such

 3  amount in his or her budget request to be considered during

 4  the next legislative session.

 5         Section 50.  Section 18.05, Florida Statutes, is

 6  transferred, renumbered as section 17.54, Florida Statutes,

 7  and amended to read:

 8         17.54 18.05  Annual report to Governor.--The Chief

 9  Financial Officer Treasurer shall make a report in detail to

10  the Governor, with a copy to the President of the Senate and

11  the Speaker of the House of Representatives as soon after the

12  1st day of July of each year as it is practicable to prepare

13  same of the transactions of the Division of Treasury his or

14  her office for the preceding fiscal year, embracing a

15  statement of the receipts and payments on account of each of

16  the several funds of which he or she has the care and custody.

17         Section 51.  Section 18.06, Florida Statutes, is

18  transferred, renumbered as section 17.55, Florida Statutes,

19  and amended to read:

20         17.55 18.06  Examination by and monthly statements to

21  the Governor.--The office of the Chief Financial Officer

22  Treasurer of this state, and the books, files, documents,

23  records, and papers thereof, shall always be subject to the

24  examination of the Governor of the state, or any person he or

25  she may authorize to examine same. The Chief Financial Officer

26  Treasurer shall exhibit to the Governor monthly a trial

27  balance sheet from the Division of Treasury his or her books

28  and a statement of all the credits, moneys, or effects on hand

29  on the day for which such said trial balance sheet is made,

30  and such said statement accompanying such said trial balance

31  sheet shall particularly describe the exact character of

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 1  funds, credits, and securities, and shall state in detail the

 2  amount which he or she may have representing cash, including

 3  any not yet entered upon the books of his or her office, and

 4  such statement shall be certified and signed by the Chief

 5  Financial Officer Treasurer officially.

 6         Section 52.  Section 18.07, Florida Statutes, is

 7  transferred, renumbered as section 17.555, Florida Statutes,

 8  and amended to read:

 9         17.555 18.07  Division of Treasury Treasurer to keep

10  record of warrants and of state funds and securities.--The

11  Division of Treasury Treasurer shall keep a record of the

12  warrants or other orders of the Chief Financial Officer

13  Comptroller which the Division of Treasury Treasurer pays and

14  shall account for all state funds and securities.

15         Section 53.  Section 18.091, Florida Statutes, is

16  transferred, renumbered as section 17.556, Florida Statutes,

17  and amended to read:

18         17.556 18.091  Legislative sessions; additional

19  employees.--

20         (1)  Hereafter during any period of time the

21  Legislature of Florida may be in actual session, the Chief

22  Financial Officer Treasurer is empowered to employ additional

23  persons to assist in performing the services required of the

24  Chief Financial Officer Treasurer in connection with s.

25  17.53(1) s. 18.021(1). The salaries to be paid such employees

26  of the Chief Financial Officer Treasurer shall not be in

27  excess of the highest salary paid by the House of

28  Representatives or the state Senate for secretarial services;

29  and the salaries for said employees shall begin with the

30  convening of the Legislature in session and shall continue for

31  not more than 7 days after the close of the legislative

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 1  session; provided, that recesses of the Legislature not in

 2  excess of 3 days shall be considered as time during which the

 3  Legislature is actually in session.

 4         (2)  In addition to the regular annual appropriations

 5  for the Chief Financial Officer Treasurer, there is hereby

 6  appropriated for use of the Chief Financial Officer Treasurer

 7  from the General Revenue Fund, from time to time as necessary,

 8  sufficient sums to pay the salaries of the above-described

 9  employees of the Treasurer.

10         Section 54.  Section 18.08, Florida Statutes, is

11  transferred, renumbered as section 17.56, Florida Statutes,

12  and amended to read:

13         17.56 18.08  Division of Treasury Treasurer to turn

14  over to the Division of Accounting and Auditing Comptroller

15  all warrants paid.--The Division of Treasury Treasurer shall

16  turn over to the Division of Accounting and Auditing

17  Comptroller, through the data service center, all warrants

18  drawn by the Chief Financial Officer or the Comptroller and

19  paid by the Division of Treasury Treasurer.  The Said warrants

20  shall be turned over as soon as the Division of Treasury

21  Treasurer shall have recorded such warrants and charged the

22  same against the accounts upon which such warrants are drawn.

23         Section 55.  Section 18.10, Florida Statutes, is

24  transferred, renumbered as section 17.57, Florida Statutes,

25  and amended to read:

26         17.57 18.10  Deposits and investments of state money.--

27         (1)  The Chief Financial Officer Treasurer, or other

28  parties with the permission of the Chief Financial Officer

29  Treasurer, shall deposit the money of the state or any money

30  in the State Treasury in such qualified public depositories of

31  the state as will offer satisfactory collateral security for

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 1  such deposits, pursuant to chapter 280. It is the duty of the

 2  Chief Financial Officer Treasurer, consistent with the cash

 3  requirements of the state, to keep such money fully invested

 4  or deposited as provided herein in order that the state may

 5  realize maximum earnings and benefits.

 6         (2)  The Chief Financial Officer Treasurer shall make

 7  funds available to meet the disbursement needs of the state.

 8  Funds which are not needed for this purpose shall be placed in

 9  qualified public depositories that will pay rates established

10  by the Chief Financial Officer Treasurer at levels not less

11  than the prevailing rate for United States Treasury securities

12  with a corresponding maturity. In the event money is available

13  for interest-bearing time deposits or savings accounts as

14  provided herein and qualified public depositories are

15  unwilling to accept such money and pay thereon the rates

16  established above, then such money which qualified public

17  depositories are unwilling to accept shall be invested in:

18         (a)  Direct United States Treasury obligations.

19         (b)  Obligations of the Federal Farm Credit Banks.

20         (c)  Obligations of the Federal Home Loan Bank and its

21  district banks.

22         (d)  Obligations of the Federal Home Loan Mortgage

23  Corporation, including participation certificates.

24         (e)  Obligations guaranteed by the Government National

25  Mortgage Association.

26         (f)  Obligations of the Federal National Mortgage

27  Association.

28         (g)  Commercial paper of prime quality of the highest

29  letter and numerical rating as provided for by at least one

30  nationally recognized rating service.

31  

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 1         (h)  Time drafts or bills of exchange drawn on and

 2  accepted by a commercial bank, otherwise known as "bankers

 3  acceptances," which are accepted by a member bank of the

 4  Federal Reserve System having total deposits of not less than

 5  $400 million or which are accepted by a commercial bank which

 6  is not a member of the Federal Reserve System with deposits of

 7  not less than $400 million and which is licensed by a state

 8  government or the Federal Government, and whose senior debt

 9  issues are rated in one of the two highest rating categories

10  by a nationally recognized rating service and which are held

11  in custody by a domestic bank which is a member of the Federal

12  Reserve System.

13         (i)  Corporate obligations or corporate master notes of

14  any corporation within the United States, if the long-term

15  obligations of such corporation are rated by at least two

16  nationally recognized rating services in any one of the four

17  highest classifications. However, if such obligations are

18  rated by only one nationally recognized rating service, then

19  the obligations shall be rated in any one of the two highest

20  classifications.

21         (j)  Obligations of the Student Loan Marketing

22  Association.

23         (k)  Obligations of the Resolution Funding Corporation.

24         (l)  Asset-backed or mortgage-backed securities of the

25  highest credit quality.

26         (m)  Any obligations not previously listed which are

27  guaranteed as to principal and interest by the full faith and

28  credit of the United States Government or are obligations of

29  United States agencies or instrumentalities which are rated in

30  the highest category by a nationally recognized rating

31  service.

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 1         (n)  Commingled no-load investment funds or no-load

 2  mutual funds in which all securities held by the funds are

 3  authorized in this subsection.

 4         (o)  Money market mutual funds as defined and regulated

 5  by the Securities and Exchange Commission.

 6         (p)  Obligations of state and local governments rated

 7  in any of the four highest classifications by at least two

 8  nationally recognized rating services. However, if such

 9  obligations are rated by only one nationally recognized rating

10  service, then the obligations shall be rated in any one of the

11  two highest classifications.

12         (q)  Derivatives of investment instruments authorized

13  in paragraphs (a)-(m).

14         (r)  Covered put and call options on investment

15  instruments authorized in this subsection for the purpose of

16  hedging transactions by investment managers to mitigate risk

17  or to facilitate portfolio management.

18         (s)  Negotiable certificates of deposit issued by

19  financial institutions whose long-term debt is rated in one of

20  the three highest categories by at least two nationally

21  recognized rating services, the investment in which shall not

22  be prohibited by any provision of chapter 280.

23         (t)  Foreign bonds denominated in United States dollars

24  and registered with the Securities and Exchange Commission for

25  sale in the United States, if the long-term obligations of

26  such issuers are rated by at least two nationally recognized

27  rating services in any one of the four highest

28  classifications. However, if such obligations are rated by

29  only one nationally recognized rating service, the obligations

30  shall be rated in any one of the two highest classifications.

31  

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 1         (u)  Convertible debt obligations of any corporation

 2  domiciled within the United States, if the convertible debt

 3  issue is rated by at least two nationally recognized rating

 4  services in any one of the four highest classifications.

 5  However, if such obligations are rated by only one nationally

 6  recognized rating service, then the obligations shall be rated

 7  in any one of the two highest classifications.

 8         (v)  Securities not otherwise described in this

 9  subsection. However, not more than 3 percent of the funds

10  under the control of the Chief Financial Officer Treasurer

11  shall be invested in securities described in this paragraph.

12  

13  These investments may be in varying maturities and may be in

14  book-entry form. Investments made pursuant to this subsection

15  may be under repurchase agreement. The Chief Financial Officer

16  may Treasurer is authorized to hire registered investment

17  advisers and other consultants to assist in investment

18  management and to pay fees directly from investment earnings.

19  Investment securities, proprietary investment services related

20  to contracts, performance evaluation services,

21  investment-related equipment or software used directly to

22  assist investment trading or investment accounting operations

23  including bond calculators, telerates, Bloombergs, special

24  program calculators, intercom systems, and software used in

25  accounting, communications, and trading, and advisory and

26  consulting contracts made under this section are exempt from

27  the provisions of chapter 287.

28         (3)  In the event the financial institutions in the

29  state do not make sufficient loan funds available for a

30  residential conservation program pursuant to any plan approved

31  by the Florida Public Service Commission under the Florida

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 1  Energy Efficiency and Conservation Act, the board may

 2  authorize the investment of state funds, except retirement

 3  trust funds, in such a loan program at rates not less than

 4  prevailing United States Treasury bill rates. However, prior

 5  to investment of such funds, the Florida Public Service

 6  Commission shall develop a plan which must be approved by the

 7  Legislature before implementation.

 8         (4)  All earnings on any investments made pursuant to

 9  this section are hereby appropriated to the General Revenue

10  Fund, except that earnings attributable to moneys made

11  available pursuant to s. 17.61(3) s. 18.125(3)(a) and (b)

12  shall be credited pro rata to the funds from which such moneys

13  were made available.

14         (5)  The fact that a municipal officer or a state

15  officer, including an officer of any municipal or state

16  agency, board, bureau, commission, institution, or department,

17  is a stockholder or an officer or director of a bank or

18  savings and loan association will not bar such bank or savings

19  and loan association from being a depository of funds coming

20  under the jurisdiction of any such municipal officer or state

21  officer if it shall appear in the records of the municipal or

22  state office that the governing body of such municipality or

23  state agency has investigated and determined that such

24  municipal or state officer is not favoring such banks or

25  savings and loan associations over other qualified banks or

26  savings and loan associations.

27         (6)  The Chief Financial Officer Treasurer is

28  designated the cash management officer for the state and is

29  charged with the coordination and supervision of procedures

30  providing for the efficient handling of financial assets under

31  the control of the State Treasury and each of the various

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 1  state agencies, and of the judicial branch, as defined in s.

 2  216.011.  This responsibility shall include the supervision

 3  and approval of all banking relationships.  Pursuant to this

 4  responsibility, the Chief Financial Officer may Treasurer is

 5  authorized to obtain information from financial institutions

 6  regarding depository accounts maintained by any agency or

 7  institution of the State of Florida.

 8         Section 56.  Effective July 1, 2003, subsection (4) of

 9  section 17.57, Florida Statutes, as amended by this act, is

10  amended to read:

11         17.57  Deposits and investments of state money.--

12         (4)  All earnings on any investments made pursuant to

13  this section shall be credited to the General Revenue Fund,

14  except that earnings attributable to moneys made available

15  pursuant to s. 17.61(3) s. 18.125(3) shall be credited pro

16  rata to the funds from which such moneys were made available.

17         Section 57.  Section 18.101, Florida Statutes, is

18  transferred, renumbered as section 17.58, Florida Statutes,

19  and amended to read:

20         17.58 18.101  Deposits of public money outside the

21  State Treasury; revolving funds.--

22         (1)  All moneys collected by state agencies, boards,

23  bureaus, commissions, institutions, and departments shall,

24  except as otherwise provided by law, be deposited in the State

25  Treasury. However, when the volume and complexity of

26  collections so justify, the Chief Financial Officer Treasurer

27  may give written approval for such moneys to be deposited in

28  clearing accounts outside the State Treasury in qualified

29  public depositories pursuant to chapter 280. Such deposits

30  shall only be made in depositories designated by the Chief

31  Financial Officer Treasurer. No money may be maintained in

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 1  such clearing accounts for a period longer than approved by

 2  the Chief Financial Officer Treasurer or 40 days, whichever is

 3  shorter, prior to its being transmitted to the Chief Financial

 4  Officer Treasurer or to an account designated by him or her,

 5  distributed to a statutorily authorized account outside the

 6  State Treasury, refunded, or transmitted to the Department of

 7  Revenue. All depositories so designated shall pledge

 8  sufficient collateral to be security for such funds as

 9  provided in chapter 280.

10         (2)  Revolving funds authorized by the Chief Financial

11  Officer Comptroller for all state agencies, boards, bureaus,

12  commissions, institutions, and departments may be deposited by

13  such agencies, boards, bureaus, commissions, institutions, and

14  departments in qualified public depositories designated by the

15  Chief Financial Officer Treasurer for such revolving fund

16  deposits; and the depositories in which such deposits are made

17  shall pledge collateral security as provided in chapter 280.

18         (3)  Notwithstanding the foregoing provisions, clearing

19  and revolving accounts may be established outside the state

20  when necessary to facilitate the authorized operations of any

21  agency, board, bureau, commission, institution, or department.

22  Any of such accounts established in the United States shall be

23  subject to the collateral security requirements of chapter

24  280. Accounts established outside the United States may be

25  exempted from the requirements of chapter 280 as provided in

26  chapter 280; but before any unsecured account is established,

27  the agency requesting or maintaining the account shall

28  recommend a financial institution to the Chief Financial

29  Officer Treasurer for designation to hold the account and

30  shall submit evidence of the financial condition, size,

31  reputation, and relative prominence of the institution from

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 1  which the Chief Financial Officer Treasurer can reasonably

 2  conclude that the institution is financially sound before

 3  designating it to hold the account.

 4         (4)  Each department shall furnish a statement to the

 5  Chief Financial Officer Treasurer, on or before the 20th of

 6  the month following the end of each calendar quarter, listing

 7  each clearing account and revolving fund within that

 8  department's jurisdiction. Such statement shall report, as of

 9  the last day of the calendar quarter, the cash balance in each

10  revolving fund and that portion of the cash balance in each

11  clearing account that will eventually be deposited to the

12  State Treasury as provided by law. The Chief Financial Officer

13  Treasurer shall show the sum total of state funds in clearing

14  accounts and revolving funds, as most recently reported to the

15  Chief Financial Officer Treasurer by various departments, in

16  his or her monthly statement to the Governor, pursuant to s.

17  17.55 s. 18.06.

18         Section 58.  Section 18.103, Florida Statutes, is

19  transferred, renumbered as section 17.59, Florida Statutes,

20  and amended to read:

21         17.59 18.103  Safekeeping services of Treasurer.--

22         (1)  The Chief Financial Officer Treasurer may accept

23  for safekeeping purposes, deposits of cash, securities, and

24  other documents or articles of value from any state agency as

25  defined in s. 216.011, or any county, city, or political

26  subdivision thereof, or other public authority.

27         (2)  The Chief Financial Officer Treasurer may, in his

28  or her discretion, establish a fee for processing, servicing,

29  and safekeeping deposits and other documents or articles of

30  value held in the Chief Financial Officer's Treasurer's vaults

31  as requested by the various entities or as provided for by

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 1  law.  Such fee shall be equivalent to the fee charged by

 2  financial institutions for processing, servicing, and

 3  safekeeping the same types of deposits and other documents or

 4  articles of value.

 5         (3)  The Chief Financial Officer Treasurer shall

 6  collect in advance, and persons so served shall pay to the

 7  Chief Financial Officer Treasurer in advance, the

 8  miscellaneous charges as follows:

 9         (a)  For copies of documents or records on file with

10  the Chief Financial Officer Treasurer, per page..........$.50.

11         (b)  For each certificate of the Chief Financial

12  Officer Treasurer, certified or under the Chief Financial

13  Officer's Treasurer's seal, authenticating any document or

14  other instrument........................................$5.00.

15         (4)  All fees collected for the services described in

16  this section shall be deposited in the Treasury Treasurer's

17  Administrative and Investment Trust Fund.

18         Section 59.  Section 18.104, Florida Statutes, is

19  transferred, renumbered as section 17.60, Florida Statutes,

20  and amended to read:

21         17.60 18.104  Treasury Cash Deposit Trust Fund.--

22         (1)  There is hereby created in the State Treasury the

23  Treasury Cash Deposit Trust Fund.  Cash deposits made pursuant

24  to s. 17.59 s. 18.103 shall be deposited into this fund.

25         (2)  Interest earned on cash deposited into this fund

26  shall be prorated and paid to the depositing entities.

27         Section 60.  Section 18.125, Florida Statutes, is

28  transferred, renumbered as section 17.61, Florida Statutes,

29  and amended to read:

30         17.61 18.125  Chief Financial Officer Treasurer; powers

31  and duties in the investment of certain funds.--

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 1         (1)  The Chief Financial Officer Treasurer, acting with

 2  the approval of a majority of the State Board of

 3  Administration, shall invest all general revenue funds and all

 4  the trust funds and all agency funds of each state agency, and

 5  of the judicial branch, as defined in s. 216.011, and may,

 6  upon request, invest funds of any statutorily created board,

 7  association, or entity, except for the funds required to be

 8  invested pursuant to ss. 215.44-215.53, by the procedure and

 9  in the authorized securities prescribed in s. 17.57 s. 18.10;

10  for this purpose, the Chief Financial Officer may Treasurer

11  shall be authorized to open and maintain one or more demand

12  and safekeeping accounts in any bank or savings association

13  for the investment and reinvestment and the purchase, sale,

14  and exchange of funds and securities in the accounts.  Funds

15  in such accounts used solely for investments and reinvestments

16  shall be considered investment funds and not funds on deposit,

17  and such funds shall be exempt from the provisions of chapter

18  280.  In addition, the securities or investments purchased or

19  held under the provisions of this section and s. 17.57 s.

20  18.10 may be loaned to securities dealers and banks and may be

21  registered by the Chief Financial Officer Treasurer in the

22  name of a third-party nominee in order to facilitate such

23  loans, provided the loan is collateralized by cash or United

24  States government securities having a market value of at least

25  100 percent of the market value of the securities loaned. The

26  Chief Financial Officer Treasurer shall keep a separate

27  account, designated by name and number, of each fund.

28  Individual transactions and totals of all investments, or the

29  share belonging to each fund, shall be recorded in the

30  accounts.

31  

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 1         (2)  By and with the consent and approval of any

 2  constitutional board, the judicial branch, or agency now

 3  having the constitutional power to make investments and in

 4  accordance with this section, the Chief Financial Officer may

 5  Treasurer shall have the power to make purchases, sales,

 6  exchanges, investments, and reinvestments for and on behalf of

 7  any such board.

 8         (3)(a)  Except as otherwise provided in this

 9  subsection, it is the duty of each state agency, and of the

10  judicial branch, now or hereafter charged with the

11  administration of the funds referred to in subsection (1) to

12  make such moneys available for investment as fully as is

13  consistent with the cash requirements of the particular fund

14  and to authorize investment of such moneys by the Chief

15  Financial Officer Treasurer.

16         (b)  Monthly, and more often as circumstances require,

17  such agency or judicial branch shall notify the Chief

18  Financial Officer Treasurer of the amount available for

19  investment; and the moneys shall be invested by the Chief

20  Financial Officer Treasurer.  Such notification shall include

21  the name and number of the fund for which the investments are

22  to be made and the life of the investment if the principal sum

23  is to be required for meeting obligations.  This subsection,

24  however, shall not be construed to make available for

25  investment any funds other than those referred to in

26  subsection (1).

27         (c)  Except as provided in this paragraph and except

28  for moneys described in paragraph (d), the following agencies

29  shall not invest trust fund moneys as provided in this

30  section, but shall retain such moneys in their respective

31  

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 1  trust funds for investment, with interest appropriated to the

 2  General Revenue Fund, pursuant to s. 17.57 s. 18.10:

 3         1.  The Agency for Health Care Administration, except

 4  for the Tobacco Settlement Trust Fund.

 5         2.  The Department of Children and Family Services,

 6  except for:

 7         a.  The Alcohol, Drug Abuse, and Mental Health Trust

 8  Fund.

 9         b.  The Community Resources Development Trust Fund.

10         c.  The Refugee Assistance Trust Fund.

11         d.  The Social Services Block Grant Trust Fund.

12         e.  The Tobacco Settlement Trust Fund.

13         f.  The Working Capital Trust Fund.

14         3.  The Department of Community Affairs, only for the

15  Operating Trust Fund.

16         4.  The Department of Corrections.

17         5.  The Department of Elderly Affairs, except for:

18         a.  The Federal Grants Trust Fund.

19         b.  The Tobacco Settlement Trust Fund.

20         6.  The Department of Health, except for:

21         a.  The Federal Grants Trust Fund.

22         b.  The Grants and Donations Trust Fund.

23         c.  The Maternal and Child Health Block Grant Trust

24  Fund.

25         d.  The Tobacco Settlement Trust Fund.

26         7.  The Department of Highway Safety and Motor

27  Vehicles, only for:

28         a.  The DUI Programs Coordination Trust Fund.

29         b.  The Security Deposits Trust Fund.

30         8.  The Department of Juvenile Justice.

31  

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 1         9.  The Department of Labor and Employment Security,

 2  only for the Administrative Trust Fund.

 3         10.  The Department of Law Enforcement.

 4         11.  The Department of Legal Affairs.

 5         12.  The Department of State, only for:

 6         a.  The Grants and Donations Trust Fund.

 7         b.  The Records Management Trust Fund.

 8         13.  The Executive Office of the Governor, only for:

 9         a.  The Economic Development Transportation Trust Fund.

10         b.  The Economic Development Trust Fund.

11         14.  The Florida Public Service Commission, only for

12  the Florida Public Service Regulatory Trust Fund.

13         15.  The Justice Administrative Commission.

14         16.  The state courts system.

15         (d)  Moneys in any trust funds of the agencies in

16  paragraph (c) may be invested pursuant to the provisions of

17  this section if:

18         1.  Investment of such moneys and the retention of

19  interest is required by federal programs or mandates;

20         2.  Investment of such moneys and the retention of

21  interest is required by bond covenants, indentures, or

22  resolutions;

23         3.  Such moneys are held by the state in a trustee

24  capacity as an agent or fiduciary for individuals, private

25  organizations, or other governmental units; or

26         4.  The Executive Office of the Governor determines,

27  after consultation with the Legislature pursuant to the

28  procedures of s. 216.177, that federal matching funds or

29  contributions or private grants to any trust fund would be

30  lost to the state.

31  

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 1         (4)(a)  There is hereby created in the State Treasury

 2  the Treasury Treasurer's Administrative and Investment Trust

 3  Fund.

 4         (b)  The Chief Financial Officer Treasurer shall make

 5  an annual assessment of 0.12 percent against the average daily

 6  balance of those moneys made available pursuant to this

 7  section and 0.2 percent against the average daily balance of

 8  those funds requiring investment in a separate account. The

 9  proceeds of this assessment shall be deposited in the Treasury

10  Treasurer's Administrative and Investment Trust Fund.

11         (c)  The moneys so received and deposited in the fund

12  shall be used by the Chief Financial Officer Treasurer to

13  defray the expense of his or her office in the discharge of

14  the administrative and investment powers and duties prescribed

15  by this section and this chapter, including the maintaining of

16  an office and necessary supplies therefor, essential equipment

17  and other materials, salaries and expenses of required

18  personnel, and all other legitimate expenses relating to the

19  administrative and investment powers and duties imposed upon

20  and charged to the Chief Financial Officer Treasurer under

21  this section and this chapter. The unencumbered balance in the

22  trust fund at the close of each quarter shall not exceed

23  $750,000. Any funds in excess of this amount shall be

24  transferred unallocated to the General Revenue Fund. However,

25  fees received from deferred compensation participants pursuant

26  to s. 112.215 shall not be transferred to the General Revenue

27  Fund and shall be used to operate the deferred compensation

28  program.

29         (5)  The transfer of the powers, duties, and

30  responsibilities of existing state agencies and of the

31  judicial branch made by this section to the Chief Financial

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 1  Officer Treasurer shall include only the particular powers,

 2  duties, and responsibilities hereby transferred, and all other

 3  existing powers shall in no way be affected by this section.

 4         Section 61.  Effective July 1, 2003, subsection (3) of

 5  section 17.61, Florida Statutes, as amended by this act, is

 6  amended to read:

 7         17.61  Chief Financial Officer; powers and duties in

 8  the investment of certain funds.--

 9         (3)(a)  It is the duty of each state agency, and of the

10  judicial branch, now or hereafter charged with the

11  administration of the funds referred to in subsection (1) to

12  make such moneys available for investment as fully as is

13  consistent with the cash requirements of the particular fund

14  and to authorize investment of such moneys by the Chief

15  Financial Officer Treasurer.

16         (b)  Monthly, and more often as circumstances require,

17  such agency or judicial branch shall notify the Chief

18  Financial Officer Treasurer of the amount available for

19  investment; and the moneys shall be invested by the Chief

20  Financial Officer Treasurer.  Such notification shall include

21  the name and number of the fund for which the investments are

22  to be made and the life of the investment if the principal sum

23  is to be required for meeting obligations.  This subsection,

24  however, shall not be construed to make available for

25  investment any funds other than those referred to in

26  subsection (1).

27         Section 62.  Section 18.15, Florida Statutes, is

28  transferred, renumbered as section 17.62, Florida Statutes,

29  and amended to read:

30         17.62 18.15  Interest on state moneys deposited; when

31  paid.--Interest on state moneys deposited in qualified public

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 1  depositories under s. 17.57 s. 18.10 shall be payable to the

 2  Chief Financial Officer Treasurer quarterly or semiannually.

 3         Section 63.  Section 18.17, Florida Statutes, is

 4  transferred, renumbered as section 17.63, Florida Statutes,

 5  and amended to read:

 6         17.63 18.17  Chief Financial Officer Treasurer not to

 7  issue evidences of indebtedness.--It is not lawful for the

 8  Chief Financial Officer Treasurer of this state to issue any

 9  treasury certificates, or any other evidences of indebtedness,

10  for any purpose whatever, and the Chief Financial Officer

11  Treasurer is prohibited from issuing the same.

12         Section 64.  Section 18.20, Florida Statutes, is

13  transferred, renumbered as section 17.64, Florida Statutes,

14  and amended to read:

15         17.64 18.20  Division of Treasury Treasurer to make

16  reproductions of certain warrants, records, and documents.--

17         (1)  All vouchers or checks heretofore or hereafter

18  drawn by appropriate court officials of the several counties

19  of the state against money deposited with the Treasurer under

20  the provisions of s. 43.17, and paid by the Treasurer, may be

21  photographed, microphotographed, or reproduced on film by the

22  Treasurer. Such photographic film shall be durable material

23  and the device used to so reproduce such warrants, vouchers,

24  or checks shall be one which accurately reproduces the

25  originals thereof in all detail; and such photographs,

26  microphotographs, or reproductions on film shall be placed in

27  conveniently accessible and identified files and shall be

28  preserved by the Treasurer as a part of the permanent records

29  of office.  When any such warrants, vouchers, or checks have

30  been so photographed, microphotographed, or reproduced on

31  film, and the photographs, microphotographs, or reproductions

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 1  on film thereof have been placed in files as a part of the

 2  permanent records of the office of the Treasurer as aforesaid,

 3  the Treasurer is authorized to return such warrants, vouchers,

 4  or checks to the offices of the respective county officials

 5  who drew the same and such warrants, vouchers, or checks shall

 6  be retained and preserved in such offices to which returned as

 7  a part of the permanent records of such offices.

 8         (1)(2)  Such Photographs, microphotographs, or

 9  reproductions on film of said warrants, vouchers, or checks

10  shall be deemed to be original records for all purposes; and

11  any copy or reproduction thereof made from such original film,

12  duly certified by the Division of Treasury Treasurer as a true

13  and correct copy or reproduction made from such film, shall be

14  deemed to be a transcript, exemplification or certified copy

15  of the original warrant, voucher, or check such copy

16  represents, and shall in all cases and in all courts and

17  places be admitted and received in evidence with the like

18  force and effect as the original thereof might be.

19         (2)(3)  The Division of Treasury may Treasurer is also

20  hereby authorized to photograph, microphotograph, or reproduce

21  on film, all records and documents of the division said

22  office, as the Chief Financial Officer Treasurer may, in his

23  or her discretion, selects select; and the division may said

24  Treasurer is hereby authorized to destroy any such of the said

25  documents or records after they have been photographed and

26  filed and after audit of the division Treasurer's office has

27  been completed for the period embracing the dates of such said

28  documents and records.

29         (3)(4)  Photographs or microphotographs in the form of

30  film or prints of any records made in compliance with the

31  provisions of this section shall have the same force and

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 1  effect as the originals thereof would have, and shall be

 2  treated as originals for the purpose of their admissibility in

 3  evidence. Duly certified or authenticated reproductions of

 4  such photographs or microphotographs shall be admitted in

 5  evidence equally with the original photographs or

 6  microphotographs.

 7         Section 65.  Section 18.23, Florida Statutes, is

 8  transferred, renumbered as section 17.65, Florida Statutes,

 9  and amended to read:

10         17.65 18.23  Chief Financial Officer Treasurer to

11  prescribe forms.--The Chief Financial Officer Treasurer may

12  prescribe the forms, and the manner of keeping the same, for

13  all receipts, credit advices, abstracts, reports, and other

14  papers furnished the Chief Financial Officer Treasurer by the

15  officers of this state or other persons or entities as a

16  result of their having, or depositing, state moneys.

17         Section 66.  Section 18.24, Florida Statutes, is

18  transferred, renumbered as section 17.66, Florida Statutes,

19  and amended to read:

20         17.66 18.24  Securities in book-entry form.--Any

21  security that which:

22         (1)(a)  Is eligible to be held in book-entry form on

23  the books of the Federal Reserve Book-Entry System; or

24         (b)  Is eligible for deposit in a depository trust

25  clearing system established to hold and transfer securities by

26  computerized book-entry systems; and which

27         (2)(a)  Is held in the name of the Chief Financial

28  Officer, in the name of the State Treasurer, or in the name of

29  the State Insurance Commissioner; or

30         (b)  Is pledged to the Chief Financial Officer, to the

31  State Treasurer, or to the State Insurance Commissioner;

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 1  

 2  under any state law for any purpose whatsoever, may be held in

 3  book-entry form on the books of the Federal Reserve Book-Entry

 4  System or on deposit in a depository trust clearing system.

 5         Section 67.  Subsection (3) of section 20.04, Florida

 6  Statutes, is amended to read:

 7         20.04  Structure of executive branch.--The executive

 8  branch of state government is structured as follows:

 9         (3)  For their internal structure, all departments,

10  except for the Department of Financial Services Banking and

11  Finance, the Department of Children and Family Services, the

12  Department of Corrections, the Department of Management

13  Services, the Department of Revenue, and the Department of

14  Transportation, must adhere to the following standard terms:

15         (a)  The principal unit of the department is the

16  "division." Each division is headed by a "director."

17         (b)  The principal unit of the division is the

18  "bureau." Each bureau is headed by a "chief."

19         (c)  The principal unit of the bureau is the "section."

20  Each section is headed by an "administrator."

21         (d)  If further subdivision is necessary, sections may

22  be divided into "subsections," which are headed by

23  "supervisors."

24         Section 68.  Paragraph (h) of subsection (5) of section

25  20.055, Florida Statutes, is amended to read:

26         20.055  Agency inspectors general.--

27         (5)  In carrying out the auditing duties and

28  responsibilities of this act, each inspector general shall

29  review and evaluate internal controls necessary to ensure the

30  fiscal accountability of the state agency. The inspector

31  general shall conduct financial, compliance, electronic data

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 1  processing, and performance audits of the agency and prepare

 2  audit reports of his or her findings. The scope and assignment

 3  of the audits shall be determined by the inspector general;

 4  however, the agency head may at any time direct the inspector

 5  general to perform an audit of a special program, function, or

 6  organizational unit. The performance of the audit shall be

 7  under the direction of the inspector general, except that if

 8  the inspector general does not possess the qualifications

 9  specified in subsection (4), the director of auditing shall

10  perform the functions listed in this subsection.

11         (h)  The inspector general shall develop long-term and

12  annual audit plans based on the findings of periodic risk

13  assessments. The plan, where appropriate, should include

14  postaudit samplings of payments and accounts. The plan shall

15  show the individual audits to be conducted during each year

16  and related resources to be devoted to the respective audits.

17  The Chief Financial Officer Comptroller, to assist in

18  fulfilling the responsibilities for examining, auditing, and

19  settling accounts, claims, and demands pursuant to s.

20  17.03(1), and examining, auditing, adjusting, and settling

21  accounts pursuant to s. 17.04, may utilize audits performed by

22  the inspectors general and internal auditors. For state

23  agencies under the Governor, the audit plans shall be

24  submitted to the Governor's Chief Inspector General. The plan

25  shall be submitted to the agency head for approval. A copy of

26  the approved plan shall be submitted to the Auditor General.

27         Section 69.  Section 20.121, Florida Statutes, is

28  amended to read:

29         20.121  Department of Financial Services.--There is

30  created a Department of Financial Services.

31  

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 1         (1)  DEPARTMENT HEAD.--The head of the Department of

 2  Financial Services is the Chief Financial Officer.

 3         (2)  DIVISIONS.--The Department of Financial Services

 4  shall consist of the following divisions:

 5         (a)  The Division of Accounting and Auditing, which

 6  shall include the following bureau and office:

 7         1.  The Bureau of Unclaimed Property.

 8         2.  The Office of Fiscal Integrity which shall function

 9  as a criminal justice agency for purposes of ss.

10  943.045-943.08 and shall have a separate budget. The office

11  may conduct investigations within or outside this state as the

12  bureau deems necessary to aid in the enforcement of this

13  section.  If during an investigation the office has reason to

14  believe that any criminal law of this state has or may have

15  been violated, the office shall refer any records tending to

16  show such violation to state or federal law enforcement or

17  prosecutorial agencies and shall provide investigative

18  assistance to those agencies as required.

19         (b)  The Division of State Fire Marshal.

20         (c)  The Division of Risk Management.

21         (d)  The Division of Treasury, which shall include a

22  Bureau of Deferred Compensation responsible for administering

23  the Government Employees Deferred Compensation Plan

24  established under s. 112.215 for state employees.

25         (e)  The Division of Insurance Fraud.

26         (f)  The Division of Rehabilitation and Liquidation.

27         (g)  The Division of Insurance Agents and Agency

28  Services.

29         (h)  The Division of Consumer Services, which shall

30  include a Bureau of Funeral and Cemetery Services.

31  

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 1         1.  The Division of Consumer Services shall perform the

 2  following functions concerning products or services regulated

 3  by the Department of Financial Services or by either office of

 4  the Financial Services Commission:

 5         a.  Receive inquiries and complaints from consumers;

 6         b.  Prepare and disseminate such information as the

 7  department deems appropriate to inform or assist consumers;

 8         c.  Provide direct assistance and advocacy for

 9  consumers who request such assistance or advocacy;

10         d.  With respect to apparent or potential violations of

11  law or applicable rules by a person or entity licensed by the

12  department or by either office of the commission, report such

13  apparent or potential violation to the appropriate division of

14  the department or office of the commission, which may take

15  such further action as it deems appropriate.

16         2.  Any person licensed or issued a certificate of

17  authority by the department or by either office of the

18  commission shall respond, in writing, to the Division of

19  Consumer Services within 15 days after receipt of a written

20  request from the division to do so concerning a consumer

21  complaint. Failure to timely respond is subject to an

22  administrative fine by the department or office that issued

23  the license or certificate of authority, as may be imposed for

24  a violation of law.

25         (i)  The Division of Workers' Compensation.

26         (j)  The Division of Administration.

27         (k)  The Division of Legal Services.

28         (l)  The Division of Information Systems.

29         (m)  The Office of Insurance Consumer Advocate.

30         (3)  FINANCIAL SERVICES COMMISSION.--Effective January

31  7, 2003, there is created within the Department of Financial

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 1  Services the Financial Services Commission, composed of the

 2  Governor, the Attorney General, the Chief Financial Officer,

 3  and the Commissioner of Agriculture, which shall for purposes

 4  of this section be referred to as the commission.  Commission

 5  members shall serve as agency head of the Financial Services

 6  Commission.  The commission shall be a separate budget entity

 7  and shall be exempt from the provisions of s. 20.052.

 8  Commission action shall be by majority vote consisting of at

 9  least three affirmative votes.  The commission shall not be

10  subject to control, supervision, or direction by the

11  Department of Financial Services in any manner, including

12  purchasing, transactions involving real or personal property,

13  personnel, or budgetary matters.

14         (a)  Structure.--The major structural unit of the

15  commission is the office. Each office shall be headed by a

16  director. The following offices are established:

17         1.  The Office of Insurance Regulation, which shall be

18  responsible for all activities concerning insurers and other

19  risk bearing entities, including licensing, rates, policy

20  forms, market conduct, claims, adjusters, issuance of

21  certificates of authority, solvency, viatical settlements,

22  premium financing, and administrative supervision, as provided

23  under the insurance code or chapter 636. The head of the

24  Office of Insurance Regulation is the Director of the Office

25  of Insurance Regulation.

26         2.  The Office of Financial Institutions and Securities

27  Regulation, which shall be responsible for all activities of

28  the Financial Services Commission relating to the regulation

29  of banks, credit unions, other financial institutions, finance

30  companies, and the securities industry.  The head of the

31  office is the Director of the Office of Financial Institutions

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 1  and Securities Regulation. The Office of Financial

 2  Institutions and Securities Regulation shall include a Bureau

 3  of Financial Investigations, which shall function as a

 4  criminal justice agency for purposes of ss. 943.045-943.08 and

 5  shall have a separate budget.  The bureau may conduct

 6  investigations within or outside this state as the bureau

 7  deems necessary to aid in the enforcement of this section. If,

 8  during an investigation, the office has reason to believe that

 9  any criminal law of this state has or may have been violated,

10  the office shall refer any records tending to show such

11  violation to state or federal law enforcement or prosecutorial

12  agencies and shall provide investigative assistance to those

13  agencies as required.

14         (b)  Organization.--The commission shall establish by

15  rule any additional organizational structure of the offices.

16  It is the intent of the Legislature to provide the commission

17  with the flexibility to organize the offices in any manner

18  they determine appropriate to promote both efficiency and

19  accountability.

20         (c)  Powers.--Commission members shall serve as the

21  agency head for purposes of rulemaking under ss.

22  120.536-120.565 by the commission and all subunits of the

23  commission.  Each director is agency head for purposes of

24  final agency action under chapter 120 for all areas within the

25  regulatory authority delegated to the director's office.

26         (d)  Appointment and qualifications of directors.--The

27  commission shall appoint or remove each director by a majority

28  vote consisting of at least three affirmative votes, with both

29  the Governor and the Chief Financial Officer on the prevailing

30  side. The minimum qualifications of the directors are as

31  follows:

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 1         1.  Prior to appointment as director, the Director of

 2  the Office of Insurance Regulation must have had, within the

 3  previous 10 years, at least 5 years of responsible private

 4  sector experience working full time in areas within the scope

 5  of the subject matter jurisdiction of the Office of Insurance

 6  Regulation or at least 5 years of experience as a senior

 7  examiner or other senior employee of a state or federal agency

 8  having regulatory responsibility over insurers or insurance

 9  agencies.

10         2.  Prior to appointment as director, the Director of

11  the Office of Financial Institutions and Securities Regulation

12  must have had, within the previous 10 years, at least 5 years

13  of responsible private sector experience working full time in

14  areas within the subject matter jurisdiction of the Office of

15  Financial Institutions and Securities Regulation or at least 5

16  years of experience as a senior examiner or other senior

17  employee of a state or federal agency having regulatory

18  responsibility over financial institutions, finance companies,

19  or securities companies.

20         (e)  Administrative support.--The offices shall have a

21  sufficient number of attorneys, examiners, investigators,

22  other professional personnel to carry out their

23  responsibilities and administrative personnel as determined

24  annually in the appropriations process.  The Department of

25  Financial Services shall provide administrative and

26  information systems support to the offices.

27         Section 70.  Section 20.195, Florida Statutes, is

28  amended to read:

29         20.195  Department of Children and Family Services

30  Tobacco Settlement Trust Fund.--

31  

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 1         (1)  The Department of Children and Family Services

 2  Tobacco Settlement Trust Fund is created within that

 3  department. Funds to be credited to the trust fund shall

 4  consist of funds disbursed, by nonoperating transfer, from the

 5  Department of Financial Services Banking and Finance Tobacco

 6  Settlement Clearing Trust Fund in amounts equal to the annual

 7  appropriations made from this trust fund.

 8         (2)  Notwithstanding the provisions of s. 216.301 and

 9  pursuant to s. 216.351, any unencumbered balance in the trust

10  fund at the end of any fiscal year and any encumbered balance

11  remaining undisbursed on December 31 of the same calendar year

12  shall revert to the Department of Financial Services Banking

13  and Finance Tobacco Settlement Clearing Trust Fund.

14         Section 71.  Section 20.425, Florida Statutes, is

15  amended to read:

16         20.425  Agency for Health Care Administration Tobacco

17  Settlement Trust Fund.--

18         (1)  The Agency for Health Care Administration Tobacco

19  Settlement Trust Fund is created within the agency. Funds to

20  be credited to the trust fund shall consist of funds

21  disbursed, by nonoperating transfer, from the Department of

22  Financial Services Banking and Finance Tobacco Settlement

23  Clearing Trust Fund in amounts equal to the annual

24  appropriations made from this trust fund.

25         (2)  Notwithstanding the provisions of s. 216.301 and

26  pursuant to s. 216.351, any unencumbered balance in the trust

27  fund at the end of any fiscal year and any encumbered balance

28  remaining undisbursed on December 31 of the same calendar year

29  shall revert to the Department of Financial Services Banking

30  and Finance Tobacco Settlement Clearing Trust Fund.

31  

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 1         Section 72.  Paragraph (g) of subsection (1) of section

 2  20.435, Florida Statutes, is amended to read:

 3         20.435  Department of Health; trust funds.--

 4         (1)  The following trust funds are hereby created, to

 5  be administered by the Department of Health:

 6         (g)  Department of Health Tobacco Settlement Trust

 7  Fund.

 8         1.  Funds to be credited to the trust fund shall

 9  consist of funds disbursed, by nonoperating transfer, from the

10  Department of Financial Services Banking and Finance Tobacco

11  Settlement Clearing Trust Fund in amounts equal to the annual

12  appropriations made from this trust fund.

13         2.  Notwithstanding the provisions of s. 216.301 and

14  pursuant to s. 216.351, any unencumbered balance in the trust

15  fund at the end of any fiscal year and any encumbered balance

16  remaining undisbursed on December 31 of the same calendar year

17  shall revert to the Department of Financial Services Banking

18  and Finance Tobacco Settlement Clearing Trust Fund.

19         Section 73.  Subsection (4) of section 24.105, Florida

20  Statutes, is amended to read:

21         24.105  Powers and duties of department.--The

22  department shall:

23         (4)  Submit monthly and annual reports to the Governor,

24  the Chief Financial Officer Treasurer, the President of the

25  Senate, and the Speaker of the House of Representatives

26  disclosing the total lottery revenues, prize disbursements,

27  and other expenses of the department during the preceding

28  month.  The annual report shall additionally describe the

29  organizational structure of the department, including its

30  hierarchical structure, and shall identify the divisions and

31  

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 1  bureaus created by the secretary and summarize the

 2  departmental functions performed by each.

 3         Section 74.  Subsection (5) of section 24.111, Florida

 4  Statutes, is amended to read:

 5         24.111  Vendors; disclosure and contract

 6  requirements.--

 7         (5)  Each vendor in a major procurement in excess of

 8  $25,000, and any other vendor if the department deems it

 9  necessary to protect the state's financial interest, shall, at

10  the time of executing the contract with the department, post

11  an appropriate bond with the department in an amount

12  determined by the department to be adequate to protect the

13  state's interests, but not higher than the full amount

14  estimated to be paid annually to the vendor under the

15  contract.  In lieu of the bond, a vendor may, to assure the

16  faithful performance of its obligations, file with the

17  department an irrevocable letter of credit acceptable to the

18  department in an amount determined by the department to be

19  adequate to protect the state's interests or deposit and

20  maintain with the Chief Financial Officer Treasurer securities

21  that are interest bearing or accruing and that, with the

22  exception of those specified in paragraphs (a) and (b), are

23  rated in one of the four highest classifications by an

24  established nationally recognized investment rating service.

25  Securities eligible under this subsection shall be limited to:

26         (a)  Certificates of deposit issued by solvent banks or

27  savings associations organized and existing under the laws of

28  this state or under the laws of the United States and having

29  their principal place of business in this state.

30  

31  

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 1         (b)  United States bonds, notes, and bills for which

 2  the full faith and credit of the government of the United

 3  States is pledged for the payment of principal and interest.

 4         (c)  General obligation bonds and notes of any

 5  political subdivision of the state.

 6         (d)  Corporate bonds of any corporation that is not an

 7  affiliate or subsidiary of the depositor.

 8  

 9  Such securities shall be held in trust and shall have at all

10  times a market value at least equal to an amount determined by

11  the department to be adequate to protect the state's

12  interests, which amount shall not be set higher than the full

13  amount estimated to be paid annually to the vendor under

14  contract.

15         Section 75.  Paragraph (b) of subsection (9) of section

16  24.112, Florida Statutes, is amended to read:

17         24.112  Retailers of lottery tickets.--

18         (9)

19         (b)  In lieu of such bond, the department may purchase

20  blanket bonds covering all or selected retailers or may allow

21  a retailer to deposit and maintain with the Chief Financial

22  Officer Treasurer securities that are interest bearing or

23  accruing and that, with the exception of those specified in

24  subparagraphs 1. and 2., are rated in one of the four highest

25  classifications by an established nationally recognized

26  investment rating service.  Securities eligible under this

27  paragraph shall be limited to:

28         1.  Certificates of deposit issued by solvent banks or

29  savings associations organized and existing under the laws of

30  this state or under the laws of the United States and having

31  their principal place of business in this state.

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 1         2.  United States bonds, notes, and bills for which the

 2  full faith and credit of the government of the United States

 3  is pledged for the payment of principal and interest.

 4         3.  General obligation bonds and notes of any political

 5  subdivision of the state.

 6         4.  Corporate bonds of any corporation that is not an

 7  affiliate or subsidiary of the depositor.

 8  

 9  Such securities shall be held in trust and shall have at all

10  times a market value at least equal to an amount required by

11  the department.

12         Section 76.  Subsections (3) and (4) of section 24.120,

13  Florida Statutes, are amended to read:

14         24.120  Financial matters; Administrative Trust Fund;

15  interagency cooperation.--

16         (3)  Any action required by law to be taken by the

17  Chief Financial Officer State Treasurer or the Comptroller

18  shall be taken within 2 business days after the department's

19  request therefor.  If the request for such action is not

20  approved or rejected within such period, the request shall be

21  deemed to be approved. The department shall reimburse the

22  Chief Financial Officer State Treasurer or the Comptroller for

23  any additional costs involved in providing the level of

24  service required by this subsection.

25         (4)  The department shall cooperate with the Chief

26  Financial Officer State Treasurer, the Comptroller, the

27  Auditor General, and the Office of Program Policy Analysis and

28  Government Accountability by giving employees designated by

29  any of them access to facilities of the department for the

30  purpose of efficient compliance with their respective

31  responsibilities.

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 1         Section 77.  Subsection (5) of section 25.241, Florida

 2  Statutes, is amended to read:

 3         25.241  Clerk of Supreme Court; compensation;

 4  assistants; filing fees, etc.--

 5         (5)  The Clerk of the Supreme Court is hereby required

 6  to prepare a statement of all fees collected in duplicate each

 7  month and remit one copy of such said statement, together with

 8  all fees collected by him or her, to the Chief Financial

 9  Officer State Treasurer, who shall place the same to the

10  credit of the General Revenue Fund.

11         Section 78.  Section 26.39, Florida Statutes, is

12  amended to read:

13         26.39  Penalty for nonattendance of judge.--Whenever

14  such default shall occur, the clerk of the court (unless such

15  judge shall file his or her reasons for such default as

16  hereinbefore provided) shall certify the fact, under his or

17  her official signature and seal, to the Chief Financial

18  Officer Comptroller of the state, who shall deduct from the

19  warrants on the Treasurer, thereafter to be issued in favor of

20  the judge making such default, the sum of $100 as aforesaid

21  for every such default.

22         Section 79.  Section 27.08, Florida Statutes, is

23  amended to read:

24         27.08  State claims; surrender of papers to

25  successor.--Upon the qualification of the successor of any

26  state attorney, the state attorney going out of office shall

27  deliver to his or her successor a statement of all cases for

28  the collection of money in favor of the state under his or her

29  control and the papers connected with the same, and take his

30  or her receipt for the same, which receipt, when filed with

31  the Department of Financial Services Banking and Finance,

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 1  shall release such state attorney from any further liability

 2  to the state upon the claims receipted for; and the state

 3  attorney receiving the claims shall be liable in all respects

 4  for the same, as provided against state attorneys in s. 17.20.

 5         Section 80.  Section 27.10, Florida Statutes, is

 6  amended to read:

 7         27.10  Obligation as to claims; how discharged.--The

 8  charges mentioned in s. 17.20 shall be evidence of

 9  indebtedness on the part of any state attorney against whom

10  any charge is made for the full amount of such claim to the

11  state until the same shall be collected and paid into the

12  treasury or sued to insolvency, which fact of insolvency shall

13  be certified by the circuit judge of his or her circuit,

14  unless the said state attorney makes shall make it fully

15  appear to the Department of Financial Services Banking and

16  Finance that the failure to collect the same did not result

17  from his or her neglect.

18         Section 81.  Section 27.11, Florida Statutes, is

19  amended to read:

20         27.11  Report upon claims committed to state

21  attorney.--The state attorney shall make a report to the Chief

22  Financial Officer Comptroller on the first Monday in January

23  and July in each and every year of the condition of all claims

24  placed in his or her hands or which the state attorney may

25  have been required to prosecute and collect, whether the same

26  is in suit or in judgment, or collected, and the probable

27  solvency or insolvency of claims not collected, and shall at

28  the same time pay over all moneys which he or she may have

29  collected belonging to the state; and the Chief Financial

30  Officer Comptroller shall not audit or allow any claim which

31  

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 1  any state attorney may have against the state for services

 2  until he or she makes the report herein required.

 3         Section 82.  Subsection (1) of section 27.12, Florida

 4  Statutes, is amended to read:

 5         27.12  Power to compromise.--

 6         (1)  The state attorney may, with the approval of the

 7  Department of Financial Services Banking and Finance,

 8  compromise and settle all judgments, claims, and demands in

 9  favor of the state in his or her circuit against defaulting

10  collectors of revenue, sheriffs and other officers, and the

11  sureties on their bonds, on such terms as the state attorney

12  may deem equitable and proper.

13         Section 83.  Section 27.13, Florida Statutes, is

14  amended to read:

15         27.13  Completion of compromise.--The state attorney

16  shall, on agreeing to any compromise or settlement, report the

17  same to the Department of Financial Services Banking and

18  Finance for its approval; and, on its approving such

19  compromise or settlement, the said state attorney, on a

20  compliance with the terms of such compromise or settlement

21  shall give a receipt to the collector of revenue, sheriff or

22  other officer, or the sureties on their bonds, or to the legal

23  representatives, which receipt shall be a discharge from all

24  judgments, claims or demands of the state against such

25  collector of revenue or other officer, or the sureties on

26  their bonds.

27         Section 84.  Subsection (4) of section 27.34, Florida

28  Statutes, is amended to read:

29         27.34  Salaries and other related costs of state

30  attorneys' offices; limitations.--

31  

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 1         (4)  Notwithstanding s. 27.25, the Chief Financial

 2  Officer Insurance Commissioner may contract with the state

 3  attorney of any judicial circuit of the state for the

 4  prosecution of criminal violations of the Workers'

 5  Compensation Law and related crimes and may contribute funds

 6  for such purposes. Such contracts may provide for the

 7  training, salary, and expenses of one or more assistant state

 8  attorneys used in the prosecution of such crimes.

 9         Section 85.  Section 27.3455, Florida Statutes, is

10  amended to read:

11         27.3455  Annual statement of certain revenues and

12  expenditures.--

13         (1)  Each county shall submit annually to the Chief

14  Financial Officer Comptroller a statement of revenues and

15  expenditures as set forth in this section in the form and

16  manner prescribed by the Chief Financial Officer Comptroller

17  in consultation with the Legislative Committee on

18  Intergovernmental Relations, provided that such statement

19  identify total county expenditures on:

20         (a)  Medical examiner services.

21         (b)  County victim witness programs.

22         (c)  Each of the services outlined in ss. 27.34(2) and

23  27.54(3).

24         (d)  Appellate filing fees in criminal cases in which

25  an indigent defendant appeals a judgment of a county or

26  circuit court to a district court of appeal or the Florida

27  Supreme Court.

28         (e)  Other court-related costs of the state attorney

29  and public defender that were paid by the county where such

30  costs were included in a judgment or order rendered by the

31  trial court against the county.

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 1  

 2  Such statement also shall identify the revenues provided by s.

 3  938.05(1) that were used to meet or reimburse the county for

 4  such expenditures.

 5         (2)(a)  Within 6 months of the close of the local

 6  government fiscal year, each county shall submit to the Chief

 7  Financial Officer Comptroller a statement of compliance from

 8  its independent certified public accountant, engaged pursuant

 9  to s. 218.39, that the certified statement of expenditures was

10  in accordance with ss. 27.34(2), 27.54(3), and this section.

11  All discrepancies noted by the independent certified public

12  accountant shall be included in the statement furnished by the

13  county to the Chief Financial Officer Comptroller.

14         (b)  If Should the Chief Financial Officer determines

15  Comptroller determine that additional auditing procedures are

16  appropriate because:

17         1.  The county failed to submit timely its annual

18  statement;

19         2.  Discrepancies were noted by the independent

20  certified public accountant; or

21         3.  The county failed to file before March 31 of each

22  year the certified public accountant statement of compliance,

23  the Chief Financial Officer may Comptroller is hereby

24  authorized to send his or her personnel or to contract for

25  services to bring the county into compliance.  The costs

26  incurred by the Chief Financial Officer Comptroller shall be

27  paid promptly by the county upon certification by the Chief

28  Financial Officer Comptroller.

29         (c)  Where the Chief Financial Officer Comptroller

30  elects to utilize the services of an independent contractor,

31  such certification by the Chief Financial Officer Comptroller

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 1  may require the county to make direct payment to a contractor.

 2  Any funds owed by a county in such matters shall be recovered

 3  pursuant to s. 17.04 or s. 17.041.

 4         (3)  The priority for the allocation of funds collected

 5  pursuant to s. 938.05(1) shall be as follows:

 6         (a)  Reimbursement to the county for actual county

 7  expenditures incurred in providing the state attorney and

 8  public defender the services outlined in ss. 27.34(2) and

 9  27.54(3), with the exception of office space, utilities, and

10  custodial services.

11         (b)  At the close of the local government fiscal year,

12  funds remaining on deposit in the special trust fund of the

13  county after reimbursements have been made pursuant to

14  paragraph (a) shall be reimbursed to the county for actual

15  county expenditures made in support of the operations and

16  services of medical examiners, including the costs associated

17  with the investigation of state prison inmate deaths. Special

18  county trust fund revenues used to reimburse the county for

19  medical examiner expenditures in any year shall not exceed $1

20  per county resident.

21         (c)  At the close of the local government fiscal year,

22  counties establishing or having in existence a comprehensive

23  victim-witness program which meets the standards set by the

24  Crime Victims' Services Office shall be eligible to receive 50

25  percent matching moneys from the balance remaining in the

26  special trust fund after reimbursements have been made

27  pursuant to paragraphs (a) and (b).  Special trust fund moneys

28  used in any year to supplement such programs shall not exceed

29  25 cents per county resident.

30         (d)  At the close of the local government fiscal year,

31  funds remaining in the special trust fund after reimbursements

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 1  have been made pursuant to paragraphs (a), (b), and (c) shall

 2  be used to reimburse the county for county costs incurred in

 3  the provision of office space, utilities, and custodial

 4  services to the state attorney and public defender, for county

 5  expenditures on appellate filing fees in criminal cases in

 6  which an indigent defendant appeals a judgment of a county or

 7  circuit court to a district court of appeal or the Florida

 8  Supreme Court, and for county expenditures on court-related

 9  costs of the state attorney and public defender that were paid

10  by the county, provided that such court-related costs were

11  included in a judgment or order rendered by the trial court

12  against the county.  Where a state attorney or a public

13  defender is provided space in a county-owned facility,

14  responsibility for calculating county costs associated with

15  the provision of such office space, utilities, and custodial

16  services is hereby vested in the Chief Financial Officer

17  Comptroller in consultation with the Legislative Committee on

18  Intergovernmental Relations.

19         (4)  At the end of the local government fiscal year,

20  all funds remaining on deposit in the special trust fund after

21  all reimbursements have been made as provided for in

22  subsection (3) shall be forwarded to the Chief Financial

23  Officer Treasurer for deposit in the General Revenue Fund of

24  the state.

25         (5)  The Chief Financial Officer Comptroller shall

26  adopt any rules necessary to implement his or her

27  responsibilities pursuant to this section.

28         Section 86.  Subsection (2) of section 27.703, Florida

29  Statutes, is amended to read:

30         27.703  Conflict of interest and substitute counsel.--

31  

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 1         (2)  Appointed counsel shall be paid from funds

 2  appropriated to the Chief Financial Officer Comptroller. The

 3  hourly rate may not exceed $100. However, effective July 1,

 4  1999, all appointments of private counsel under this section

 5  shall be in accordance with ss. 27.710 and 27.711.

 6         Section 87.  Subsection (4) of section 27.710, Florida

 7  Statutes, is amended to read:

 8         27.710  Registry of attorneys applying to represent

 9  persons in postconviction capital collateral proceedings;

10  certification of minimum requirements; appointment by trial

11  court.--

12         (4)  Each private attorney who is appointed by the

13  court to represent a capital defendant must enter into a

14  contract with the Chief Financial Officer Comptroller. If the

15  appointed attorney fails to execute the contract within 30

16  days after the date the contract is mailed to the attorney,

17  the executive director of the Commission on Capital Cases

18  shall notify the trial court. The Chief Financial Officer

19  Comptroller shall develop the form of the contract, function

20  as contract manager, and enforce performance of the terms and

21  conditions of the contract. By signing such contract, the

22  attorney certifies that he or she intends to continue the

23  representation under the terms and conditions set forth in the

24  contract until the sentence is reversed, reduced, or carried

25  out or until released by order of the trial court.

26         Section 88.  Subsections (3), (4), (5), (6), (7), (12),

27  and (13) of section 27.711, Florida Statutes, are amended to

28  read:

29         27.711  Terms and conditions of appointment of

30  attorneys as counsel in postconviction capital collateral

31  proceedings.--

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 1         (3)  An attorney appointed to represent a capital

 2  defendant is entitled to payment of the fees set forth in this

 3  section only upon full performance by the attorney of the

 4  duties specified in this section and approval of payment by

 5  the trial court, and the submission of a payment request by

 6  the attorney, subject to the availability of sufficient

 7  funding specifically appropriated for this purpose.  The Chief

 8  Financial Officer Comptroller shall notify the executive

 9  director and the court if it appears that sufficient funding

10  has not been specifically appropriated for this purpose to pay

11  any fees which may be incurred. The attorney shall maintain

12  appropriate documentation, including a current and detailed

13  hourly accounting of time spent representing the capital

14  defendant. The fee and payment schedule in this section is the

15  exclusive means of compensating a court-appointed attorney who

16  represents a capital defendant. When appropriate, a

17  court-appointed attorney must seek further compensation from

18  the Federal Government, as provided in 18 U.S.C. s. 3006A or

19  other federal law, in habeas corpus litigation in the federal

20  courts.

21         (4)  Upon approval by the trial court, an attorney

22  appointed to represent a capital defendant under s. 27.710 is

23  entitled to payment of the following fees by the Chief

24  Financial Officer Comptroller:

25         (a)  Regardless of the stage of postconviction capital

26  collateral proceedings, the attorney is entitled to $100 per

27  hour, up to a maximum of $2,500, after accepting appointment

28  and filing a notice of appearance.

29         (b)  The attorney is entitled to $100 per hour, up to a

30  maximum of $20,000, after timely filing in the trial court the

31  capital defendant's complete original motion for

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 1  postconviction relief under the Florida Rules of Criminal

 2  Procedure. The motion must raise all issues to be addressed by

 3  the trial court. However, an attorney is entitled to fees

 4  under this paragraph if the court schedules a hearing on a

 5  matter that makes the filing of the original motion for

 6  postconviction relief unnecessary or if the court otherwise

 7  disposes of the case.

 8         (c)  The attorney is entitled to $100 per hour, up to a

 9  maximum of $20,000, after the trial court issues a final order

10  granting or denying the capital defendant's motion for

11  postconviction relief.

12         (d)  The attorney is entitled to $100 per hour, up to a

13  maximum of $20,000, after timely filing in the Supreme Court

14  the capital defendant's brief or briefs that address the trial

15  court's final order granting or denying the capital

16  defendant's motion for postconviction relief and the state

17  petition for writ of habeas corpus.

18         (e)  The attorney is entitled to $100 per hour, up to a

19  maximum of $10,000, after the trial court issues an order,

20  pursuant to a remand from the Supreme Court, which directs the

21  trial court to hold further proceedings on the capital

22  defendant's motion for postconviction relief.

23         (f)  The attorney is entitled to $100 per hour, up to a

24  maximum of $4,000, after the appeal of the trial court's

25  denial of the capital defendant's motion for postconviction

26  relief and the capital defendant's state petition for writ of

27  habeas corpus become final in the Supreme Court.

28         (g)  At the conclusion of the capital defendant's

29  postconviction capital collateral proceedings in state court,

30  the attorney is entitled to $100 per hour, up to a maximum of

31  

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 1  $2,500, after filing a petition for writ of certiorari in the

 2  Supreme Court of the United States.

 3         (h)  If, at any time, a death warrant is issued, the

 4  attorney is entitled to $100 per hour, up to a maximum of

 5  $5,000. This payment shall be full compensation for attorney's

 6  fees and costs for representing the capital defendant

 7  throughout the proceedings before the state courts of Florida.

 8  

 9  The hours billed by a contracting attorney under this

10  subsection may include time devoted to representation of the

11  defendant by another attorney who is qualified under s. 27.710

12  and who has been designated by the contracting attorney to

13  assist him or her.

14         (5)  An attorney who represents a capital defendant may

15  use the services of one or more investigators to assist in

16  representing a capital defendant. Upon approval by the trial

17  court, the attorney is entitled to payment from the Chief

18  Financial Officer Comptroller of $40 per hour, up to a maximum

19  of $15,000, for the purpose of paying for investigative

20  services.

21         (6)  An attorney who represents a capital defendant is

22  entitled to a maximum of $15,000 for miscellaneous expenses,

23  such as the costs of preparing transcripts, compensating

24  expert witnesses, and copying documents. Upon approval by the

25  trial court, the attorney is entitled to payment by the Chief

26  Financial Officer Comptroller of up to $15,000 for

27  miscellaneous expenses, except that, if the trial court finds

28  that extraordinary circumstances exist, the attorney is

29  entitled to payment in excess of $15,000.

30         (7)  An attorney who is actively representing a capital

31  defendant is entitled to a maximum of $500 per fiscal year for

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 1  tuition and expenses for continuing legal education that

 2  pertains to the representation of capital defendants. Upon

 3  approval by the trial court, the attorney is entitled to

 4  payment by the Chief Financial Officer Comptroller for

 5  expenses for such tuition and continuing legal education.

 6         (12)  The court shall monitor the performance of

 7  assigned counsel to ensure that the capital defendant is

 8  receiving quality representation. The court shall also receive

 9  and evaluate allegations that are made regarding the

10  performance of assigned counsel. The Chief Financial Officer

11  Comptroller, the Department of Legal Affairs, the executive

12  director, or any interested person may advise the court of any

13  circumstance that could affect the quality of representation,

14  including, but not limited to, false or fraudulent billing,

15  misconduct, failure to meet continuing legal education

16  requirements, solicitation to receive compensation from the

17  capital defendant, or failure to file appropriate motions in a

18  timely manner.

19         (13)  Prior to the filing of a motion for order

20  approving payment of attorney's fees, costs, or related

21  expenses, the assigned counsel shall deliver a copy of his

22  intended billing, together with supporting affidavits and all

23  other necessary documentation, to the Chief Financial

24  Officer's Comptroller's named contract manager. The contract

25  manager shall have 10 business days from receipt to review the

26  billings, affidavit, and documentation for completeness and

27  compliance with contractual and statutory requirements. If the

28  contract manager objects to any portion of the proposed

29  billing, the objection and reasons therefor shall be

30  communicated to the assigned counsel. The assigned counsel may

31  thereafter file his or her motion for order approving payment

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 1  of attorney's fees, costs, or related expenses together with

 2  supporting affidavits and all other necessary documentation.

 3  The motion must specify whether the Chief Financial Officer's

 4  Comptroller's contract manager objects to any portion of the

 5  billing or the sufficiency of documentation and, if so, the

 6  reason therefor. A copy of the motion and attachments shall be

 7  served on the Chief Financial Officer's Comptroller's contract

 8  manager, who shall have standing to file pleadings and appear

 9  before the court to contest any motion for order approving

10  payment. The fact that the Chief Financial Officer's

11  Comptroller's contract manager has not objected to any portion

12  of the billing or to the sufficiency of the documentation is

13  not binding on the court, which retains primary authority and

14  responsibility for determining the reasonableness of all

15  billings for fees, costs, and related expenses, subject to

16  statutory limitations.

17         Section 89.  Section 28.235, Florida Statutes, is

18  amended to read:

19         28.235  Advance payments by clerk of circuit

20  court.--The clerk of the circuit court is authorized to make

21  advance payments on behalf of the county for goods and

22  services, including, but not limited to, maintenance

23  agreements and subscriptions, pursuant to rules or procedures

24  adopted by the Chief Financial Officer Comptroller for advance

25  payments of invoices submitted to agencies of the state.

26         Section 90.  Subsections (7) and (23) of section 28.24,

27  Florida Statutes, are amended to read:

28         28.24  Service charges by clerk of the circuit

29  court.--The clerk of the circuit court shall make the

30  following charges for services rendered by the clerk's office

31  in recording documents and instruments and in performing the

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 1  duties enumerated. However, in those counties where the

 2  clerk's office operates as a fiscal unit of the county

 3  pursuant to s. 145.022(1), the clerk shall not charge the

 4  county for such services.

 5  

 6                                                         Charges

 7  

 8         (7)  For making and reporting payrolls of jurors to

 9  Chief Financial Officer State Comptroller, per page, per copy

10  ..........................................................5.00

11         (23)  For paying of witnesses and making and reporting

12  payroll to Chief Financial Officer State Comptroller, per

13  copy, per page............................................5.00

14         Section 91.  Paragraph (b) of subsection (2) of section

15  30.49, Florida Statutes, is amended to read:

16         30.49  Budgets.--

17         (2)

18         (b)  Within the appropriate fund and functional

19  category, expenditures shall be itemized in accordance with

20  the uniform chart of accounts prescribed by the Department of

21  Financial Services Banking and Finance, as follows:

22         1.  Personal services.

23         2.  Operating expenses.

24         3.  Capital outlay.

25         4.  Debt service.

26         5.  Nonoperating disbursements and contingency

27  reserves.

28         Section 92.  Section 30.52, Florida Statutes, is

29  amended to read:

30         30.52  Handling of public funds.--The sheriff shall

31  keep public funds in his or her custody, either in his or her

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 1  office in an amount not in excess of the burglary, theft, and

 2  robbery insurance provided, the cost of which is hereby

 3  authorized as an expense of the office, or in a depository in

 4  an amount not in excess of the security provided pursuant to

 5  s. 658.60 and the regulations of the Department of Financial

 6  Services Banking and Finance.  The title of the depository

 7  accounts shall include the word "sheriff" and the name of the

 8  county, and withdrawals from the accounts shall be made by

 9  checks signed by the duly qualified and acting sheriff of the

10  county, or his or her designated deputy or agent.

11         Section 93.  Section 40.30, Florida Statutes, is

12  amended to read:

13         40.30  Requisition endorsed by State Courts

14  Administrator or designee.--Upon receipt of such estimate and

15  the requisition from the clerk of the court, the State Courts

16  Administrator or designee shall endorse the amount that he or

17  she may deem necessary for the pay of jurors and witnesses

18  during the quarterly fiscal period and shall submit a request

19  for payment to the Chief Financial Officer Comptroller.

20         Section 94.  Section 40.31, Florida Statutes, is

21  amended to read:

22         40.31  State Courts Administrator may apportion

23  appropriation.--If the State Courts Administrator shall have

24  reason to believe that the amount appropriated by the

25  Legislature is insufficient to meet the expenses of jurors and

26  witnesses during the remaining part of the state fiscal year,

27  he or she may apportion the money in the treasury for that

28  purpose among the several counties, basing such apportionment

29  upon the amount expended for the payment of jurors and

30  witnesses in each county during the prior fiscal year. In such

31  case, each county shall be paid by warrant, issued by the

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 1  Chief Financial Officer Comptroller, only the amount so

 2  apportioned to each county, and, when the amount so

 3  apportioned is insufficient to pay in full all the jurors and

 4  witnesses during a quarterly fiscal period, the clerk of the

 5  court shall apportion the money received pro rata among the

 6  jurors and witnesses entitled to pay and shall give to each

 7  juror or witness a certificate of the amount of compensation

 8  still due, which certificate shall be held by the State Courts

 9  Administrator as other demands against the state.

10         Section 95.  Section 40.33, Florida Statutes, is

11  amended to read:

12         40.33  Deficiency.--If the compensation of jurors and

13  witnesses during a quarterly fiscal period exceeds the amount

14  estimated by the clerk of the court and therefore is

15  insufficient to pay in full the jurors and witnesses, the

16  clerk of the court shall make a further requisition upon the

17  State Courts Administrator for the amount necessary to pay

18  such default, and the amount required shall be transmitted to

19  the clerk of the court by warrant issued by the Chief

20  Financial Officer Comptroller in the same manner as the

21  original requisition or order.

22         Section 96.  Subsection (2) of section 40.34, Florida

23  Statutes, is amended to read:

24         40.34  Clerks to make triplicate payroll.--

25         (2)  The form of such payroll shall be prescribed by

26  the Chief Financial Officer Comptroller.

27         Section 97.  Section 40.35, Florida Statutes, is

28  amended to read:

29         40.35  Accounting and payment to the State Courts

30  Administrator.--

31  

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 1         (1)  The clerk of the court shall, within 2 weeks after

 2  the last day of the quarterly fiscal period, render to the

 3  State Courts Administrator a full statement of accounts for

 4  moneys received and disbursed under the provisions of this

 5  chapter and refund to the State Courts Administrator any

 6  balance in the clerk's hands.  If upon audit the State Courts

 7  Administrator shall determine a balance due the clerk of the

 8  court, the State Courts Administrator shall submit a request

 9  for payment to the Chief Financial Officer Comptroller.

10         (2)  If a clerk of the court fails to account for and

11  pay over promptly the balance of all moneys paid him or her,

12  the sureties, if any, on a clerk's official bond are liable

13  and responsible for same; and the State Courts Administrator

14  shall report to the Governor and the Chief Financial Officer

15  Comptroller any failure on the part of the clerk of the court

16  to report and faithfully account for any such moneys.

17         Section 98.  Paragraph (b) of subsection (5) of section

18  43.16, Florida Statutes, is amended to read:

19         43.16  Justice Administrative Commission; membership,

20  powers and duties.--

21         (5)  The duties of the commission shall include, but

22  not be limited to, the following:

23         (b)  Each state attorney and public defender and the

24  Judicial Qualifications Commission shall continue to prepare

25  necessary budgets, vouchers which represent valid claims for

26  reimbursement by the state for authorized expenses, and other

27  things incidental to the proper administrative operation of

28  the office, such as revenue transmittals to the Chief

29  Financial Officer treasurer, automated systems plans, etc.,

30  but will forward same to the commission for recording and

31  submission to the proper state officer.  However, when

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 1  requested by a state attorney or a public defender or the

 2  Judicial Qualifications Commission, the commission will either

 3  assist in the preparation of budget requests, voucher

 4  schedules, and other forms and reports or accomplish the

 5  entire project involved.

 6         Section 99.  Subsections (1), (3), and (4) of section

 7  43.19, Florida Statutes, are amended to read:

 8         43.19  Money paid into court; unclaimed funds.--

 9         (1)  In every case in which the right to withdraw money

10  deposited as hereinbefore provided has been adjudicated or is

11  not in dispute and the money has remained so deposited for 5

12  years or more unclaimed by the person, firm, or corporation

13  entitled thereto, on or before December 1 of each year the

14  judge, or one of the judges, of the court shall direct that

15  the money be deposited with the Chief Financial Officer

16  Treasurer to the credit of the State School Fund, to become a

17  part of that fund, subject to the right of the person, firm,

18  or corporation entitled thereto to receive the money as

19  provided in subsection (3).

20         (3)  Any person, firm or corporation entitled to any of

21  the money may obtain an order directing the payment of the

22  money to the claimant on written petition to the court from

23  which the money was deposited or its successor, and written

24  notice to the state attorney of the circuit wherein the court

25  is situate, whether or not the court is a circuit court, and

26  proof of right thereto, and the money deposited shall

27  constitute and be a permanent appropriation for payments by

28  the Chief Financial Officer Treasurer of the state in

29  obedience of such orders.

30  

31  

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 1         (4)  All interest and income that accrue from the money

 2  while on deposit with the Chief Financial Officer Treasurer to

 3  the credit of the State School Fund belong to that fund.

 4         Section 100.  Subsections (3) and (4) of section

 5  48.151, Florida Statutes, are amended to read:

 6         48.151  Service on statutory agents for certain

 7  persons.--

 8         (3)  The Chief Financial Officer Insurance Commissioner

 9  and Treasurer or his or her assistant or deputy or another

10  person in charge of the office is the agent for service of

11  process on all insurers applying for authority to transact

12  insurance in this state, all licensed nonresident insurance

13  agents, all nonresident disability insurance agents licensed

14  by the Department of Insurance pursuant to s. 626.835, any

15  unauthorized insurer under s. 626.906 or s. 626.937, domestic

16  reciprocal insurers, fraternal benefit societies under chapter

17  632, automobile inspection and warranty associations under

18  chapter 634, prepaid limited health service organizations

19  under chapter 636 ambulance service associations, and persons

20  required to file statements under s. 628.461.

21         (4)  The Director of the Office of Financial

22  Institutions and Securities Regulation of the Financial

23  Services Commission Comptroller is the agent for service of

24  process for any issuer as defined in s. 517.021, or any

25  dealer, investment adviser, or associated person registered

26  with that office the Department of Banking and Finance, for

27  any violation of any provision of chapter 517.

28         Section 101.  Subsection (1) of section 55.03, Florida

29  Statutes, is amended to read:

30         55.03  Judgments; rate of interest, generally.--

31  

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 1         (1)  On December 1 of each year beginning December 1,

 2  1994, the Chief Financial Officer Comptroller of the State of

 3  Florida shall set the rate of interest that shall be payable

 4  on judgments or decrees for the year beginning January 1 by

 5  averaging the discount rate of the Federal Reserve Bank of New

 6  York for the preceding year, then adding 500 basis points to

 7  the averaged federal discount rate. The Chief Financial

 8  Officer Comptroller shall inform the clerk of the courts and

 9  chief judge for each judicial circuit of the rate that has

10  been established for the upcoming year. The initial interest

11  rate established by the Comptroller shall take effect on

12  January 1, 1995, and the interest rate established by the

13  Chief Financial Officer Comptroller in subsequent years shall

14  take effect on January 1 of each following year. Judgments

15  obtained on or after January 1, 1995, shall use the previous

16  statutory rate for time periods before January 1, 1995, for

17  which interest is due and shall apply the rate set by the

18  Chief Financial Officer Comptroller for time periods after

19  January 1, 1995, for which interest is due. Nothing contained

20  herein shall affect a rate of interest established by written

21  contract or obligation.

22         Section 102.  Section 57.091, Florida Statutes, is

23  amended to read:

24         57.091  Costs; refunded to counties in certain

25  proceedings relating to state prisoners.--All lawful fees,

26  costs, and expenses hereafter adjudged against, and paid by,

27  any county in all competency proceedings and all criminal

28  prosecutions against state prisoners imprisoned in a state

29  correctional institution, and in all habeas corpus cases

30  brought to test the legality of the imprisonment of state

31  prisoners of such correctional institutions, shall be refunded

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 1  to the county paying the sum from the General Revenue Fund in

 2  the State Treasury in the manner and to the extent herein

 3  provided, to wit:  between the 1st and 15th of the month next

 4  succeeding the month in which the fees, costs, and expenses

 5  have been allowed and paid by the county, the clerk of the

 6  court shall make requisition on the Department of Corrections

 7  for the fees, costs, and expenses so allowed and paid during

 8  the preceding month, giving the style of the cases in which

 9  fees, costs, and expenses were incurred and the amount and

10  items of cost in each case; providing a certified copy of the

11  judgment adjudging the fees, costs, and expenses against the

12  county and showing that the amount represented thereby has

13  been approved by the presiding judge, paid by the county, and

14  verified by the clerk; and attaching a certified copy of the

15  bill as approved and allowed by the board of county

16  commissioners of the county. If the Department of Corrections

17  finds the bills legal and adjudged against and paid by the

18  county, the department shall submit a request to the Chief

19  Financial Officer Comptroller to draw a warrant in the amount

20  thereof, or in the amount the department finds legal and

21  adjudged against and paid by the county, in favor of the

22  county paying the fees, costs, and expenses, which shall be

23  paid by the Chief Financial Officer State Treasurer from the

24  general revenue funds of the state.

25         Section 103.  Subsections (1), (3), and (4) of section

26  68.083, Florida Statutes, are amended to read:

27         68.083  Civil actions for false claims.--

28         (1)  The department may diligently investigate a

29  violation under s. 68.082. If the department finds that a

30  person has violated or is violating s. 68.082, the department

31  may bring a civil action under the Florida False Claims Act

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 1  against the person. The Department of Financial Services

 2  Banking and Finance may bring a civil action under this

 3  section if the action arises from an investigation by that

 4  department and the Department of Legal Affairs has not filed

 5  an action under this act.

 6         (3)  The complaint shall be identified on its face as a

 7  qui tam action and shall be filed in the circuit court of the

 8  Second Judicial Circuit, in and for Leon County. Immediately

 9  upon the filing of the complaint, a copy of the complaint and

10  written disclosure of substantially all material evidence and

11  information the person possesses shall be served on the

12  Attorney General, as head of the department, and on the Chief

13  Financial Officer Comptroller, as head of the Department of

14  Financial Services Banking and Finance, by registered mail,

15  return receipt requested. The department, or the Department of

16  Financial Services Banking and Finance under the circumstances

17  specified in subsection (4), may elect to intervene and

18  proceed with the action, on behalf of the state, within 90

19  days after it receives both the complaint and the material

20  evidence and information.

21         (4)  If a person brings an action under subsection (2)

22  and the action is based upon the facts underlying a pending

23  investigation by the Department of Financial Services Banking

24  and Finance, the Department of Financial Services Banking and

25  Finance, instead of the department, may take over the action

26  on behalf of the state. In order to take over the action, the

27  Department of Financial Services Banking and Finance must give

28  the department written notification within 20 days after the

29  action is filed that the Department of Financial Services

30  Banking and Finance is conducting an investigation of the

31  facts of the action and that the Department of Financial

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 1  Services Banking and Finance, instead of the department, will

 2  take over the action filed under subsection (2). If the

 3  Department of Financial Services Banking and Finance takes

 4  over the action under this subsection, the word "department"

 5  as used in this act means the Department of Financial Services

 6  Banking and Finance, and that department, for purposes of that

 7  action, shall have all rights and standing granted the

 8  department under this act.

 9         Section 104.  Subsections (3) and (6) of section

10  68.084, Florida Statutes, are amended to read:

11         68.084  Rights of the parties in civil actions.--

12         (3)  If the department elects not to proceed with the

13  action, the person who initiated the action has the right to

14  conduct the action. If the Attorney General, as head of the

15  department, or the Chief Financial Officer Comptroller, as

16  head of the Department of Financial Services Banking and

17  Finance, so requests, it shall be served, at the requesting

18  department's expense, with copies of all pleadings and motions

19  filed in the action and copies of all deposition transcripts.

20  When a person proceeds with the action, the court, without

21  limiting the rights of the person initiating the action, may

22  nevertheless permit the department to intervene and take over

23  the action on behalf of the state at a later date upon showing

24  of good cause.

25         (6)  The Department of Financial Services Banking and

26  Finance, or the department, may intervene on its own behalf as

27  a matter of right.

28         Section 105.  Subsection (3) of section 68.087, Florida

29  Statutes, is amended to read:

30         68.087  Exemptions to civil actions.--

31  

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 1         (3)  No court shall have jurisdiction over an action

 2  brought under this act based upon the public disclosure of

 3  allegations or transactions in a criminal, civil, or

 4  administrative hearing; in a legislative, administrative,

 5  inspector general, or Auditor General, Chief Financial Officer

 6  Comptroller, or Department of Financial Services Banking and

 7  Finance report, hearing, audit, or investigation; or from the

 8  news media, unless the action is brought by the department, or

 9  unless the person bringing the action is an original source of

10  the information. For purposes of this subsection, the term

11  "original source" means an individual who has direct and

12  independent knowledge of the information on which the

13  allegations are based and has voluntarily provided the

14  information to the department before filing an action under

15  this act based on the information.

16         Section 106.  Section 68.092, Florida Statutes, is

17  amended to read:

18         68.092  Deposit of recovered moneys.--All moneys

19  recovered by the Chief Financial Officer Comptroller, as head

20  of the Department of Financial Services Banking and Finance,

21  under s. 68.086(1) in any civil action for violation of the

22  Florida False Claims Act shall be deposited in the

23  Administrative Trust Fund of the Department of Financial

24  Services Banking and Finance.

25         Section 107.  Section 77.0305, Florida Statutes, is

26  amended to read:

27         77.0305  Continuing writ of garnishment against salary

28  or wages.--Notwithstanding any other provision of this

29  chapter, if salary or wages are to be garnished to satisfy a

30  judgment, the court shall issue a continuing writ of

31  garnishment to the judgment debtor's employer which provides

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 1  for the periodic payment of a portion of the salary or wages

 2  of the judgment debtor as the salary or wages become due until

 3  the judgment is satisfied or until otherwise provided by court

 4  order.  A debtor's status as an employee of the state or its

 5  agencies or political subdivisions does not preclude a

 6  judgment creditor's right to garnish the debtor's wages.  For

 7  the purposes of this section, the state includes the judicial

 8  branch and the legislative branch as defined in s. 216.011.

 9  The state, for itself and for its agencies and subdivisions,

10  waives sovereign immunity for the express and limited purpose

11  necessary to carry out this section.  The court shall allow

12  the judgment debtor's employer to collect up to $5 against the

13  salary or wages of the judgment debtor to reimburse the

14  employer for administrative costs for the first deduction from

15  the judgment debtor's salary or wages and up to $2 for each

16  deduction thereafter.  The funds collected by the state under

17  this section must be deposited in the Department of Financial

18  Services Banking and Finance Administrative Trust Fund for

19  purposes of carrying out this section.

20         Section 108.  Section 92.39, Florida Statutes, is

21  amended to read:

22         92.39  Evidence of individual's claim against the state

23  in suits between them.--In suits between the state and

24  individuals, no claim for a credit shall be allowed upon

25  trial, but such as shall appear to have been presented to the

26  Chief Financial Officer Comptroller for his or her the

27  Comptroller's examination, and by him or her disallowed in

28  whole or in part, unless it shall be proved to the

29  satisfaction of the court that the defendant is, at the time

30  of the trial, in possession of vouchers not before in the

31  defendant's power to procure, and that the defendant was

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 1  prevented from exhibiting a claim for such credit at the Chief

 2  Financial Officer's Comptroller's office by unavoidable

 3  accident.

 4         Section 109.  Subsection (4) of section 99.097, Florida

 5  Statutes, is amended to read:

 6         99.097  Verification of signatures on petitions.--

 7         (4)  The supervisor shall be paid in advance the sum of

 8  10 cents for each signature checked or the actual cost of

 9  checking such signature, whichever is less, by the candidate

10  or, in the case of a petition to have an issue placed on the

11  ballot, by the person or organization submitting the petition.

12  However, if a candidate, person, or organization seeking to

13  have an issue placed upon the ballot cannot pay such charges

14  without imposing an undue burden on personal resources or upon

15  the resources otherwise available to such candidate, person,

16  or organization, such candidate, person, or organization

17  shall, upon written certification of such inability given

18  under oath to the supervisor, be entitled to have the

19  signatures verified at no charge.  In the event a candidate,

20  person, or organization submitting a petition to have an issue

21  placed upon the ballot is entitled to have the signatures

22  verified at no charge, the supervisor of elections of each

23  county in which the signatures are verified at no charge shall

24  submit the total number of such signatures checked in the

25  county to the Chief Financial Officer Comptroller no later

26  than December 1 of the general election year, and the Chief

27  Financial Officer Comptroller shall cause such supervisor of

28  elections to be reimbursed from the General Revenue Fund in an

29  amount equal to 10 cents for each name checked or the actual

30  cost of checking such signatures, whichever is less.  In no

31  event shall such reimbursement of costs be deemed or applied

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 1  as extra compensation for the supervisor.  Petitions shall be

 2  retained by the supervisors for a period of 1 year following

 3  the election for which the petitions were circulated.

 4         Section 110.  Section 107.11, Florida Statutes, is

 5  amended to read:

 6         107.11  Appropriation for expenses.--For the purpose of

 7  defraying the expenses of preparing for, conducting, holding

 8  and declaring the result of the election provided for by this

 9  chapter and also for the purpose of defraying the expenses

10  allowed by this chapter for the holding of sessions of the

11  convention as herein provided, to be audited by the Chief

12  Financial Officer Comptroller, there is appropriated out of

13  the General Revenue Fund of the State of Florida a sufficient

14  sum of money for the payment of all amounts necessary to be

15  expended under the terms of this chapter, which sums of money

16  shall be disbursed by the State of Florida pursuant to

17  warrants drawn by the Chief Financial Officer Comptroller upon

18  the Treasurer for the payment of same.

19         Section 111.  Paragraph (a) of subsection (2) of

20  section 110.1127, Florida Statutes, is amended to read:

21         110.1127  Employee security checks.--

22         (2)(a)  All positions within the Division of Treasury

23  of the Department of Financial Services Insurance are deemed

24  to be positions of special trust or responsibility, and a

25  person may be disqualified for employment in any such position

26  by reason of:

27         1.  The conviction or prior conviction of a crime which

28  is reasonably related to the nature of the position sought or

29  held by the individual; or

30         2.  The entering of a plea of nolo contendere or, when

31  a jury verdict of guilty is rendered but adjudication of guilt

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 1  is withheld, with respect to a crime which is reasonably

 2  related to the nature of the position sought or held by the

 3  individual.

 4         Section 112.  Subsection (1) of section 110.113,

 5  Florida Statutes, is amended to read:

 6         110.113  Pay periods for state officers and employees;

 7  salary payments by direct deposit.--

 8         (1)  The normal pay period for salaries of state

 9  officers and employees shall be 1 month.  The Department of

10  Financial Services Banking and Finance shall issue either

11  monthly or biweekly salary payments by state warrants or by

12  direct deposit pursuant to s. 17.076 or make semimonthly

13  salary payments by direct deposit pursuant to s. 17.076, as

14  requested by the head of each state agency and approved by the

15  Executive Office of the Governor and the Department of

16  Financial Services Banking and Finance.

17         Section 113.  Subsection (1) of section 110.114,

18  Florida Statutes, is amended to read:

19         110.114  Employee wage deductions.--

20         (1)  The state or any of its departments, bureaus,

21  commissions, and officers are authorized and permitted, with

22  the concurrence of the Department of Financial Services

23  Banking and Finance, to make deductions from the salary or

24  wage of any employee or employees in such amount as shall be

25  authorized and requested by such employee or employees and for

26  such purpose as shall be authorized and requested by such

27  employee or employees and shall pay such sums so deducted as

28  directed by such employee or employees.  The concurrence of

29  the Department of Financial Services Banking and Finance shall

30  not be required for the deduction of a certified bargaining

31  agent's membership dues deductions pursuant to s. 447.303 or

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 1  any deductions authorized by a collective bargaining

 2  agreement.

 3         Section 114.  Subsection (1) of section 110.116,

 4  Florida Statutes, is amended to read:

 5         110.116  Personnel information system; payroll

 6  procedures.--

 7         (1)  The Department of Management Services shall

 8  establish and maintain, in coordination with the payroll

 9  system of the Department of Financial Services Banking and

10  Finance, a complete personnel information system for all

11  authorized and established positions in the state service,

12  with the exception of employees of the Legislature.  The

13  specifications shall be developed in conjunction with the

14  payroll system of the Department of Financial Services Banking

15  and Finance and in coordination with the Auditor General.  The

16  Department of Financial Services Banking and Finance shall

17  determine that the position occupied by each employee has been

18  authorized and established in accordance with the provisions

19  of s. 216.251. The Department of Management Services shall

20  develop and maintain a position numbering system that will

21  identify each established position, and such information shall

22  be a part of the payroll system of the Department of Financial

23  Services Banking and Finance.  With the exception of employees

24  of the Legislature, this system shall include all career

25  service positions and those positions exempted from career

26  service provisions, notwithstanding the funding source of the

27  salary payments, and information regarding persons receiving

28  payments from other sources. Necessary revisions shall be made

29  in the personnel and payroll procedures of the state to avoid

30  duplication insofar as is feasible.  A list shall be organized

31  by budget entity to show the employees or vacant positions

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 1  within each budget entity.  This list shall be available to

 2  the Speaker of the House of Representatives and the President

 3  of the Senate upon request.

 4         Section 115.  Paragraph (a) of subsection (3) and

 5  paragraph (b) of subsection (6) of section 110.1227, Florida

 6  Statutes, are amended to read:

 7         110.1227  Florida Employee Long-Term-Care Plan Act.--

 8         (3)  The Department of Management Services and the

 9  department shall, in consultation with public employers and

10  employees and representatives from unions and associations

11  representing state, university, local government, and other

12  public employees, establish and supervise the implementation

13  and administration of a self-funded or fully insured

14  long-term-care plan entitled "Florida Employee Long-Term-Care

15  Plan."

16         (a)  The Department of Management Services and the

17  department shall, in consultation with the Office of Insurance

18  Regulation of the Financial Services Commission Department of

19  Insurance, contract for actuarial, professional-administrator,

20  and other services for the Florida Employee Long-Term-Care

21  Plan.

22         (6)  A Florida Employee Long-Term-Care Plan Board of

23  Directors is created, composed of nine members who shall serve

24  2-year terms, to be appointed after May 1, 1999, as follows:

25         (b)  The Chief Financial Officer Insurance Commissioner

26  shall appoint an actuary.

27         Section 116.  Paragraph (f) of subsection (5) of

28  section 110.1228, Florida Statutes, is amended to read:

29         110.1228  Participation by small counties, small

30  municipalities, and district school boards located in small

31  counties.--

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 1         (5)  If the department determines that a small county,

 2  small municipality, or district school board is eligible to

 3  enroll, the small county, small municipality, or district

 4  school board must agree to the following terms and conditions:

 5         (f)  If a small county, small municipality, or district

 6  school board employer fails to make the payments required by

 7  this section to fully reimburse the state, the Department of

 8  Revenue or the Department of Financial Services Banking and

 9  Finance shall, upon the request of the Department of

10  Management Services, deduct the amount owed by the employer

11  from any funds not pledged to bond debt service satisfaction

12  that are to be distributed by it to the small county, small

13  municipality, or district school board. The amounts so

14  deducted shall be transferred to the Department of Management

15  Services for further distribution to the trust funds in

16  accordance with this chapter.

17         Section 117.  Paragraph (f) of subsection (4) and

18  paragraphs (b) and (c) of subsection (5) of section 110.123,

19  Florida Statutes, are amended to read:

20         110.123  State group insurance program.--

21         (4)  PAYMENT OF PREMIUMS; CONTRIBUTION BY STATE;

22  LIMITATION ON ACTIONS TO PAY AND COLLECT PREMIUMS.--

23         (f)  Pursuant to the request of each state officer,

24  full-time or part-time state employee, or retiree

25  participating in the state group insurance program, and upon

26  certification of the employing agency approved by the

27  department, the Chief Financial Officer Comptroller shall

28  deduct from the salary or retirement warrant payable to each

29  participant the amount so certified and shall handle such

30  deductions in accordance with rules established by the

31  department.

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 1         (5)  DEPARTMENT POWERS AND DUTIES.--The department is

 2  responsible for the administration of the state group

 3  insurance program.  The department shall initiate and

 4  supervise the program as established by this section and shall

 5  adopt such rules as are necessary to perform its

 6  responsibilities.  To implement this program, the department

 7  shall, with prior approval by the Legislature:

 8         (b)  Prepare, in cooperation with the Office of

 9  Insurance Regulation of the Financial Services Commission

10  Department of Insurance, the specifications necessary to

11  implement the program.

12         (c)  Contract on a competitive proposal basis with an

13  insurance carrier or carriers, or professional administrator,

14  determined by the Office of Insurance Regulation of the

15  Financial Services Commission Department of Insurance to be

16  fully qualified, financially sound, and capable of meeting all

17  servicing requirements.  Alternatively, the department may

18  self-insure any plan or plans contained in the state group

19  insurance program subject to approval based on actuarial

20  soundness by the Office of Insurance Regulation Department of

21  Insurance.  The department may contract with an insurance

22  company or professional administrator qualified and approved

23  by the Office of Insurance Regulation Department of Insurance

24  to administer such plan. Before entering into any contract,

25  the department shall advertise for competitive proposals, and

26  such contract shall be let upon the consideration of the

27  benefits provided in relationship to the cost of such

28  benefits. In determining which entity to contract with, the

29  department shall, at a minimum, consider:  the entity's

30  previous experience and expertise in administering group

31  insurance programs of the type it proposes to administer; the

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 1  entity's ability to specifically perform its contractual

 2  obligations in this state and other governmental

 3  jurisdictions; the entity's anticipated administrative costs

 4  and claims experience; the entity's capability to adequately

 5  provide service coverage and sufficient number of experienced

 6  and qualified personnel in the areas of claims processing,

 7  recordkeeping, and underwriting, as determined by the

 8  department; the entity's accessibility to state employees and

 9  providers; the financial solvency of the entity, using

10  accepted business sector measures of financial performance.

11  The department may contract for medical services which will

12  improve the health or reduce medical costs for employees who

13  participate in the state group insurance plan.

14  

15  Final decisions concerning enrollment, the existence of

16  coverage, or covered benefits under the state group insurance

17  program shall not be delegated or deemed to have been

18  delegated by the department.

19         Section 118.  Section 110.125, Florida Statutes, is

20  amended to read:

21         110.125  Administrative costs.--The administrative

22  expenses and costs of operating the personnel program

23  established by this chapter shall be paid by the various

24  agencies of the state government, and each such agency shall

25  include in its budget estimates its pro rata share of such

26  cost as determined by the Department of Management Services.

27  To establish an equitable division of the costs, the amount to

28  be paid by each agency shall be determined in such proportion

29  as the service rendered to each agency bears to the total

30  service rendered under the provisions of this chapter.  The

31  amounts paid to the Department of Management Services which

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 1  are attributable to positions within the Senior Management

 2  Service and the Selected Professional Service shall be used

 3  for the administration of such services, training activities

 4  for positions within those services, and the development and

 5  implementation of a database of pertinent historical

 6  information on exempt positions.  Should any state agency

 7  become more than 90 days delinquent in payment of this

 8  obligation, the department shall certify to the Chief

 9  Financial Officer Comptroller the amount due and the Chief

10  Financial Officer Comptroller shall transfer the amount due to

11  the department from any debtor agency funds available.

12         Section 119.  Paragraph (a) of subsection (1) of

13  section 110.181, Florida Statutes, is amended to read:

14         110.181  Florida State Employees' Charitable

15  Campaign.--

16         (1)  CREATION AND ORGANIZATION OF CAMPAIGN.--

17         (a)  The Department of Management Services shall

18  establish and maintain, in coordination with the payroll

19  system of the Department of Financial Services Banking and

20  Finance, an annual Florida State Employees' Charitable

21  Campaign.  Except as provided in subsection (5), this annual

22  fundraising drive is the only authorized charitable

23  fundraising drive directed toward state employees within work

24  areas during work hours, and for which the state will provide

25  payroll deduction.

26         Section 120.  Subsection (1) of section 110.2037,

27  Florida Statutes, is amended to read:

28         110.2037  Alternative benefits; tax-sheltered annual

29  leave and sick leave payments and special compensation

30  payments.--

31  

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 1         (1)  The Department of Management Services has

 2  authority to adopt tax-sheltered plans under s. 401(a) of the

 3  Internal Revenue Code for state employees who are eligible for

 4  payment for accumulated leave. The department, upon adoption

 5  of the plans, shall contract for a private vendor or vendors

 6  to administer the plans. These plans shall be limited to state

 7  employees who are over age 55 and who are: eligible for

 8  accumulated leave and special compensation payments and

 9  separating from employment with 10 years of service in

10  accordance with the Internal Revenue Code, or who are

11  participating in the Deferred Retirement Option Program on or

12  after July 1, 2001. The plans must provide benefits in a

13  manner that minimizes the tax liability of the state and

14  participants. The plans must be funded by employer

15  contributions of payments for accumulated leave or special

16  compensation payments, or both, as specified by the

17  department. The plans must have received all necessary federal

18  and state approval as required by law, must not adversely

19  impact the qualified status of the Florida Retirement System

20  defined benefit or defined contribution plans or the pretax

21  benefits program, and must comply with the provisions of s.

22  112.65. Adoption of any plan is contingent on: the department

23  receiving appropriate favorable rulings from the Internal

24  Revenue Service; the department negotiating under the

25  provisions of chapter 447, where applicable; and the Chief

26  Financial Officer Comptroller making appropriate changes to

27  the state payroll system. The department's request for

28  proposals by vendors for such plans may require that the

29  vendors provide market-risk or volatility ratings from

30  recognized rating agencies for each of their investment

31  products. The department shall provide for a system of

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 1  continuous quality assurance oversight to ensure that the

 2  program objectives are achieved and that the program is

 3  prudently managed.

 4         Section 121.  Subsection (6) of section 110.205,

 5  Florida Statutes, is amended to read:

 6         110.205  Career service; exemptions.--

 7         (6)  EXEMPTION OF CHIEF INSPECTOR OF BOILER SAFETY

 8  PROGRAM, DEPARTMENT OF FINANCIAL SERVICES INSURANCE.--In

 9  addition to those positions exempted from this part, there is

10  hereby exempted from the Career Service System the chief

11  inspector of the boiler inspection program of the Department

12  of Financial Services Insurance. The salary range of this

13  position shall be established by the Department of Management

14  Services in accordance with the classification and pay plan

15  established for the Selected Exempt Service.

16         Section 122.  Paragraph (b) of subsection (5),

17  paragraph (b) of subsection (7), paragraph (b) of subsection

18  (8), and subsections (9), (11), and (13) of section 112.061,

19  Florida Statutes, are amended to read:

20         112.061  Per diem and travel expenses of public

21  officers, employees, and authorized persons.--

22         (5)  COMPUTATION OF TRAVEL TIME FOR REIMBURSEMENT.--For

23  purposes of reimbursement and methods of calculating

24  fractional days of travel, the following principles are

25  prescribed:

26         (b)  A traveler shall not be reimbursed on a per diem

27  basis for Class C travel, but shall receive subsistence as

28  provided in this section, which allowance for meals shall be

29  based on the following schedule:

30         1.  Breakfast--When travel begins before 6 a.m. and

31  extends beyond 8 a.m.

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 1         2.  Lunch--When travel begins before 12 noon and

 2  extends beyond 2 p.m.

 3         3.  Dinner--When travel begins before 6 p.m. and

 4  extends beyond 8 p.m., or when travel occurs during nighttime

 5  hours due to special assignment.

 6  

 7  No allowance shall be made for meals when travel is confined

 8  to the city or town of the official headquarters or immediate

 9  vicinity; except assignments of official business outside the

10  traveler's regular place of employment if travel expenses are

11  approved.  The Chief Financial Officer Comptroller shall

12  establish a schedule for processing Class C travel subsistence

13  payments at least on a monthly basis.

14         (7)  TRANSPORTATION.--

15         (b)  The Department of Financial Services Banking and

16  Finance may provide any form it deems necessary to cover

17  travel requests for traveling on official business and when

18  paid by the state.

19         (8)  OTHER EXPENSES.--

20         (b)  Other expenses which are not specifically

21  authorized by this section may be approved by the Department

22  of Financial Services Banking and Finance pursuant to rules

23  adopted by it.  Expenses approved pursuant to this paragraph

24  shall be reported by the Department of Financial Services

25  Banking and Finance to the Auditor General annually.

26         (9)  RULES AND REGULATIONS.--

27         (a)  The Department of Financial Services Banking and

28  Finance shall adopt promulgate such rules and regulations,

29  including, but not limited to, the general criteria to be used

30  by a state agency to predetermine justification for attendance

31  by state officers and employees and authorized persons at

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 1  conventions and conferences, and prescribe such forms as are

 2  may be necessary to effectuate the purposes of this section.

 3  The department may also adopt rules prescribing the proper

 4  disposition and use of promotional items and rebates offered

 5  by common carriers and other entities in connection with

 6  travel at public expense; however, before adopting such rules,

 7  the department shall consult with the appropriation committees

 8  of the Legislature.

 9         (b)  Each state agency shall adopt promulgate such

10  additional specific rules and regulations and specific

11  criteria to be used by it to predetermine justification for

12  attendance by state officers and employees and authorized

13  persons at conventions and conferences, not in conflict with

14  the rules and regulations of the Department of Financial

15  Services Banking and Finance or with the general criteria to

16  be used by a state agency to predetermine justification for

17  attendance by state officers and employees and authorized

18  persons at conventions, as may be necessary to effectuate the

19  purposes of this section.

20         (11)  TRAVEL AUTHORIZATION AND VOUCHER FORMS.--

21         (a)  Authorization forms.--The Department of Financial

22  Services Banking and Finance shall furnish a uniform travel

23  authorization request form which shall be used by all state

24  officers and employees and authorized persons when requesting

25  approval for the performance of travel to a convention or

26  conference.  The form shall include, but not be limited to,

27  provision for the name of each traveler, purpose of travel,

28  period of travel, estimated cost to the state, and a statement

29  of benefits accruing to the state by virtue of such travel.  A

30  copy of the program or agenda of the convention or conference,

31  itemizing registration fees and any meals or lodging included

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 1  in the registration fee, shall be attached to, and filed with,

 2  the copy of the travel authorization request form on file with

 3  the agency.  The form shall be signed by the traveler and by

 4  the traveler's supervisor stating that the travel is to be

 5  incurred in connection with official business of the state.

 6  The head of the agency or his or her designated representative

 7  shall not authorize or approve such request in the absence of

 8  the appropriate signatures. A copy of the travel authorization

 9  form shall be attached to, and become a part of, the support

10  of the agency's copy of the travel voucher.

11         (b)  Voucher forms.--

12         1.  The Department of Financial Services Banking and

13  Finance shall furnish a uniform travel voucher form which

14  shall be used by all state officers and employees and

15  authorized persons when submitting travel expense statements

16  for approval and payment.  No travel expense statement shall

17  be approved for payment by the Chief Financial Officer

18  Comptroller unless made on the form prescribed and furnished

19  by the department. The travel voucher form shall provide for,

20  among other things, the purpose of the official travel and a

21  certification or affirmation, to be signed by the traveler,

22  indicating the truth and correctness of the claim in every

23  material matter, that the travel expenses were actually

24  incurred by the traveler as necessary in the performance of

25  official duties, that per diem claimed has been appropriately

26  reduced for any meals or lodging included in the convention or

27  conference registration fees claimed by the traveler, and that

28  the voucher conforms in every respect with the requirements of

29  this section.  The original copy of the executed uniform

30  travel authorization request form shall be attached to the

31  uniform travel voucher on file with the respective agency.

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 1         2.  Statements for travel expenses incidental to the

 2  rendering of medical services for and on behalf of clients of

 3  the Department of Health shall be on forms approved by the

 4  Department of Financial Services Banking and Finance.

 5         (13)  DIRECT PAYMENT OF EXPENSES BY AGENCY.--Whenever

 6  an agency requires an employee to incur either Class A or

 7  Class B travel on emergency notice to the traveler, such

 8  traveler may request the agency to pay his or her expenses for

 9  meals and lodging directly to the vendor, and the agency may

10  pay the vendor the actual expenses for meals and lodging

11  during the travel period, limited to an amount not to exceed

12  that authorized pursuant to this section. In emergency

13  situations, the agency head or his or her designee may

14  authorize an increase in the amount paid for a specific meal,

15  provided that the total daily cost of meals does not exceed

16  the total amount authorized for meals each day.  The agency

17  head or his or her designee may also grant prior approval for

18  a state agency to make direct payments of travel expenses in

19  other situations that result in cost savings to the state, and

20  such cost savings shall be documented in the voucher submitted

21  to the Chief Financial Officer Comptroller for the direct

22  payment of travel expenses.  The provisions of this subsection

23  shall not be deemed to apply to any legislator or to any

24  employee of the Legislature.

25         Section 123.  Subsections (2), (5), and (6) of section

26  112.08, Florida Statutes, are amended to read:

27         112.08  Group insurance for public officers, employees,

28  and certain volunteers; physical examinations.--

29         (2)(a)  Every local governmental unit is authorized to

30  provide and pay out of its available funds for all or part of

31  the premium for life, health, accident, hospitalization, legal

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 1  expense, or annuity insurance, or all or any kinds of such

 2  insurance, for the officers and employees of the local

 3  governmental unit and for health, accident, hospitalization,

 4  and legal expense insurance for the dependents of such

 5  officers and employees upon a group insurance plan and, to

 6  that end, to enter into contracts with insurance companies or

 7  professional administrators to provide such insurance.  Before

 8  entering any contract for insurance, the local governmental

 9  unit shall advertise for competitive bids; and such contract

10  shall be let upon the basis of such bids. If a contracting

11  health insurance provider becomes financially impaired as

12  determined by the Office of Insurance Regulation of the

13  Financial Services Commission Department of Insurance or

14  otherwise fails or refuses to provide the contracted-for

15  coverage or coverages, the local government may purchase

16  insurance, enter into risk management programs, or contract

17  with third-party administrators and may make such acquisitions

18  by advertising for competitive bids or by direct negotiations

19  and contract. The local governmental unit may undertake

20  simultaneous negotiations with those companies which have

21  submitted reasonable and timely bids and are found by the

22  local governmental unit to be fully qualified and capable of

23  meeting all servicing requirements.  Each local governmental

24  unit may self-insure any plan for health, accident, and

25  hospitalization coverage or enter into a risk management

26  consortium to provide such coverage, subject to approval based

27  on actuarial soundness by the Office of Insurance Regulation

28  Department of Insurance; and each shall contract with an

29  insurance company or professional administrator qualified and

30  approved by the office Department of Insurance to administer

31  such a plan.

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 1         (b)  In order to obtain approval from the Office of

 2  Insurance Regulation Department of Insurance of any

 3  self-insured plan for health, accident, and hospitalization

 4  coverage, each local governmental unit or consortium shall

 5  submit its plan along with a certification as to the actuarial

 6  soundness of the plan, which certification is prepared by an

 7  actuary who is a member of the Society of Actuaries or the

 8  American Academy of Actuaries. The Office of Insurance

 9  Regulation Department of Insurance shall not approve the plan

10  unless it determines that the plan is designed to provide

11  sufficient revenues to pay current and future liabilities, as

12  determined according to generally accepted actuarial

13  principles.  After implementation of an approved plan, each

14  local governmental unit or consortium shall annually submit to

15  the Office of Insurance Regulation Department of Insurance a

16  report which includes a statement prepared by an actuary who

17  is a member of the Society of Actuaries or the American

18  Academy of Actuaries as to the actuarial soundness of the

19  plan.  The report is due 90 days after the close of the fiscal

20  year of the plan.  The report shall consist of, but is not

21  limited to:

22         1.  The adequacy of contribution rates in meeting the

23  level of benefits provided and the changes, if any, needed in

24  the contribution rates to achieve or preserve a level of

25  funding deemed adequate to enable payment of the benefit

26  amounts provided under the plan and a valuation of present

27  assets, based on statement value, and prospective assets and

28  liabilities of the plan and the extent of any unfunded accrued

29  liabilities.

30         2.  A plan to amortize any unfunded liabilities and a

31  description of actions taken to reduce unfunded liabilities.

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 1         3.  A description and explanation of actuarial

 2  assumptions.

 3         4.  A schedule illustrating the amortization of any

 4  unfunded liabilities.

 5         5.  A comparative review illustrating the level of

 6  funds available to the plan from rates, investment income, and

 7  other sources realized over the period covered by the report

 8  with the assumptions used.

 9         6.  A statement by the actuary that the report is

10  complete and accurate and that in the actuary's opinion the

11  techniques and assumptions used are reasonable and meet the

12  requirements and intent of this subsection.

13         7.  Other factors or statements as required by the

14  Department of Insurance in order to determine the actuarial

15  soundness of the plan.

16  

17  All assumptions used in the report shall be based on

18  recognized actuarial principles acceptable to the Office of

19  Insurance Regulation Department of Insurance. The office

20  Department of Insurance shall review the report and shall

21  notify the administrator of the plan and each entity

22  participating in the plan, as identified by the administrator,

23  of any actuarial deficiencies.  Each local governmental unit

24  is responsible for payment of valid claims of its employees

25  that are not paid within 60 days after receipt by the plan

26  administrator or consortium.

27         (c)  Every local governmental unit is authorized to

28  expend funds for preemployment physical examinations and

29  postemployment physical examinations.

30         (5)  The Department of Management Services shall

31  initiate and supervise a group insurance program providing

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 1  death and disability benefits for active members of the

 2  Florida Highway Patrol Auxiliary, with coverage beginning July

 3  1, 1978, and purchased from state funds appropriated for that

 4  purpose.  The Department of Management Services, in

 5  cooperation with the Office of Insurance Regulation Department

 6  of Insurance, shall prepare specifications necessary to

 7  implement the program, and the Department of Management

 8  Services shall receive bids and award the contract in

 9  accordance with general law.

10         (6)  The Financial Services Commission Department of

11  Insurance is authorized to adopt rules to carry out the

12  provisions of this section as they pertain to its duties.

13         Section 124.  Paragraph (h) of subsection (2) of

14  section 112.191, Florida Statutes, is amended to read:

15         112.191  Firefighters; death benefits.--

16         (2)

17         (h)  The Division of the State Fire Marshal within the

18  Department of Financial Services Insurance shall adopt rules

19  necessary to implement this section.

20         Section 125.  Subsection (4), paragraph (a) of

21  subsection (6), paragraphs (a), (d), (f), and (h) of

22  subsection (8), paragraph (b) of subsection (10), and

23  subsections (11) and (12) of section 112.215, Florida

24  Statutes, are amended to read:

25         112.215  Government employees; deferred compensation

26  program.--

27         (4)(a)  The Chief Financial Officer Treasurer, with the

28  approval of the State Board of Administration, shall establish

29  such plan or plans of deferred compensation for state

30  employees, including all such investment vehicles or products

31  incident thereto, as may be available through, or offered by,

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 1  qualified companies or persons, and may approve one or more

 2  such plans for implementation by and on behalf of the state

 3  and its agencies and employees.

 4         (b)  If the Chief Financial Officer Treasurer deems it

 5  advisable, he or she shall have the power, with the approval

 6  of the State Board of Administration, to create a trust or

 7  other special funds for the segregation of funds or assets

 8  resulting from compensation deferred at the request of

 9  employees of the state or its agencies and for the

10  administration of such program.

11         (c)  The Chief Financial Officer Treasurer, with the

12  approval of the State Board of Administration, may delegate

13  responsibility for administration of the plan to a person the

14  Chief Financial Officer Treasurer determines to be qualified,

15  compensate such person, and, directly or through such person

16  or pursuant to a collective bargaining agreement, contract

17  with a private corporation or institution to provide such

18  services as may be part of any such plan or as may be deemed

19  necessary or proper by the Chief Financial Officer Treasurer

20  or such person, including, but not limited to, providing

21  consolidated billing, individual and collective recordkeeping

22  and accountings, asset purchase, control, and safekeeping, and

23  direct disbursement of funds to employees or other

24  beneficiaries. The Chief Financial Officer Treasurer may

25  authorize a person, private corporation, or institution to

26  make direct disbursement of funds under the plan to an

27  employee or other beneficiary only upon the order of the

28  Comptroller to the Treasurer.

29         (d)  In accordance with such approved plan, and upon

30  contract or agreement with an eligible employee, deferrals of

31  compensation may be accomplished by payroll deductions made by

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 1  the appropriate officer or officers of the state, with such

 2  funds being thereafter held and administered in accordance

 3  with the plan.

 4         (6)(a)  No deferred compensation plan of the state

 5  shall become effective until approved by the State Board of

 6  Administration and the Chief Financial Officer Treasurer is

 7  satisfied by opinion from such federal agency or agencies as

 8  may be deemed necessary that the compensation deferred

 9  thereunder and/or the investment products purchased pursuant

10  to the plan will not be included in the employee's taxable

11  income under federal or state law until it is actually

12  received by such employee under the terms of the plan, and

13  that such compensation will nonetheless be deemed compensation

14  at the time of deferral for the purposes of social security

15  coverage, for the purposes of the state retirement system, and

16  for any other retirement, pension, or benefit program

17  established by law.

18         (8)(a)  There is hereby created a Deferred Compensation

19  Advisory Council composed of seven members.

20         1.  One member shall be appointed by the Speaker of the

21  House of Representatives and the President of the Senate

22  jointly and shall be an employee of the legislative branch.

23         2.  One member shall be appointed by the Chief Justice

24  of the Supreme Court and shall be an employee of the judicial

25  branch.

26         3.  One member shall be appointed by the chair of the

27  Public Employees Relations Commission and shall be a nonexempt

28  public employee.

29         4.  The remaining four members shall be employed by the

30  executive branch and shall be appointed as follows:

31  

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 1         a.  One member shall be appointed by the Chancellor of

 2  the State University System and shall be an employee of the

 3  university system.

 4         b.  One member shall be appointed by the Chief

 5  Financial Officer Treasurer and shall be an employee of the

 6  Chief Financial Officer Treasurer.

 7         c.  One member shall be appointed by the Governor and

 8  shall be an employee of the executive branch.

 9         d.  One member shall be appointed by the Attorney

10  General Comptroller and shall be an employee of the Attorney

11  General Comptroller.

12         (d)  The council shall meet at the call of its chair,

13  at the request of a majority of its membership, or at the

14  request of the Chief Financial Officer Treasurer, but not less

15  than twice a year.  The business of the council shall be

16  presented to the council in the form of an agenda.  The agenda

17  shall be set by the Chief Financial Officer Treasurer and

18  shall include items of business requested by the council

19  members.

20         (f)  The council shall make a report of each meeting to

21  the Chief Financial Officer Treasurer, which shall show the

22  names of the members present and shall include a record of its

23  discussions, recommendations, and actions taken.  The Chief

24  Financial Officer Treasurer shall keep the records of the

25  proceedings of each meeting on file and shall make the records

26  available to any interested person or group.

27         (h)  The advisory council shall provide assistance and

28  recommendations to the Chief Financial Officer Treasurer

29  relating to the provisions of the plan, the insurance or

30  investment options to be offered under the plan, and any other

31  contracts or appointments deemed necessary by the council and

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 1  the Chief Financial Officer Treasurer to carry out the

 2  provisions of this act.  The Chief Financial Officer Treasurer

 3  shall inform the council of the manner in which each council

 4  recommendation is being addressed.  The Chief Financial

 5  Officer Treasurer shall provide the council, at least

 6  annually, a report on the status of the deferred compensation

 7  program, including, but not limited to, information on

 8  participant enrollment, amount of compensation deferred, total

 9  plan assets, product provider performance, and participant

10  satisfaction with the program.

11         (10)

12         (b)1.  There is created in the State Treasury the

13  Deferred Compensation Trust Fund, through which the Chief

14  Financial Officer Treasurer as trustee shall hold moneys,

15  pensions, annuities, or other benefits accrued or accruing

16  under and pursuant to 26 U.S.C. s. 457 and the deferred

17  compensation plan provided for therein and adopted by this

18  state; and

19         a.  All amounts of compensation deferred thereunder;

20         b.  All property and rights purchased with such

21  amounts; and

22         c.  All income attributable to such amounts, property,

23  or rights.

24         2.  Notwithstanding the mandates of 26 U.S.C. s.

25  457(b)(6), all of the assets specified in subparagraph 1.

26  shall be held in trust for the exclusive benefit of

27  participants and their beneficiaries as mandated by 26 U.S.C.

28  s. 457(g)(1).

29         (11)  With respect to any funds held pursuant to a

30  deferred compensation plan, any plan provider which is a bank

31  or savings association and which provides time deposit

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 1  accounts and certificates of deposit as an investment product

 2  to the plan participants may, with the approval of the State

 3  Board of Administration for providers in the state plan, or

 4  with the approval of the appropriate official or body

 5  designated under subsection (5) for a plan of a county,

 6  municipality, other political subdivision, or constitutional

 7  county officer, be exempt from the provisions of chapter 280

 8  requiring it to be a qualified public depository, provided:

 9         (a)  The bank or savings association shall, to the

10  extent that the time deposit accounts or certificates of

11  deposit are not insured by the Federal Deposit Insurance

12  Corporation or the Federal Savings and Loan Insurance

13  Corporation, pledge collateral with the Chief Financial

14  Officer Treasurer for all state funds held by it under a

15  deferred compensation plan, or with such other appropriate

16  official for all public funds held by it under a deferred

17  compensation plan of a county, municipality, other political

18  subdivision, or constitutional county officer, in an amount

19  which equals at least 150 percent of all uninsured deferred

20  compensation funds then held.

21         (b)  Said collateral shall be of the kind permitted by

22  s. 280.13 and shall be pledged in the manner provided for by

23  the applicable provisions of chapter 280.

24  

25  The Chief Financial Officer Treasurer shall have all the

26  applicable powers provided in ss. 280.04, 280.05, and 280.08

27  relating to the sale or other disposition of the pledged

28  collateral.

29         (12)  The Chief Financial Officer Treasurer may adopt

30  any rule necessary to administer and implement this act with

31  respect to deferred compensation plans for state employees.

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 1         Section 126.  Paragraph (h) of subsection (4) of

 2  section 112.3144, Florida Statutes, is amended to read:

 3         112.3144  Full and public disclosure of financial

 4  interests.--

 5         (4)  Forms for compliance with the full and public

 6  disclosure requirements of s. 8, Art. II of the State

 7  Constitution shall be created by the Commission on Ethics. The

 8  commission shall give notice of disclosure deadlines and

 9  delinquencies and distribute forms in the following manner:

10         (h)  Notwithstanding any provision of chapter 120, any

11  fine imposed under this subsection which is not waived by

12  final order of the commission and which remains unpaid more

13  than 60 days after the notice of payment due or more than 60

14  days after the commission renders a final order on the appeal

15  must be submitted to the Department of Financial Services

16  Banking and Finance as a claim, debt, or other obligation owed

17  to the state, and the department shall assign the collection

18  of such fine to a collection agent as provided in s. 17.20.

19         Section 127.  Paragraph (i) of subsection (6) of

20  section 112.3145, Florida Statutes, is amended to read:

21         112.3145  Disclosure of financial interests and clients

22  represented before agencies.--

23         (6)  Forms for compliance with the disclosure

24  requirements of this section and a current list of persons

25  subject to disclosure shall be created by the commission and

26  provided to each supervisor of elections. The commission and

27  each supervisor of elections shall give notice of disclosure

28  deadlines and delinquencies and distribute forms in the

29  following manner:

30         (i)  Notwithstanding any provision of chapter 120, any

31  fine imposed under this subsection which is not waived by

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 1  final order of the commission and which remains unpaid more

 2  than 60 days after the notice of payment due or more than 60

 3  days after the commission renders a final order on the appeal

 4  must be submitted to the Department of Financial Services

 5  Banking and Finance as a claim, debt, or other obligation owed

 6  to the state, and the department shall assign the collection

 7  of such a fine to a collection agent as provided in s. 17.20.

 8         Section 128.  Paragraph (c) of subsection (9) of

 9  section 112.3189, Florida Statutes, is amended to read:

10         112.3189  Investigative procedures upon receipt of

11  whistle-blower information from certain state employees.--

12         (9)

13         (c)  The Chief Inspector General shall transmit any

14  final report under this section, any comments provided by the

15  complainant, and any appropriate comments or recommendations

16  by the Chief Inspector General to the Governor, to the Joint

17  Legislative Auditing Committee, to the investigating agency,

18  and to the Chief Financial Officer Comptroller.

19         Section 129.  Paragraph (e) of subsection (3) of

20  section 112.31895, Florida Statutes, is amended to read:

21         112.31895  Investigative procedures in response to

22  prohibited personnel actions.--

23         (3)  CORRECTIVE ACTION AND TERMINATION OF

24  INVESTIGATION.--

25         (e)1.  The Florida Commission on Human Relations may

26  request an agency or circuit court to order a stay, on such

27  terms as the court requires, of any personnel action for 45

28  days if the Florida Commission on Human Relations determines

29  that reasonable grounds exist to believe that a prohibited

30  personnel action has occurred, is occurring, or is to be

31  

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 1  taken.  The Florida Commission on Human Relations may request

 2  that such stay be extended for appropriate periods of time.

 3         2.  If, in connection with any investigation, the

 4  Florida Commission on Human Relations determines that

 5  reasonable grounds exist to believe that a prohibited action

 6  has occurred, is occurring, or is to be taken which requires

 7  corrective action, the Florida Commission on Human Relations

 8  shall report the determination together with any findings or

 9  recommendations to the agency head and may report that

10  determination and those findings and recommendations to the

11  Governor and the Chief Financial Officer Comptroller. The

12  Florida Commission on Human Relations may include in the

13  report recommendations for corrective action to be taken.

14         3.  If, after 20 days, the agency does not implement

15  the recommended action, the Florida Commission on Human

16  Relations shall terminate the investigation and notify the

17  complainant of the right to appeal under subsection (4), or

18  may petition the agency for corrective action under this

19  subsection.

20         4.  If the Florida Commission on Human Relations finds,

21  in consultation with the individual subject to the prohibited

22  action, that the agency has implemented the corrective action,

23  the commission shall file such finding with the agency head,

24  together with any written comments that the individual

25  provides, and terminate the investigation.

26         Section 130.  Paragraph (f) of subsection (5) of

27  section 112.3215, Florida Statutes, is amended to read:

28         112.3215  Lobbyists before the executive branch or the

29  Constitution Revision Commission; registration and reporting;

30  investigation by commission.--

31         (5)

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 1         (f)  The commission shall provide by rule a procedure

 2  by which a lobbyist who fails to timely file a report shall be

 3  notified and assessed fines.  The rule shall provide for the

 4  following:

 5         1.  Upon determining that the report is late, the

 6  person designated to review the timeliness of reports shall

 7  immediately notify the lobbyist as to the failure to timely

 8  file the report and that a fine is being assessed for each

 9  late day. The fine shall be $50 per day per report for each

10  late day up to a maximum of $5,000 per late report.

11         2.  Upon receipt of the report, the person designated

12  to review the timeliness of reports shall determine the amount

13  of the fine due based upon the earliest of the following:

14         a.  When a report is actually received by the lobbyist

15  registration and reporting office.

16         b.  When the report is postmarked.

17         c.  When the certificate of mailing is dated.

18         d.  When the receipt from an established courier

19  company is dated.

20         3.  Such fine shall be paid within 30 days after the

21  notice of payment due is transmitted by the Lobbyist

22  Registration Office, unless appeal is made to the commission.

23  The moneys shall be deposited into the Executive Branch Lobby

24  Registration Trust Fund.

25         4.  A fine shall not be assessed against a lobbyist the

26  first time any reports for which the lobbyist is responsible

27  are not timely filed. However, to receive the one-time fine

28  waiver, all reports for which the lobbyist is responsible must

29  be filed within 30 days after the notice that any reports have

30  not been timely filed is transmitted by the Lobbyist

31  

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 1  Registration Office. A fine shall be assessed for any

 2  subsequent late-filed reports.

 3         5.  Any lobbyist may appeal or dispute a fine, based

 4  upon unusual circumstances surrounding the failure to file on

 5  the designated due date, and may request and shall be entitled

 6  to a hearing before the commission, which shall have the

 7  authority to waive the fine in whole or in part for good cause

 8  shown.  Any such request shall be made within 30 days after

 9  the notice of payment due is transmitted by the Lobbyist

10  Registration Office.  In such case, the lobbyist shall, within

11  the 30-day period, notify the person designated to review the

12  timeliness of reports in writing of his or her intention to

13  bring the matter before the commission.

14         6.  The person designated to review the timeliness of

15  reports shall notify the commission of the failure of a

16  lobbyist to file a report after notice or of the failure of a

17  lobbyist to pay the fine imposed.

18         7.  Notwithstanding any provision of chapter 120, any

19  fine imposed under this subsection that is not waived by final

20  order of the commission and that remains unpaid more than 60

21  days after the notice of payment due or more than 60 days

22  after the commission renders a final order on the lobbyist's

23  appeal shall be collected by the Department of Financial

24  Services Banking and Finance as a claim, debt, or other

25  obligation owed to the state, and the department may assign

26  the collection of such fine to a collection agent as provided

27  in s. 17.20.

28         Section 131.  Subsection (4) of section 112.63, Florida

29  Statutes, is amended to read:

30         112.63  Actuarial reports and statements of actuarial

31  impact; review.--

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 1         (4)  Upon receipt, pursuant to subsection (2), of an

 2  actuarial report, or upon receipt, pursuant to subsection (3),

 3  of a statement of actuarial impact, the Department of

 4  Management Services shall acknowledge such receipt, but shall

 5  only review and comment on each retirement system's or plan's

 6  actuarial valuations at least on a triennial basis.  If the

 7  department finds that the actuarial valuation is not complete,

 8  accurate, or based on reasonable assumptions, or if the

 9  department does not receive the actuarial report or statement

10  of actuarial impact, the department shall notify the local

11  government and request appropriate adjustment. If, after a

12  reasonable period of time, a satisfactory adjustment is not

13  made, the affected local government or the department may

14  petition for a hearing under the provisions of ss. 120.569 and

15  120.57. If the administrative law judge recommends in favor of

16  the department, the department shall perform an actuarial

17  review or prepare the statement of actuarial impact. The cost

18  to the department of performing such actuarial review or

19  preparing such statement shall be charged to the governmental

20  entity of which the employees are covered by the retirement

21  system or plan.  If payment of such costs is not received by

22  the department within 60 days after receipt by the

23  governmental entity of the request for payment, the department

24  shall certify to the Chief Financial Officer Comptroller the

25  amount due, and the Chief Financial Officer Comptroller shall

26  pay such amount to the department from any funds payable to

27  the governmental entity of which the employees are covered by

28  the retirement system or plan.  If the administrative law

29  judge recommends in favor of the local retirement system and

30  the department performs an actuarial review, the cost to the

31  

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 1  department of performing the actuarial review shall be paid by

 2  the department.

 3         Section 132.  Section 116.03, Florida Statutes, is

 4  amended to read:

 5         116.03  Officers to report fees collected.--Each state

 6  and county officer who receives all or any part of his or her

 7  compensation in fees or commissions, or other remuneration,

 8  shall keep a complete report of all fees and commissions, or

 9  other remuneration collected, and shall make a report to the

10  Department of Financial Services Banking and Finance of all

11  such fees and commissions, or other remuneration, annually on

12  December 31 of each and every year.  Such report shall be made

13  upon forms to be prescribed from time to time by the

14  department, and shall show in detail the source, character and

15  amount of all his or her official expenses and the net amount

16  that the office has paid up to the time of making such report.

17  All officers shall make out, fill in and subscribe and

18  properly forward to the department such reports, and swear to

19  the accuracy and competency of such reports.

20         Section 133.  Section 116.04, Florida Statutes, is

21  amended to read:

22         116.04  Failure of officer to make sworn report of

23  fees.--Any officer who shall fail or refuse to make,

24  subscribe, and swear, or to file with the Department of

25  Financial Services Banking and Finance a report of all fees,

26  commissions, or other remuneration collected, as required by

27  law, or if any officer shall knowingly or willfully make false

28  or incomplete reports, or in any report violate any of the

29  provisions of s. 116.03 he or she shall be guilty of a

30  misdemeanor of the first degree, punishable as provided in  s.

31  775.082 or s. 775.083.

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 1         Section 134.  Section 116.05, Florida Statutes, is

 2  amended to read:

 3         116.05  Examination and publication by Department of

 4  Financial Services Banking and Finance.--The Department of

 5  Financial Services Banking and Finance shall have examined and

 6  verified any of the reports received under s. 116.03 whenever

 7  in its judgment the same may be necessary, and the department

 8  shall cause the matter and things in each of said reports to

 9  be published one time in a newspaper published in the county

10  in which such report originated, in such form as it shall

11  direct, and the expense of such publication shall be paid by

12  the county commissioners of such county.

13         Section 135.  Section 116.06, Florida Statutes, is

14  amended to read:

15         116.06  Summary of reports; certain officers not

16  required to report fees.--A summary of all such reports shall

17  be included by the Department of Financial Services Banking

18  and Finance in its annual report to the Governor, except that

19  jurors and notaries public shall not be required to make such

20  reports as provided for in s. 116.03.

21         Section 136.  Section 116.14, Florida Statutes, is

22  amended to read:

23         116.14  Receipts required from purchasers of state

24  property.--Upon the sale of any state property by the

25  superintendent and presidents of state institutions as

26  provided by law, they shall take receipt for the same from the

27  purchaser, which receipt shall be forwarded, together with the

28  proceeds of the sale, to the Chief Financial Officer State

29  Treasurer.

30         Section 137.  Paragraph (c) of subsection (15) of

31  section 120.52, Florida Statutes, is amended to read:

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 1         120.52  Definitions.--As used in this act:

 2         (15)  "Rule" means each agency statement of general

 3  applicability that implements, interprets, or prescribes law

 4  or policy or describes the procedure or practice requirements

 5  of an agency and includes any form which imposes any

 6  requirement or solicits any information not specifically

 7  required by statute or by an existing rule.  The term also

 8  includes the amendment or repeal of a rule.  The term does not

 9  include:

10         (c)  The preparation or modification of:

11         1.  Agency budgets.

12         2.  Statements, memoranda, or instructions to state

13  agencies issued by the Chief Financial Officer or Comptroller

14  as chief fiscal officer of the state and relating or

15  pertaining to claims for payment submitted by state agencies

16  to the Chief Financial Officer or Comptroller.

17         3.  Contractual provisions reached as a result of

18  collective bargaining.

19         4.  Memoranda issued by the Executive Office of the

20  Governor relating to information resources management.

21         Section 138.  Subsections (3) and (9) of section

22  120.80, Florida Statutes, are amended to read:

23         120.80  Exceptions and special requirements;

24  agencies.--

25         (3)  OFFICE OF FINANCIAL INSTITUTIONS AND SECURITIES

26  REGULATION DEPARTMENT OF BANKING AND FINANCE.--

27         (a)  Notwithstanding s. 120.60(1), in proceedings for

28  the issuance, denial, renewal, or amendment of a license or

29  approval of a merger pursuant to title XXXVIII:

30         1.a.  The Office of Financial Institutions and

31  Securities Regulation of the Financial Services Commission

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 1  Department of Banking and Finance shall have published in the

 2  Florida Administrative Weekly notice of the application within

 3  21 days after receipt.

 4         b.  Within 21 days after publication of notice, any

 5  person may request a hearing. Failure to request a hearing

 6  within 21 days after notice constitutes a waiver of any right

 7  to a hearing. The Office of Financial Institutions and

 8  Securities Regulation Department of Banking and Finance or an

 9  applicant may request a hearing at any time prior to the

10  issuance of a final order. Hearings shall be conducted

11  pursuant to ss. 120.569 and 120.57, except that the Financial

12  Services Commission Department of Banking and Finance shall by

13  rule provide for participation by the general public.

14         2.  Should a hearing be requested as provided by

15  sub-subparagraph 1.b., the applicant or licensee shall publish

16  at its own cost a notice of the hearing in a newspaper of

17  general circulation in the area affected by the application.

18  The Financial Services Commission Department of Banking and

19  Finance may by rule specify the format and size of the notice.

20         3.  Notwithstanding s. 120.60(1), and except as

21  provided in subparagraph 4., every application for license for

22  a new bank, new trust company, new credit union, or new

23  savings and loan association shall be approved or denied

24  within 180 days after receipt of the original application or

25  receipt of the timely requested additional information or

26  correction of errors or omissions. Any application for such a

27  license or for acquisition of such control which is not

28  approved or denied within the 180-day period or within 30 days

29  after conclusion of a public hearing on the application,

30  whichever is later, shall be deemed approved subject to the

31  satisfactory completion of conditions required by statute as a

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 1  prerequisite to license and approval of insurance of accounts

 2  for a new bank, a new savings and loan association, or a new

 3  credit union by the appropriate insurer.

 4         4.  In the case of every application for license to

 5  establish a new bank, trust company, or capital stock savings

 6  association in which a foreign national proposes to own or

 7  control 10 percent or more of any class of voting securities,

 8  and in the case of every application by a foreign national for

 9  approval to acquire control of a bank, trust company, or

10  capital stock savings association, the Office of Financial

11  Institutions and Securities Regulation Department of Banking

12  and Finance shall request that a public hearing be conducted

13  pursuant to ss. 120.569 and 120.57. Notice of such hearing

14  shall be published by the applicant as provided in

15  subparagraph 2. The failure of any such foreign national to

16  appear personally at the hearing shall be grounds for denial

17  of the application. Notwithstanding the provisions of s.

18  120.60(1) and subparagraph 3., every application involving a

19  foreign national shall be approved or denied within 1 year

20  after receipt of the original application or any timely

21  requested additional information or the correction of any

22  errors or omissions, or within 30 days after the conclusion of

23  the public hearing on the application, whichever is later.

24         (b)  In any application for a license or merger

25  pursuant to title XXXVIII which is referred by the agency to

26  the division for hearing, the administrative law judge shall

27  complete and submit to the agency and to all parties a written

28  report consisting of findings of fact and rulings on

29  evidentiary matters. The agency shall allow each party at

30  least 10 days in which to submit written exceptions to the

31  report.

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 1         (9)  OFFICE OF INSURANCE REGULATION DEPARTMENT OF

 2  INSURANCE.--Notwithstanding s. 120.60(1), every application

 3  for a certificate of authority as required by s. 624.401 shall

 4  be approved or denied within 180 days after receipt of the

 5  original application. Any application for a certificate of

 6  authority which is not approved or denied within the 180-day

 7  period, or within 30 days after conclusion of a public hearing

 8  held on the application, shall be deemed approved, subject to

 9  the satisfactory completion of conditions required by statute

10  as a prerequisite to licensure.

11         Section 139.  Subsection (8) of section 121.051,

12  Florida Statutes, is amended to read:

13         121.051  Participation in the system.--

14         (8)  DIVISION OF REHABILITATION AND LIQUIDATION

15  EMPLOYEES MEMBERSHIP.--Effective July 1, 1994, the regular

16  receivership employees of the Division of Rehabilitation and

17  Liquidation of the Department of Financial Services who are

18  assigned to established positions and are subject to

19  established rules and regulations regarding discipline, pay,

20  classification, and time and attendance are hereby declared to

21  be state employees within the meaning of this chapter and

22  shall be compulsory members in compliance with this chapter,

23  the provisions of s. 216.011(1)(dd)2., notwithstanding.

24  Employment performed before July 1, 1994, as such a

25  receivership employee may be claimed as creditable retirement

26  service upon payment by the employee or employer of

27  contributions required in s. 121.081(1), as applicable for the

28  period claimed.

29         Section 140.  Paragraph (e) of subsection (1) of

30  section 121.055, Florida Statutes, is amended to read:

31  

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 1         121.055  Senior Management Service Class.--There is

 2  hereby established a separate class of membership within the

 3  Florida Retirement System to be known as the "Senior

 4  Management Service Class," which shall become effective

 5  February 1, 1987.

 6         (1)

 7         (e)  Effective January 1, 1991, participation in the

 8  Senior Management Service Class shall be compulsory for the

 9  number of senior managers who have policymaking authority with

10  the State Board of Administration, as determined by the

11  Governor, Chief Financial Officer Treasurer, and Attorney

12  General Comptroller acting as the State Board of

13  Administration, unless such member elects to participate in

14  the Senior Management Service Optional Annuity Program as

15  established in subsection (6) in lieu of participation in the

16  Senior Management Service Class. Such election shall be made

17  in writing and filed with the division and the personnel

18  officer of the State Board of Administration within 90 days

19  after becoming eligible for membership in the Senior

20  Management Service Class.

21         Section 141.  Paragraph (a) of subsection (2) of

22  section 121.061, Florida Statutes, is amended to read:

23         121.061  Funding.--

24         (2)(a)  Should any employer other than a state employer

25  fail to make the retirement and social security contributions,

26  both member and employer contributions, required by this

27  chapter, then, upon request by the administrator, the

28  Department of Revenue or the Department of Financial Services

29  Banking and Finance, as the case may be, shall deduct the

30  amount owed by the employer from any funds to be distributed

31  by it to the county, city, special district, or consolidated

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 1  form of government.  The amounts so deducted shall be

 2  transferred to the administrator for further distribution to

 3  the trust funds in accordance with this chapter.

 4         Section 142.  Section 121.133, Florida Statutes, is

 5  amended to read:

 6         121.133  Cancellation of uncashed

 7  warrants.--Notwithstanding the provisions of s. 17.26 or s.

 8  717.123 to the contrary, effective July 1, 1998, if any state

 9  warrant issued by the Chief Financial Officer Comptroller for

10  the payment of retirement benefits from the Florida Retirement

11  System Trust Fund, or any other pension trust fund

12  administered by the department, is not presented for payment

13  within 1 year after the last day of the month in which it was

14  originally issued, the Chief Financial Officer Comptroller

15  shall cancel the benefit warrant and credit the amount of the

16  warrant to the Florida Retirement System Trust Fund or other

17  pension trust fund administered by the department, as

18  appropriate. The department may provide for issuance of a

19  replacement warrant when deemed appropriate.

20         Section 143.  Paragraph (b) of subsection (4) of

21  section 122.35, Florida Statutes, is amended to read:

22         122.35  Funding.--

23         (4)  Effective October 1, 1967, the proceeds of the

24  intangible tax collections of the state remaining after the

25  payment of administrative expenses, commissions which are

26  applicable, and other costs incident to its collection shall

27  be set aside into an account designated as account B of the

28  Intangible Tax Trust Fund, which account shall also receive

29  all of the matching payments for retirement and social

30  security remitted by each officer or board as provided in

31  subsection (1).  The amounts received and deposited into

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 1  account B of the Intangible Tax Trust Fund are appropriated

 2  and shall be used for the following purposes and paid out on

 3  the priority basis as shown below:

 4         (b)  After the retirement and social security

 5  contributions of all members have been matched as provided in

 6  paragraph (a), the balance remaining in account B of the

 7  Intangible Tax Trust Fund shall be distributed as follows:

 8         1.  Each county shall receive each fiscal year ending

 9  June 30 an allocation in an amount equal to 55 percent of the

10  total net intangible taxes collected and remitted to the

11  Department of Revenue by the tax collector of the county

12  during the prior fiscal year.

13         a.  Commencing October 1, 1967, and every October 1

14  thereafter and continuing on the first day of each subsequent

15  month through June 30 of each fiscal year each board of county

16  commissions of the several counties of the state shall receive

17  an allocation from account B of the Intangible Tax Trust Fund.

18  This allocation shall not include the school boards of the

19  several counties of the state.  The amount of said monthly

20  allocation shall be equal to the average amount required to be

21  matched by the Intangible Tax Trust Fund for the corresponding

22  months during the 1966-1967 fiscal year as computed by the

23  Chief Financial Officer Comptroller, or one-twelfth of the

24  Chief Financial Officer's Comptroller's estimate of the

25  county's allocation, whichever is smaller, and an adjustment

26  to reconcile the monthly allocations with the actual amount to

27  be received pursuant to this subparagraph, shall be made not

28  later than 60 days after the end of the fiscal year.

29         b.  Each county, county agency and school board shall

30  pay all matching cost for retirement and social security as

31  

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 1  required by this act and s. 238.11(1), notwithstanding the

 2  provisions of any other law.

 3         2.  The balance remaining in account B of the

 4  Intangible Tax Trust Fund after the retirement and social

 5  security contributions have been matched and the allocations

 6  to each county have been paid as provided in this act, shall

 7  be paid over to the General Revenue Fund of the state.

 8         Section 144.  Paragraphs (a) and (b) of subsection (11)

 9  of section 125.0104, Florida Statutes, are amended to read:

10         125.0104  Tourist development tax; procedure for

11  levying; authorized uses; referendum; enforcement.--

12         (11)  INTEREST PAID ON DISTRIBUTIONS.--

13         (a)  Interest shall be paid on undistributed taxes

14  collected and remitted to the Department of Revenue under this

15  section.  Such interest shall be included along with the tax

16  proceeds distributed to the counties and shall be paid from

17  moneys transferred from the General Revenue Fund.  The

18  department shall calculate the interest for net tax

19  distributions using the average daily rate that was earned by

20  the State Treasury for the preceding calendar quarter and paid

21  to the General Revenue Fund.  This rate shall be certified by

22  the Chief Financial Officer Treasurer to the department by the

23  20th day following the close of each quarter.

24         (b)  The interest applicable to taxes collected under

25  this section shall be calculated by multiplying the tax

26  amounts to be distributed times the daily rate times the

27  number of days after the third working day following the date

28  the tax is due and payable pursuant to s. 212.11 until the

29  date the department issues a voucher to request the Chief

30  Financial Officer Comptroller to issue the payment warrant.

31  The warrant shall be issued within 7 days after the request.

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 1         Section 145.  Paragraph (b) of subsection (2) of

 2  section 129.201, Florida Statutes, is amended to read:

 3         129.201  Budget of supervisor of elections; manner and

 4  time of preparation and presentation.--

 5         (2)

 6         (b)  To the extent appropriate, the budget shall be

 7  further itemized in conformance with the Uniform Accounting

 8  System for Local Units of Government in Florida adopted

 9  promulgated by rule of the Chief Financial Officer Comptroller

10  of the state.

11         Section 146.  Section 131.05, Florida Statutes, is

12  amended to read:

13         131.05  Disposition of proceeds of sale.--In the event

14  refunding bonds are issued under the provisions of this

15  chapter prior to the date of maturity or option date of the

16  obligations proposed to be refunded, the proceeds of said

17  refunding bonds shall be deposited in a bank or trust company

18  within the state, which depository shall give a surety bond,

19  or other such bonds as are authorized by law to be accepted

20  for securing county and city funds, satisfactory to the

21  Department of Financial Services Banking and Finance for the

22  full amount of money so deposited, and the funds so deposited

23  shall only be withdrawn with the approval of the department,

24  for the purpose of paying the obligations to refund which said

25  bonds were issued.

26         Section 147.  Section 137.09, Florida Statutes, is

27  amended to read:

28         137.09  Justification and approval of bonds.--Each

29  surety upon every bond of any county officer shall make

30  affidavit that he or she is a resident of the county for which

31  the officer is to be commissioned, and that he or she has

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 1  sufficient visible property therein unencumbered and not

 2  exempt from sale under legal process to make good his or her

 3  bond.  Every such bond shall be approved by the board of

 4  county commissioners and by the Department of Financial

 5  Services Banking and Finance when they and it are satisfied in

 6  their judgment that the same is legal, sufficient, and proper

 7  to be approved.

 8         Section 148.  Section 145.141, Florida Statutes, is

 9  amended to read:

10         145.141  Deficiency to be paid by board of county

11  commissioners.--Should any county officer have insufficient

12  revenue from the income of his or her office, after paying

13  office personnel and expenses, to pay his or her total annual

14  salary, the board of county commissioners shall pay any

15  deficiency in salary from the general revenue fund and notify

16  the Department of Financial Services Banking and Finance.  The

17  deficiency shall be listed in the comptroller's annual report

18  of county finances and county fee officers.

19         Section 149.  Subsections (1) and (2) of section

20  154.02, Florida Statutes, are amended to read:

21         154.02  County Health Department Trust Fund.--

22         (1)  To enable counties to provide public health

23  services and maintain public health equipment and facilities,

24  each county in the state with a population exceeding 100,000,

25  according to the last state census, may levy an annual tax not

26  exceeding 0.5 mill; each county in the state with a population

27  exceeding 40,000 and not exceeding 100,000, according to the

28  last state census, may levy an annual tax not exceeding 1

29  mill; and each county in the state with a population not

30  exceeding 40,000, according to the last state census, may levy

31  an annual tax not exceeding 2 mills, on the dollar on all

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 1  taxable property in such county, the proceeds of which tax, if

 2  so contracted with the state, shall be paid to the Chief

 3  Financial Officer Treasurer. However, the board of county

 4  commissioners may elect to pay in 12 equal monthly

 5  installments. Such funds in the hands of the Chief Financial

 6  Officer Treasurer shall be placed in the county health

 7  department trust funds of the county by which such funds were

 8  raised, and such funds shall be expended by the Department of

 9  Health solely for the purpose of carrying out the intent and

10  object of the public health contract.

11         (2)  The Chief Financial Officer Treasurer shall

12  maintain a full-time County Health Department Trust Fund which

13  shall contain all state and local funds to be expended by

14  county health departments.  Such funds shall be expended by

15  the Department of Health solely for the purposes of carrying

16  out the intent and purpose of this part. Federal funds may be

17  deposited in the trust fund.

18         Section 150.  Subsection (1) of section 154.03, Florida

19  Statutes, is amended to read:

20         154.03  Cooperation with Department of Health and

21  United States Government.--

22         (1)  The county commissioners of any county may agree

23  with the Department of Health upon the expenditure by the

24  department in such county of any funds allotted for that

25  purpose by the department or received by it for such purposes

26  from private contributions or other sources, and such funds

27  shall be paid to the Chief Financial Officer Treasurer and

28  shall form a part of the full-time county health department

29  trust fund of such county; and such funds shall be expended by

30  the department solely for the purposes of this chapter.  The

31  department is further authorized to arrange and agree with the

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 1  United States Government, through its duly authorized

 2  officials, for the allocation and expenditure by the United

 3  States of funds of the United States in the study of causes of

 4  disease and prevention thereof in such full-time county health

 5  departments when and where established by the department under

 6  this part.

 7         Section 151.  Section 154.05, Florida Statutes, is

 8  amended to read:

 9         154.05  Cooperation and agreements between

10  counties.--Two or more counties may combine in the

11  establishment and maintenance of a single full-time county

12  health department for the counties which combine for that

13  purpose; and, pursuant to such combination or agreement, such

14  counties may cooperate with one another and the Department of

15  Health and contribute to a joint fund in carrying out the

16  purpose and intent of this chapter.  The duration and nature

17  of such agreement shall be evidenced by resolutions of the

18  boards of county commissioners of such counties and shall be

19  submitted to and approved by the department.  In the event of

20  any such agreement, a full-time county health department shall

21  be established and maintained by the department in and for the

22  benefit of the counties which have entered into such an

23  agreement; and, in such case, the funds raised by taxation

24  pursuant to this chapter by each such county shall be paid to

25  the Chief Financial Officer Treasurer for the account of the

26  department and shall be known as the full-time county health

27  department trust fund of the counties so cooperating. Such

28  trust funds shall be used and expended by the department for

29  the purposes specified in this chapter in each county which

30  has entered into such agreement.  In case such an agreement is

31  entered into between two or more counties, the work

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 1  contemplated by this chapter shall be done by a single

 2  full-time county health department in the counties so

 3  cooperating; and the nature, extent, and location of such work

 4  shall be under the control and direction of the department.

 5         Section 152.  Subsection (2) of section 154.06, Florida

 6  Statutes, is amended to read:

 7         154.06  Fees and services rendered; authority.--

 8         (2)  All funds collected under this section shall be

 9  expended solely for the purpose of providing health services

10  and facilities within the county served by the county health

11  department. Fees collected by county health departments

12  pursuant to department rules shall be deposited with the Chief

13  Financial Officer Treasurer and credited to the County Health

14  Department Trust Fund. Fees collected by the county health

15  department for public health services or personal health

16  services shall be allocated to the state and the county based

17  upon the pro rata share of funding for each such service. The

18  board of county commissioners, if it has so contracted, shall

19  provide for the transmittal of funds collected for its pro

20  rata share of personal health services or primary care

21  services rendered under the provisions of this section to the

22  State Treasury for credit to the County Health Department

23  Trust Fund, but in any event the proceeds from such fees may

24  only be used to fund county health department services.

25         Section 153.  Paragraphs (d) and (e) of subsection (17)

26  of section 154.209, Florida Statutes, are amended to read:

27         154.209  Powers of authority.--The purpose of the

28  authority shall be to assist health facilities in the

29  acquisition, construction, financing, and refinancing of

30  projects in any corporated or unincorporated area within the

31  

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 1  geographical limits of the local agency.  For this purpose,

 2  the authority is authorized and empowered:

 3         (17)  To issue special obligation revenue bonds for the

 4  purpose of establishing and maintaining the self-insurance

 5  pool and to provide reserve funds in connection therewith,

 6  such bonds to be payable from funds available in the pool from

 7  time to time or from assessments against participating health

 8  facilities for the purpose of providing required contributions

 9  to the fund. With respect to the issuance of such bonds or

10  notes the following provisions shall apply:

11         (d)  Any self-insurance pool funded pursuant to this

12  section shall maintain excess insurance which provides

13  specific and aggregate limits and a retention level determined

14  in accordance with sound actuarial principles. The Office of

15  Insurance Regulation of the Financial Services Commission

16  Department of Insurance may waive this requirement if the fund

17  demonstrates that its operation is and will be actuarially

18  sound without obtaining excess insurance.

19         (e)  Prior to the issuance of any bonds pursuant to

20  this section for the purpose of acquiring liability coverage

21  contracts from the self-insurance pool, the Office of

22  Insurance Regulation Department of Insurance shall certify

23  that excess liability coverage for the health facility is

24  reasonably unobtainable in the amounts provided by such pool

25  or that the liability coverage obtained through acquiring

26  contracts from the self-insurance pool, after taking into

27  account costs of issuance of bonds and any other

28  administrative fees, is less expensive to the health facility

29  than similar commercial coverage then reasonably available.

30         Section 154.  Section 154.314, Florida Statutes, is

31  amended to read:

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 1         154.314  Certification of the State of Florida.--

 2         (1)  In the event payment for the costs of services

 3  rendered by a participating hospital or a regional referral

 4  hospital is not received from the responsible county within 90

 5  days of receipt of a statement for services rendered to a

 6  qualified indigent who is a certified resident of the county,

 7  or if the payment is disputed and said payment is not received

 8  from the county determined to be responsible within 60 days of

 9  the date of exhaustion of all administrative and legal

10  remedies, the hospital shall certify to the Chief Financial

11  Officer Comptroller the amount owed by the county.

12         (2)  The Chief Financial Officer Comptroller shall have

13  no longer than 45 days from the date of receiving the

14  hospital's certified notice to forward the amount delinquent

15  to the appropriate hospital from any funds due to the county

16  under any revenue-sharing or tax-sharing fund established by

17  the state, except as otherwise provided by the State

18  Constitution.  The Chief Financial Officer Comptroller shall

19  provide the Governor and the fiscal committees in the House of

20  Representatives and the Senate with a quarterly accounting of

21  the amounts certified by hospitals as owed by counties and the

22  amount paid to hospitals out of any revenue or tax sharing

23  funds due to the county.

24         Section 155.  Paragraph (e) of subsection (7) of

25  section 163.01, Florida Statutes, is amended to read:

26         163.01  Florida Interlocal Cooperation Act of 1969.--

27         (7)

28         (e)1.  Notwithstanding the provisions of paragraph (c),

29  any separate legal entity, created pursuant to the provisions

30  of this section and controlled by counties or municipalities

31  of this state, the membership of which consists or is to

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 1  consist only of public agencies of this state, may, for the

 2  purpose of financing acquisition of liability coverage

 3  contracts from one or more local government liability pools to

 4  provide liability coverage for counties, municipalities, or

 5  other public agencies of this state, exercise all powers in

 6  connection with the authorization, issuance, and sale of

 7  bonds. All of the privileges, benefits, powers, and terms of

 8  s. 125.01 relating to counties and s. 166.021 relating to

 9  municipalities shall be fully applicable to such entity and

10  such entity shall be considered a unit of local government for

11  all of the privileges, benefits, powers, and terms of part I

12  of chapter 159.  Bonds issued by such entity shall be deemed

13  issued on behalf of counties, municipalities, or public

14  agencies which enter into loan agreements with such entity as

15  provided in this paragraph. Proceeds of bonds issued by such

16  entity may be loaned to counties, municipalities, or other

17  public agencies of this state, whether or not such counties,

18  municipalities, or other public agencies are also members of

19  the entity issuing the bonds, and such counties,

20  municipalities, or other public agencies may in turn deposit

21  such loan proceeds with a separate local government liability

22  pool for purposes of acquiring liability coverage contracts.

23         2.  Counties or municipalities of this state are

24  authorized pursuant to this section, in addition to the

25  authority provided by s. 125.01, part II of chapter 166, and

26  other applicable law, to issue bonds for the purpose of

27  acquiring liability coverage contracts from a local government

28  liability pool. Any individual county or municipality may, by

29  entering into interlocal agreements with other counties,

30  municipalities, or public agencies of this state, issue bonds

31  on behalf of itself and other counties, municipalities, or

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 1  other public agencies, for purposes of acquiring a liability

 2  coverage contract or contracts from a local government

 3  liability pool.  Counties, municipalities, or other public

 4  agencies are also authorized to enter into loan agreements

 5  with any entity created pursuant to subparagraph 1., or with

 6  any county or municipality issuing bonds pursuant to this

 7  subparagraph, for the purpose of obtaining bond proceeds with

 8  which to acquire liability coverage contracts from a local

 9  government liability pool.  No county, municipality, or other

10  public agency shall at any time have more than one loan

11  agreement outstanding for the purpose of obtaining bond

12  proceeds with which to acquire liability coverage contracts

13  from a local government liability pool. Obligations of any

14  county, municipality, or other public agency of this state

15  pursuant to a loan agreement as described above may be

16  validated as provided in chapter 75.  Prior to the issuance of

17  any bonds pursuant to subparagraph 1. or this subparagraph for

18  the purpose of acquiring liability coverage contracts from a

19  local government liability pool, the reciprocal insurer or the

20  manager of any self-insurance program shall demonstrate to the

21  satisfaction of the Office of Insurance Regulation of the

22  Financial Services Commission Department of Insurance that

23  excess liability coverage for counties, municipalities, or

24  other public agencies is reasonably unobtainable in the

25  amounts provided by such pool or that the liability coverage

26  obtained through acquiring contracts from a local government

27  liability pool, after taking into account costs of issuance of

28  bonds and any other administrative fees, is less expensive to

29  counties, municipalities, or special districts than similar

30  commercial coverage then reasonably available.

31  

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 1         3.  Any entity created pursuant to this section or any

 2  county or municipality may also issue bond anticipation notes,

 3  as provided by s. 215.431, in connection with the

 4  authorization, issuance, and sale of such bonds.  In addition,

 5  the governing body of such legal entity or the governing body

 6  of such county or municipality may also authorize bonds to be

 7  issued and sold from time to time and may delegate, to such

 8  officer, official, or agent of such legal entity as the

 9  governing body of such legal entity may select, the power to

10  determine the time; manner of sale, public or private;

11  maturities; rate or rates of interest, which may be fixed or

12  may vary at such time or times and in accordance with a

13  specified formula or method of determination; and other terms

14  and conditions as may be deemed appropriate by the officer,

15  official, or agent so designated by the governing body of such

16  legal entity. However, the amounts and maturities of such

17  bonds and the interest rate or rates of such bonds shall be

18  within the limits prescribed by the governing body of such

19  legal entity and its resolution delegating to such officer,

20  official, or agent the power to authorize the issuance and

21  sale of such bonds.  Any series of bonds issued pursuant to

22  this paragraph shall mature no later than 7 years following

23  the date of issuance thereof.

24         4.  Bonds issued pursuant to subparagraph 1. may be

25  validated as provided in chapter 75.  The complaint in any

26  action to validate such bonds shall be filed only in the

27  Circuit Court for Leon County.  The notice required to be

28  published by s. 75.06 shall be published in Leon County and in

29  each county which is an owner of the entity issuing the bonds,

30  or in which a member of the entity is located, and the

31  complaint and order of the circuit court shall be served only

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 1  on the State Attorney of the Second Judicial Circuit and on

 2  the state attorney of each circuit in each county or

 3  municipality which is an owner of the entity issuing the bonds

 4  or in which a member of the entity is located.

 5         5.  Bonds issued pursuant to subparagraph 2. may be

 6  validated as provided in chapter 75. The complaint in any

 7  action to validate such bonds shall be filed in the circuit

 8  court of the county or municipality which will issue the

 9  bonds.  The notice required to be published by s. 75.06 shall

10  be published only in the county where the complaint is filed,

11  and the complaint and order of the circuit court shall be

12  served only on the state attorney of the circuit in the county

13  or municipality which will issue the bonds.

14         6.  The participation by any county, municipality, or

15  other public agency of this state in a local government

16  liability pool shall not be deemed a waiver of immunity to the

17  extent of liability coverage, nor shall any contract entered

18  regarding such a local government liability pool be required

19  to contain any provision for waiver.

20         Section 156.  Subsections (4), (5), (6), (7), (8), and

21  (9) of section 163.055, Florida Statutes, are amended to read:

22         163.055  Local Government Financial Technical

23  Assistance Program.--

24         (4)  The Chief Financial Officer Comptroller shall

25  enter into contracts with program providers who shall:

26         (a)  Be a public agency or private, nonprofit

27  corporation, association, or entity.

28         (b)  Use existing resources, services, and information

29  that are available from state or local agencies, universities,

30  or the private sector.

31  

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 1         (c)  Seek and accept funding from any public or private

 2  source.

 3         (d)  Annually submit information to assist the

 4  Legislative Committee on Intergovernmental Relations in

 5  preparing a performance review that will include an analysis

 6  of the effectiveness of the program.

 7         (e)  Assist municipalities and independent special

 8  districts in developing alternative revenue sources.

 9         (f)  Provide for an annual independent financial audit

10  of the program, if the program receives funding.

11         (g)  Provide assistance to municipalities and special

12  districts in the areas of financial management, accounting,

13  investing, budgeting, and debt issuance.

14         (h)  Develop a needs assessment to determine where

15  assistance should be targeted, and to establish a priority

16  system to deliver assistance to those jurisdictions most in

17  need through the most economical means available.

18         (i)  Provide financial emergency assistance upon

19  direction from the Executive Office of the Governor pursuant

20  to s. 218.503.

21         (5)(a)  The Chief Financial Officer Comptroller shall

22  issue a request for proposals to provide assistance to

23  municipalities and special districts.  At the request of the

24  Chief Financial Officer Comptroller, the Legislative Committee

25  on Intergovernmental Relations shall assist in the preparation

26  of the request for proposals.

27         (b)  The Chief Financial Officer Comptroller shall

28  review each contract proposal submitted.

29         (c)  The Legislative Committee on Intergovernmental

30  Relations shall review each contract proposal and submit to

31  the Chief Financial Officer Comptroller, in writing, advisory

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 1  comments and recommendations, citing with specificity the

 2  reasons for its recommendations.

 3         (d)  The Chief Financial Officer Comptroller and the

 4  Legislative Committee on Intergovernmental Relations shall

 5  consider the following factors in reviewing contract

 6  proposals:

 7         1.  The demonstrated capacity of the provider to

 8  conduct needs assessments and implement the program as

 9  proposed.

10         2.  The number of municipalities and special districts

11  to be served under the proposal.

12         3.  The cost of the program as specified in a proposed

13  budget.

14         4.  The short-term and long-term benefits of the

15  assistance to municipalities and special districts.

16         5.  The form and extent to which existing resources,

17  services, and information that are available from state and

18  local agencies, universities, and the private sector will be

19  used by the provider under the contract.

20         (6)  A decision of the Chief Financial Officer

21  Comptroller to award a contract under this section is final

22  and shall be in writing with a copy provided to the

23  Legislative Committee on Intergovernmental Relations.

24         (7)  The Chief Financial Officer Comptroller may enter

25  into contracts and agreements with other state and local

26  agencies and with any person, association, corporation, or

27  entity other than the program providers, for the purpose of

28  administering this section.

29         (8)  The Chief Financial Officer Comptroller shall

30  provide fiscal oversight to ensure that funds expended for the

31  

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 1  program are used in accordance with the contracts entered into

 2  pursuant to subsection (4).

 3         (9)  The Legislative Committee on Intergovernmental

 4  Relations shall annually conduct a performance review of the

 5  program.  The findings of the review shall be presented in a

 6  report submitted to the Governor, the President of the Senate,

 7  the Speaker of the House of Representatives, and the Chief

 8  Financial Officer Comptroller by January 15 of each year.

 9         Section 157.  Subsection (6) of section 163.3167,

10  Florida Statutes, is amended to read:

11         163.3167  Scope of act.--

12         (6)  When a regional planning agency is required to

13  prepare or amend a comprehensive plan, or element or portion

14  thereof, pursuant to subsections (3) and (4), the regional

15  planning agency and the local government may agree to a method

16  of compensating the regional planning agency for any

17  verifiable, direct costs incurred.  If an agreement is not

18  reached within 6 months after the date the regional planning

19  agency assumes planning responsibilities for the local

20  government pursuant to subsections (3) and (4) or by the time

21  the plan or element, or portion thereof, is completed,

22  whichever is earlier, the regional planning agency shall file

23  invoices for verifiable, direct costs involved with the

24  governing body.  Upon the failure of the local government to

25  pay such invoices within 90 days, the regional planning agency

26  may, upon filing proper vouchers with the Chief Financial

27  Officer State Comptroller, request payment by the Chief

28  Financial Officer State Comptroller from unencumbered revenue

29  or other tax sharing funds due such local government from the

30  state for work actually performed, and the Chief Financial

31  Officer State Comptroller shall pay such vouchers; however,

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 1  the amount of such payment shall not exceed 50 percent of such

 2  funds due such local government in any one year.

 3         Section 158.  Section 166.111, Florida Statutes, is

 4  amended to read:

 5         166.111  Authority to borrow.--

 6         (1)  The governing body of every municipality may

 7  borrow money, contract loans, and issue bonds as defined in s.

 8  166.101 from time to time to finance the undertaking of any

 9  capital or other project for the purposes permitted by the

10  State Constitution and may pledge the funds, credit, property,

11  and taxing power of the municipality for the payment of such

12  debts and bonds.

13         (2)(a)  The Legislature finds:

14         1.  The widespread and massive damage to persons and

15  property caused by the August 24, 1992, storm known as

16  Hurricane Andrew has generated insurance claims of such a

17  nature as to render numerous insurers operating within this

18  state insolvent, and therefore unable to satisfy covered

19  claims.

20         2.  The inability of insureds within this state to

21  receive payment of covered claims or to receive such payment

22  on a timely basis creates financial and other hardships for

23  such insureds and places undue burdens on the state, the

24  affected units of local government, and the community at

25  large.

26         3.  In addition, the failure of insurers to pay covered

27  claims or to pay such claims on a timely basis due to the

28  insolvency of such insurers can undermine the public's

29  confidence in insurers operating within this state, thereby

30  adversely affecting the stability of the insurance industry in

31  this state.

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 1         4.  The state has previously taken action to address

 2  these problems by adopting the Florida Insurance Guaranty

 3  Association Act, which, among other things, provides a

 4  mechanism for the payment of covered claims under certain

 5  insurance policies to avoid excessive delay in payment and to

 6  avoid financial loss to claimants or policyholders because of

 7  the insolvency of an insurer.

 8         5.  In the wake of the unprecedented destruction caused

 9  by Hurricane Andrew, the resultant covered claims, and the

10  number of insurers rendered insolvent thereby, it is evident

11  that alternative programs must be developed to allow the

12  Florida Insurance Guaranty Association to more expeditiously

13  and effectively provide for the payment of covered claims.

14         6.  It is therefore determined to be in the best

15  interests of, and necessary for, the protection of the public

16  health, safety, and general welfare of the residents of this

17  state, and for the protection and preservation of the economic

18  stability of insurers operating in this state, and it is

19  hereby declared to be an essential public purpose, to permit

20  certain municipalities to take such actions as will provide

21  relief to claimants and policyholders having covered claims

22  against insolvent insurers operating in this state, by

23  expediting the handling and payment of covered claims.

24         7.  To achieve the foregoing purposes, it is proper to

25  authorize municipalities of this state substantially affected

26  by Hurricane Andrew to issue bonds to assist the Florida

27  Insurance Guaranty Association in expediting the handling and

28  payment of covered claims against insolvent insurers operating

29  in this state.

30         8.  In order to avoid the needless and indiscriminate

31  proliferation, duplication, and fragmentation of such

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 1  assistance programs, it is proper to authorize a municipality

 2  severely affected by Hurricane Andrew to provide for the

 3  payment of covered claims beyond its territorial limits in the

 4  implementation of such programs.

 5         (b)  The governing body of any municipality the

 6  residents of which have been substantially affected by the

 7  August 24, 1992, storm known as Hurricane Andrew, or any

 8  county as defined in s. 125.011(1), may issue no more than

 9  $500 million, in aggregate principal amount, of bonds as

10  defined in s. 166.101 from time to time to fund an assistance

11  program, in conjunction with the Florida Insurance Guaranty

12  Association, for the purpose of paying to claimants or

13  policyholders covered claims, as such term is defined in s.

14  631.54(3), arising through the insolvency of an insurer

15  occurring on or before March 31, 1993, which insolvency is

16  determined by the Florida Insurance Guaranty Association to

17  have been a result of Hurricane Andrew, regardless of whether

18  such claimants or policyholders are residents of such

19  municipality or the property to which such claim relates is

20  located within or outside of the territorial jurisdiction of

21  such municipality.  A municipality issuing bonds for this

22  purpose shall enter into such contracts with the Florida

23  Insurance Guaranty Association or any entity acting on behalf

24  of the Florida Insurance Guaranty Association as are necessary

25  to implement the assistance program. Any bonds issued by a

26  municipality under this subsection shall be payable from and

27  secured by moneys received by or on behalf of the municipality

28  from assessments levied under s. 631.57(3)(e), and assigned

29  and pledged under s. 631.57(3)(e) to or on behalf of the

30  municipality for the benefit of the holders of such bonds in

31  connection with such assistance program.  The funds, credit,

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 1  property, and taxing power of the municipality shall not be

 2  pledged for the payment of such bonds.

 3         (c)  The governing body of the municipality issuing

 4  bonds authorized by paragraph (b) shall require all firms,

 5  including, but not limited to, the financial advisers, legal

 6  counsel, and underwriters, providing professional services in

 7  the issuance of such bonds to include minority firms in the

 8  provision of such services.  To meet such participation

 9  requirement, the minority firm must have full-time employees

10  located in this state and a permanent place of business

11  located in this state, and must be a firm which is at least 51

12  percent owned by minority persons as defined by s. 288.703(3),

13  or any combination thereof, and whose management and daily

14  operations are controlled by such persons. Minority firms must

15  be offered participation in not less than 20 percent of the

16  respective contracts for professional services.

17         Section 159.  Paragraph (a) of subsection (8) of

18  section 175.032, Florida Statutes, is amended to read:

19         175.032  Definitions.--For any municipality, special

20  fire control district, chapter plan, local law municipality,

21  local law special fire control district, or local law plan

22  under this chapter, the following words and phrases have the

23  following meanings:

24         (8)(a)  "Firefighter" means any person employed solely

25  by a constituted fire department of any municipality or

26  special fire control district who is certified as a

27  firefighter as a condition of employment in accordance with

28  the provisions of s. 633.35 and whose duty it is to extinguish

29  fires, to protect life, or to protect property.  However, for

30  purposes of this chapter only, "firefighter" also includes

31  public safety officers who are responsible for performing both

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 1  police and fire services, who are certified as police officers

 2  or firefighters, and who are certified by their employers to

 3  the Chief Financial Officer Insurance Commissioner and

 4  Treasurer as participating in this chapter prior to October 1,

 5  1979.  Effective October 1, 1979, public safety officers who

 6  have not been certified as participating in this chapter shall

 7  be considered police officers for retirement purposes and

 8  shall be eligible to participate in chapter 185. Any plan may

 9  provide that the fire chief shall have an option to

10  participate, or not, in that plan.

11         Section 160.  Subsection (1) of section 175.101,

12  Florida Statutes, is amended to read:

13         175.101  State excise tax on property insurance

14  premiums authorized; procedure.--For any municipality, special

15  fire control district, chapter plan, local law municipality,

16  local law special fire control district, or local law plan

17  under this chapter:

18         (1)  Each municipality or special fire control district

19  in this state described and classified in s. 175.041, having a

20  lawfully established firefighters' pension trust fund or

21  municipal fund or special fire control district fund, by

22  whatever name known, providing pension benefits to

23  firefighters as provided under this chapter, may assess and

24  impose on every insurance company, corporation, or other

25  insurer now engaged in or carrying on, or who shall

26  hereinafter engage in or carry on, the business of property

27  insurance as shown by the records of the Office of Insurance

28  Regulation of the Financial Services Commission Department of

29  Insurance an excise tax in addition to any lawful license or

30  excise tax now levied by each of the municipalities or special

31  fire control districts, respectively, amounting to 1.85

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 1  percent of the gross amount of receipts of premiums from

 2  policyholders on all premiums collected on property insurance

 3  policies covering property within the corporate limits of such

 4  municipalities or within the legally defined boundaries of

 5  special fire control districts, respectively.  Whenever the

 6  boundaries of a special fire control district that has

 7  lawfully established a firefighters' pension trust fund

 8  encompass a portion of the corporate territory of a

 9  municipality that has also lawfully established a

10  firefighters' pension trust fund, that portion of the tax

11  receipts attributable to insurance policies covering property

12  situated both within the municipality and the special fire

13  control district shall be given to the fire service provider.

14  The agent shall identify the fire service provider on the

15  property owner's application for insurance.  Remaining

16  revenues collected pursuant to this chapter shall be

17  distributed to the municipality or special fire control

18  district according to the location of the insured property.

19  

20  This section also applies to any municipality consisting of a

21  single consolidated government which is made up of a former

22  county and one or more municipalities, consolidated pursuant

23  to the authority in s. 3 or s. 6(e), Art. VIII of the State

24  Constitution, and to property insurance policies covering

25  property within the boundaries of the consolidated government,

26  regardless of whether the properties are located within one or

27  more separately incorporated areas within the consolidated

28  government, provided the properties are being provided fire

29  protection services by the consolidated government.

30         Section 161.  Subsection (2) of section 175.121,

31  Florida Statutes, is amended to read:

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 1         175.121  Department of Revenue and Division of

 2  Retirement to keep accounts of deposits; disbursements.--For

 3  any municipality or special fire control district having a

 4  chapter or local law plan established pursuant to this

 5  chapter:

 6         (2)  The Chief Financial Officer Comptroller shall, on

 7  or before July 1 of each year, and at such other times as

 8  authorized by the division, draw his or her warrants on the

 9  full net amount of money then on deposit in the Police and

10  Firefighters' Premium Tax Trust Fund pursuant to this chapter,

11  specifying the municipalities and special fire control

12  districts to which the moneys must be paid and the net amount

13  collected for and to be paid to each municipality or special

14  fire control district, respectively, subject to the limitation

15  on disbursement under s. 175.122. The sum payable to each

16  municipality or special fire control district is appropriated

17  annually out of the Police and Firefighters' Premium Tax Trust

18  Fund. The warrants of the Chief Financial Officer Comptroller

19  shall be payable to the respective municipalities and special

20  fire control districts entitled to receive them and shall be

21  remitted annually by the division to the respective

22  municipalities and special fire control districts.  In lieu

23  thereof, the municipality or special fire control district may

24  provide authorization to the division for the direct payment

25  of the premium tax to the board of trustees. In order for a

26  municipality or special fire control district and its pension

27  fund to participate in the distribution of premium tax moneys

28  under this chapter, all the provisions shall be complied with

29  annually, including state acceptance pursuant to part VII of

30  chapter 112.

31  

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 1         Section 162.  Section 175.151, Florida Statutes, is

 2  amended to read:

 3         175.151  Penalty for failure of insurers to comply with

 4  this act.--If Should any insurance company, corporation or

 5  other insurer fails fail to comply with the provisions of this

 6  act, on or before March 1 of each year as herein provided, the

 7  certificate of authority issued to said insurance company,

 8  corporation or other insurer to transact business in this

 9  state may be canceled and revoked by the Office of Insurance

10  Regulation of the Financial Services Commission Department of

11  Insurance, and it is unlawful for any such insurance company,

12  corporation, or other insurer to transact business thereafter

13  in this state unless such insurance company, corporation, or

14  other insurer shall be granted a new certificate of authority

15  to transact any business in this state, in compliance with

16  provisions of law authorizing such certificate of authority to

17  be issued. The division is responsible for notifying the

18  Office of Insurance Regulation Department of Insurance

19  regarding any such failure to comply.

20         Section 163.  Subsection (1) of section 185.08, Florida

21  Statutes, is amended to read:

22         185.08  State excise tax on casualty insurance premiums

23  authorized; procedure.--For any municipality, chapter plan,

24  local law municipality, or local law plan under this chapter:

25         (1)  Each incorporated municipality in this state

26  described and classified in s. 185.03, as well as each other

27  city or town of this state which on July 31, 1953, had a

28  lawfully established municipal police officers' retirement

29  trust fund or city fund, by whatever name known, providing

30  pension or relief benefits to police officers as provided

31  under this chapter, may assess and impose on every insurance

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 1  company, corporation, or other insurer now engaged in or

 2  carrying on, or who shall hereafter engage in or carry on, the

 3  business of casualty insurance as shown by records of the

 4  Office of Insurance Regulation of the Financial Services

 5  Commission Department of Insurance, an excise tax in addition

 6  to any lawful license or excise tax now levied by each of the

 7  said municipalities, respectively, amounting to .85 percent of

 8  the gross amount of receipts of premiums from policyholders on

 9  all premiums collected on casualty insurance policies covering

10  property within the corporate limits of such municipalities,

11  respectively.

12         Section 164.  Subsection (2) of section 185.10, Florida

13  Statutes, is amended to read:

14         185.10  Department of Revenue and Division of

15  Retirement to keep accounts of deposits; disbursements.--For

16  any municipality having a chapter plan or local law plan under

17  this chapter:

18         (2)  The Chief Financial Officer Comptroller shall, on

19  or before July 1 of each year, and at such other times as

20  authorized by the division, draw his or her warrants on the

21  full net amount of money then on deposit pursuant to this

22  chapter in the Police and Firefighters' Premium Tax Trust

23  Fund, specifying the municipalities to which the moneys must

24  be paid and the net amount collected for and to be paid to

25  each municipality, respectively. The sum payable to each

26  municipality is appropriated annually out of the Police and

27  Firefighters' Premium Tax Trust Fund.  The warrants of the

28  Chief Financial Officer Comptroller shall be payable to the

29  respective municipalities entitled to receive them and shall

30  be remitted annually by the division to the respective

31  municipalities. In lieu thereof, the municipality may provide

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 1  authorization to the division for the direct payment of the

 2  premium tax to the board of trustees.  In order for a

 3  municipality and its retirement fund to participate in the

 4  distribution of premium tax moneys under this chapter, all the

 5  provisions shall be complied with annually, including state

 6  acceptance pursuant to part VII of chapter 112.

 7         Section 165.  Section 185.13, Florida Statutes, is

 8  amended to read:

 9         185.13  Failure of insurer to comply with chapter;

10  penalty.--If Should any insurance company, corporation or

11  other insurer fails fail to comply with the provisions of this

12  chapter, on or before March 1 in each year as herein provided,

13  the certificate of authority issued to said insurance company,

14  corporation or other insurer to transact business in this

15  state may be canceled and revoked by the Office of Insurance

16  Regulation of the Financial Services Commission Department of

17  Insurance, and it is unlawful for any such insurance company,

18  corporation or other insurer to transact any business

19  thereafter in this state unless such insurance company,

20  corporation or other insurer shall be granted a new

21  certificate of authority to transact business in this state,

22  in compliance with provisions of law authorizing such

23  certificate of authority to be issued. The division shall be

24  responsible for notifying the Office of Insurance Regulation

25  Department of Insurance regarding any such failure to comply.

26         Section 166.  Subsections (2), (3), and (5) of section

27  189.4035, Florida Statutes, are amended to read:

28         189.4035  Preparation of official list of special

29  districts.--

30         (2)  The official list shall be produced by the

31  department after the department has notified each special

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 1  district that is currently reporting to the department, the

 2  Department of Financial Services Banking and Finance pursuant

 3  to s. 218.32, or the Auditor General pursuant to s. 218.39.

 4  Upon notification, each special district shall submit, within

 5  60 days, its determination of its status.  The determination

 6  submitted by a special district shall be consistent with the

 7  status reported in the most recent local government audit of

 8  district activities submitted to the Auditor General pursuant

 9  to s. 218.39.

10         (3)  The Department of Financial Services Banking and

11  Finance shall provide the department with a list of dependent

12  special districts reporting pursuant to s. 218.32 for

13  inclusion on the official list of special districts.

14         (5)  The official list of special districts shall be

15  distributed by the department on October 1 of each year to the

16  President of the Senate, the Speaker of the House of

17  Representatives, the Auditor General, the Department of

18  Revenue, the Department of Financial Services Banking and

19  Finance, the Department of Management Services, the State

20  Board of Administration, counties, municipalities, county

21  property appraisers, tax collectors, and supervisors of

22  elections and to all interested parties who request the list.

23         Section 167.  Subsection (1) of section 189.412,

24  Florida Statutes, is amended to read:

25         189.412  Special District Information Program; duties

26  and responsibilities.--The Special District Information

27  Program of the Department of Community Affairs is created and

28  has the following special duties:

29         (1)  The collection and maintenance of special district

30  compliance status reports from the Auditor General, the

31  Department of Financial Services Banking and Finance, the

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 1  Division of Bond Finance of the State Board of Administration,

 2  the Department of Management Services, the Department of

 3  Revenue, and the Commission on Ethics for the reporting

 4  required in ss. 112.3144, 112.3145, 112.3148, 112.3149,

 5  112.63, 200.068, 218.32, 218.38, 218.39, and 280.17 and

 6  chapter 121 and from state agencies administering programs

 7  that distribute money to special districts. The special

 8  district compliance status reports must consist of a list of

 9  special districts used in that state agency and a list of

10  which special districts did not comply with the reporting

11  statutorily required by that agency.

12         Section 168.  Section 189.427, Florida Statutes, is

13  amended to read:

14         189.427  Fee schedule; Operating Trust Fund.--The

15  Department of Community Affairs, by rule, shall establish a

16  schedule of fees to pay one-half of the costs incurred by the

17  department in administering this act, except that the fee may

18  not exceed $175 per district per year. The fees collected

19  under this section shall be deposited in the Operating Trust

20  Fund, which shall be administered by the Department of

21  Community Affairs. Any fee rule must consider factors such as

22  the dependent and independent status of the district and

23  district revenues for the most recent fiscal year as reported

24  to the Department of Financial Services Banking and Finance.

25  The department may assess fines of not more than $25, with an

26  aggregate total not to exceed $50, as penalties against

27  special districts that fail to remit required fees to the

28  department. It is the intent of the Legislature that general

29  revenue funds will be made available to the department to pay

30  one-half of the cost of administering this act.

31  

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 1         Section 169.  Subsection (3) of section 190.007,

 2  Florida Statutes, is amended to read:

 3         190.007  Board of supervisors; general duties.--

 4         (3)  The board is authorized to select as a depository

 5  for its funds any qualified public depository as defined in s.

 6  280.02 which meets all the requirements of chapter 280 and has

 7  been designated by the Chief Financial Officer Treasurer as a

 8  qualified public depository, upon such terms and conditions as

 9  to the payment of interest by such depository upon the funds

10  so deposited as the board may deem just and reasonable.

11         Section 170.  Subsection (16) of section 191.006,

12  Florida Statutes, is amended to read:

13         191.006  General powers.--The district shall have, and

14  the board may exercise by majority vote, the following powers:

15         (16)  To select as a depository for its funds any

16  qualified public depository as defined in s. 280.02 which

17  meets all the requirements of chapter 280 and has been

18  designated by the Chief Financial Officer State Treasurer as a

19  qualified public depository, upon such terms and conditions as

20  to the payment of interest upon the funds deposited as the

21  board deems just and reasonable.

22         Section 171.  Subsection (4) of section 192.091,

23  Florida Statutes, is amended to read:

24         192.091  Commissions of property appraisers and tax

25  collectors.--

26         (4)  The commissions for collecting taxes assessed for

27  or levied by the state shall be audited, and allowed, by the

28  Comptroller and shall be paid by the Chief Financial Officer

29  Treasurer as other Comptroller's warrants are paid; and

30  commissions for collecting the county taxes shall be audited

31  and paid by the boards of county commissioners of the several

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 1  counties of this state.  The commissions for collecting all

 2  special school district taxes shall be audited by the school

 3  board of each respective district and taken out of the funds

 4  of the respective special school district under its control

 5  and allowed and paid to the tax collectors for collecting such

 6  taxes; and the commissions for collecting all other district

 7  taxes, whether special or not, shall be audited and paid by

 8  the governing board or commission having charge of the

 9  financial obligations of such district.  All commissions for

10  collecting special tax district taxes shall be paid at the

11  time and in the manner now, or as may hereafter be, provided

12  for the payment of the commissions for the collection of

13  county taxes.  All amounts paid as compensation to any tax

14  collector under the provisions of this or any other law shall

15  be a part of the general income or compensation of such

16  officer for the year in which received, and nothing contained

17  in this section shall be held or construed to affect or

18  increase the maximum salary as now provided by law for any

19  such officer.

20         Section 172.  Subsection (3) of section 192.102,

21  Florida Statutes, is amended to read:

22         192.102  Payment of property appraisers' and

23  collectors' commissions.--

24         (3)  The Chief Financial Officer Comptroller of the

25  state shall issue to each of the county property appraisers

26  and collectors of taxes, on the first Monday of January,

27  April, July, and October, on demand of such county property

28  appraisers and collectors of taxes after approval by the

29  Department of Revenue, and shall pay, his or her warrant,

30  which shall be paid by the Treasurer of the state, for an

31  amount equal to one-fourth of four-fifths of the total amount

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 1  of commissions received by such county property appraisers and

 2  collectors of taxes or their predecessors in office from the

 3  state during and for the preceding year, and the balance of

 4  the commissions earned by such county property appraiser and

 5  collector of taxes, respectively, during each year, over and

 6  above the amount of such installment payments herein provided

 7  for, shall be payable when a report of errors and double

 8  assessments is approved by the county commissioners and a copy

 9  thereof filed with the Department of Revenue.

10         Section 173.  Subsection (1) of section 193.092,

11  Florida Statutes, is amended to read:

12         193.092  Assessment of property for back taxes.--

13         (1)  When it shall appear that any ad valorem tax might

14  have been lawfully assessed or collected upon any property in

15  the state, but that such tax was not lawfully assessed or

16  levied, and has not been collected for any year within a

17  period of 3 years next preceding the year in which it is

18  ascertained that such tax has not been assessed, or levied, or

19  collected, then the officers authorized shall make the

20  assessment of taxes upon such property in addition to the

21  assessment of such property for the current year, and shall

22  assess the same separately for such property as may have

23  escaped taxation at and upon the basis of valuation applied to

24  such property for the year or years in which it escaped

25  taxation, noting distinctly the year when such property

26  escaped taxation and such assessment shall have the same force

27  and effect as it would have had if it had been made in the

28  year in which the property shall have escaped taxation, and

29  taxes shall be levied and collected thereon in like manner and

30  together with taxes for the current year in which the

31  assessment is made.  But no property shall be assessed for

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 1  more than 3 years' arrears of taxation, and all property so

 2  escaping taxation shall be subject to such taxation to be

 3  assessed in whomsoever's hands or possession the same may be

 4  found, except that property acquired by a bona fide purchaser

 5  who was without knowledge of the escaped taxation shall not be

 6  subject to assessment for taxes for any time prior to the time

 7  of such purchase, but it is the duty of the property appraiser

 8  making such assessment to serve upon the previous owner a

 9  notice of intent to record in the public records of the county

10  a notice of tax lien against any property owned by that person

11  in the county. Any property owned by such previous owner which

12  is situated in this state is subject to the lien of such

13  assessment in the same manner as a recorded judgment. Before

14  any such lien may be recorded, the owner so notified must be

15  given 30 days to pay the taxes, penalties, and interest. Once

16  recorded, such lien may be recorded in any county in this

17  state and shall constitute a lien on any property of such

18  person in such county in the same manner as a recorded

19  judgment, and may be enforced by the tax collector using all

20  remedies pertaining to same; provided, that the county

21  property appraiser shall not assess any lot or parcel of land

22  certified or sold to the state for any previous years unless

23  such lot or parcel of lands so certified or sold shall be

24  included in the list furnished by the Chief Financial Officer

25  Comptroller to the county property appraiser as provided by

26  law; provided, if real or personal property be assessed for

27  taxes, and because of litigation delay ensues and the

28  assessment be held invalid the taxing authorities, may

29  reassess such property within the time herein provided after

30  the termination of such litigation; provided further, that

31  personal property acquired in good faith by purchase shall not

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 1  be subject to assessment for taxes for any time prior to the

 2  time of such purchase, but the individual or corporation

 3  liable for any such assessment shall continue personally

 4  liable for same. As used in this subsection, the term "bona

 5  fide purchaser" means a purchaser for value, in good faith,

 6  before certification of such assessment of back taxes to the

 7  tax collector for collection.

 8         Section 174.  Section 195.101, Florida Statutes, is

 9  amended to read:

10         195.101  Withholding of state funds.--

11         (1)  The Department of Revenue is hereby directed to

12  determine each year whether the several counties of this state

13  are assessing the real and tangible personal property within

14  their jurisdiction in accordance with law.  If the Department

15  of Revenue determines that any county is assessing property at

16  less than that prescribed by law, the Chief Financial Officer

17  Comptroller shall withhold from such county a portion of any

18  state funds to which the county may be entitled equal to the

19  difference of the amount assessed and the amount required to

20  be assessed by law.

21         (2)  The Department of Revenue is hereby directed to

22  determine each year whether the several municipalities of this

23  state are assessing the real and tangible personal property

24  within their jurisdiction in accordance with law.  If the

25  Department of Revenue determines that any municipality is

26  assessing property at less than that prescribed by law, the

27  Chief Financial Officer Comptroller shall withhold from such

28  municipality a portion of any state funds to which that

29  municipality may be entitled equal to the difference of the

30  amount assessed and the amount required to be assessed by law.

31  

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 1         Section 175.  Subsection (1) of section 198.29, Florida

 2  Statutes, is amended to read:

 3         198.29  Refunds of excess tax paid.--

 4         (1)  Whenever it appears, upon the examination of any

 5  return made under this chapter or upon proof submitted to the

 6  department by the personal representative, that an amount of

 7  estate tax has been paid in excess of the tax legally due

 8  under this chapter, the amount of such overpayment, together

 9  with any overpayment of interest thereon shall be refunded to

10  the personal representative and paid by upon the warrant of

11  the Chief Financial Officer Comptroller, drawn upon the

12  Treasurer who shall honor and pay the same; such refund shall

13  be made by the department as a matter of course regardless of

14  whether or not the personal representative has filed a written

15  claim therefor, except that upon request of the department,

16  the personal representative shall file with the department a

17  conformed copy of any written claim for refund of federal

18  estate tax which has theretofore been filed with the United

19  States.

20         Section 176.  Paragraph (a) of subsection (7) of

21  section 199.232, Florida Statutes, is amended to read:

22         199.232  Powers of department.--

23         (7)(a)  If it appears, upon examination of an

24  intangible tax return made under this chapter or upon proof

25  submitted to the department by the taxpayer, that an amount of

26  intangible personal property tax has been paid in excess of

27  the amount due, the department shall refund the amount of the

28  overpayment to the taxpayer by a warrant of the Chief

29  Financial Officer Comptroller, drawn upon the Treasurer. The

30  department shall refund the overpayment without regard to

31  whether the taxpayer has filed a written claim for a refund;

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 1  however, the department may request that the taxpayer file a

 2  statement affirming that the taxpayer made the overpayment.

 3         Section 177.  Paragraph (a) of subsection (1) of

 4  section 203.01, Florida Statutes, is amended to read:

 5         203.01  Tax on gross receipts for utility and

 6  communications services.--

 7         (1)(a)1.  Every person that receives payment for any

 8  utility service shall report by the last day of each month to

 9  the Department of Revenue, under oath of the secretary or some

10  other officer of such person, the total amount of gross

11  receipts derived from business done within this state, or

12  between points within this state, for the preceding month and,

13  at the same time, shall pay into the State Treasury an amount

14  equal to a percentage of such gross receipts at the rate set

15  forth in paragraph (b).  Such collections shall be certified

16  by the Chief Financial Officer Comptroller upon the request of

17  the State Board of Education.

18         2.  A tax is levied on communications services as

19  defined in s. 202.11(3). Such tax shall be applied to the same

20  services and transactions as are subject to taxation under

21  chapter 202, and to communications services that are subject

22  to the exemption provided in s. 202.125(1). Such tax shall be

23  applied to the sales price of communications services when

24  sold at retail and to the actual cost of operating substitute

25  communications systems, as such terms are defined in s.

26  202.11, shall be due and payable at the same time as the taxes

27  imposed pursuant to chapter 202, and shall be administered and

28  collected pursuant to the provisions of chapter 202.

29         Section 178.  Subsection (1) of section 206.46, Florida

30  Statutes, is amended to read:

31         206.46  State Transportation Trust Fund.--

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 1         (1)  All moneys in the State Transportation Trust Fund,

 2  which is hereby created, shall be used for transportation

 3  purposes, as provided by law, under the direction of the

 4  Department of Transportation, which department may from time

 5  to time make requisition on the Chief Financial Officer

 6  Comptroller for such funds.  Moneys from such fund shall be

 7  drawn by the Chief Financial Officer Comptroller by warrant

 8  upon the State Treasury pursuant to vouchers and shall be paid

 9  in like manner as other state warrants are paid out of the

10  appropriated fund against which the warrants are drawn.  All

11  sums of money necessary to provide for the payment of the

12  warrants by the Chief Financial Officer Comptroller drawn upon

13  such fund are appropriated annually out of the fund for the

14  purpose of making such payments from time to time.

15         Section 179.  Subsection (4) of section 210.16, Florida

16  Statutes, is amended to read:

17         210.16  Revocation or suspension of permit.--

18         (4)  In lieu of the suspension or revocation of

19  permits, the division may impose civil penalties against

20  holders of permits for violations of this part or rules and

21  regulations relating thereto.  No civil penalty so imposed

22  shall exceed $1,000 for each offense, and all amounts

23  collected shall be deposited with the Chief Financial Officer

24  State Treasurer to the credit of the General Revenue Fund.  If

25  the holder of the permit fails to pay the civil penalty, his

26  or her permit shall be suspended for such period of time as

27  the division may specify.

28         Section 180.  Subsection (2) of section 210.20, Florida

29  Statutes, is amended to read:

30         210.20  Employees and assistants; distribution of

31  funds.--

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 1         (2)  As collections are received by the division from

 2  such cigarette taxes, it shall pay the same into a trust fund

 3  in the State Treasury designated "Cigarette Tax Collection

 4  Trust Fund" which shall be paid and distributed as follows:

 5         (a)  The division shall from month to month certify to

 6  the Chief Financial Officer Comptroller the amount derived

 7  from the cigarette tax imposed by s. 210.02, less the service

 8  charges provided for in s. 215.20 and less 0.9 percent of the

 9  amount derived from the cigarette tax imposed by s. 210.02,

10  which shall be deposited into the Alcoholic Beverage and

11  Tobacco Trust Fund, specifying the amounts to be transferred

12  from the Cigarette Tax Collection Trust Fund and credited on

13  the basis of 2.9 percent of the net collections to the Revenue

14  Sharing Trust Fund for Counties and 29.3 percent of the net

15  collections for the funding of indigent health care to the

16  Public Medical Assistance Trust Fund.

17         (b)1.  Beginning January 1, 1999, and continuing for 10

18  years thereafter, the division shall from month to month

19  certify to the Chief Financial Officer Comptroller the amount

20  derived from the cigarette tax imposed by s. 210.02, less the

21  service charges provided for in s. 215.20 and less 0.9 percent

22  of the amount derived from the cigarette tax imposed by s.

23  210.02, which shall be deposited into the Alcoholic Beverage

24  and Tobacco Trust Fund, specifying an amount equal to 2.59

25  percent of the net collections, and that amount shall be paid

26  to the Board of Directors of the H. Lee Moffitt Cancer Center

27  and Research Institute, established under s. 1004.43, by

28  warrant drawn by the Chief Financial Officer Comptroller upon

29  the State Treasury. These funds are hereby appropriated

30  monthly out of the Cigarette Tax Collection Trust Fund, to be

31  used for the purpose of constructing, furnishing, and

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 1  equipping a cancer research facility at the University of

 2  South Florida adjacent to the H. Lee Moffitt Cancer Center and

 3  Research Institute. In fiscal years 1999-2000 and thereafter

 4  with the exception of fiscal year 2008-2009, the appropriation

 5  to the H. Lee Moffitt Cancer Center and Research Institute

 6  authorized by this subparagraph shall not be less than the

 7  amount that would have been paid to the H. Lee Moffitt Cancer

 8  Center and Research Institute for fiscal year 1998-1999 had

 9  payments been made for the entire fiscal year rather than for

10  a 6-month period thereof.

11         2.  Beginning July 1, 2002, and continuing through June

12  30, 2004, the division shall, in addition to the distribution

13  authorized in subparagraph 1., from month to month certify to

14  the Chief Financial Officer Comptroller the amount derived

15  from the cigarette tax imposed by s. 210.02, less the service

16  charges provided for in s. 215.20 and less 0.9 percent of the

17  amount derived from the cigarette tax imposed by s. 210.02,

18  which shall be deposited into the Alcoholic Beverage and

19  Tobacco Trust Fund, specifying an amount equal to 0.2632

20  percent of the net collections, and that amount shall be paid

21  to the Board of Directors of the H. Lee Moffitt Cancer Center

22  and Research Institute, established under s. 1004.43, by

23  warrant drawn by the Chief Financial Officer Comptroller.

24  Beginning July 1, 2004, and continuing through June 30, 2016,

25  the division shall, in addition to the distribution authorized

26  in subparagraph 1., from month to month certify to the Chief

27  Financial Officer Comptroller the amount derived from the

28  cigarette tax imposed by s. 210.02, less the service charges

29  provided for in s. 215.20 and less 0.9 percent of the amount

30  derived from the cigarette tax imposed by s. 210.02, which

31  shall be deposited into the Alcoholic Beverage and Tobacco

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 1  Trust Fund, specifying an amount equal to 1.47 percent of the

 2  net collections, and that amount shall be paid to the Board of

 3  Directors of the H. Lee Moffitt Cancer Center and Research

 4  Institute, established under s. 1004.43, by warrant drawn by

 5  the Chief Financial Officer Comptroller.  These funds are

 6  appropriated monthly out of the Cigarette Tax Collection Trust

 7  Fund, to be used for the purpose of constructing, furnishing,

 8  and equipping a cancer research facility at the University of

 9  South Florida adjacent to the H. Lee Moffitt Cancer Center and

10  Research Institute.  In fiscal years 2004-2005 and thereafter,

11  the appropriation to the H. Lee Moffitt Cancer Center and

12  Research Institute authorized by this subparagraph shall not

13  be less than the amount that would have been paid to the H.

14  Lee Moffitt Cancer Center and Research Institute in fiscal

15  year 2001-2002, had this subparagraph been in effect.

16         Section 181.  Subsection (4) of section 210.50, Florida

17  Statutes, is amended to read:

18         210.50  Revocation or suspension of license.--

19         (4)  In lieu of the suspension or revocation of

20  licenses, the division may impose civil penalties against

21  holders of licenses for violations of this part or rules

22  relating thereto. No civil penalty so imposed shall exceed

23  $1,000 for each offense, and all amounts collected shall be

24  deposited with the Chief Financial Officer State Treasurer to

25  the credit of the General Revenue Fund.  If the holder of the

26  license fails to pay the civil penalty, his or her license

27  shall be suspended for such period of time as the division may

28  specify.

29         Section 182.  Subsection (1) of section 211.06, Florida

30  Statutes, is amended to read:

31  

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 1         211.06  Oil and Gas Tax Trust Fund; distribution of tax

 2  proceeds.--All taxes, interest, and penalties imposed under

 3  this part shall be collected by the department and placed in a

 4  special fund designated the "Oil and Gas Tax Trust Fund."

 5         (1)  There is hereby annually appropriated a sufficient

 6  amount from the Oil and Gas Tax Trust Fund for the Chief

 7  Financial Officer Comptroller to refund any overpayments that

 8  which have been properly approved.

 9         Section 183.  Subsection (3) of section 211.31, Florida

10  Statutes, is amended to read:

11         211.31  Levy of tax on severance of certain solid

12  minerals; rate, basis, and distribution of tax.--

13         (3)  Interest earned on funds within any trust fund

14  created under this part shall be invested and reinvested to

15  the credit of such trust fund in accordance with s. 17.61 s.

16  18.125.

17         Section 184.  Paragraph (d) of subsection (1) of

18  section 211.32, Florida Statutes, is amended to read:

19         211.32  Tax on solid minerals; Land Reclamation Trust

20  Fund; refund for restoration and reclamation.--

21         (1)

22         (d)  The Chief Financial Officer Comptroller shall,

23  upon written verification of compliance with paragraph (a),

24  paragraph (b), or paragraph (c) by the Department of

25  Environmental Protection, and upon verification of the cost of

26  the restoration and reclamation program or, if paragraph (c)

27  is elected, the fair market value of the land, grant refunds,

28  to be paid from the Land Reclamation Trust Fund, of the taxes

29  paid under this part, in an amount equal to 100 percent of the

30  costs incurred in complying with paragraph (a) or paragraph

31  (b), or 100 percent of the fair market value of the land

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 1  transferred in complying with paragraph (c), subject to the

 2  following limitations:

 3         1.  A taxpayer shall not be entitled to refunds in

 4  excess of the amount of taxes paid by the taxpayer under this

 5  part which are deposited in the Land Reclamation Trust Fund.

 6         2.  A taxpayer shall not be entitled to the payment of

 7  a refund for costs incurred in connection with a particular

 8  restoration and reclamation program unless and until the

 9  taxpayer is accomplishing the program in reasonable compliance

10  with the criteria established by the Department of

11  Environmental Protection.

12         Section 185.  Paragraph (m) of subsection (5) of

13  section 212.08, Florida Statutes, is amended to read:

14         212.08  Sales, rental, use, consumption, distribution,

15  and storage tax; specified exemptions.--The sale at retail,

16  the rental, the use, the consumption, the distribution, and

17  the storage to be used or consumed in this state of the

18  following are hereby specifically exempt from the tax imposed

19  by this chapter.

20         (5)  EXEMPTIONS; ACCOUNT OF USE.--

21         (m)  Educational materials purchased by certain child

22  care facilities.--Educational materials, such as glue, paper,

23  paints, crayons, unique craft items, scissors, books, and

24  educational toys, purchased by a child care facility that

25  meets the standards delineated in s. 402.305, is licensed

26  under s. 402.308, holds a current Gold Seal Quality Care

27  designation pursuant to s. 402.281, and provides basic health

28  insurance to all employees are exempt from the taxes imposed

29  by this chapter. For purposes of this paragraph, the term

30  "basic health insurance" shall be defined and promulgated in

31  rules developed jointly by the Department of Children and

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 1  Family Services, the Agency for Health Care Administration,

 2  and the Financial Services Commission Department of Insurance.

 3         Section 186.  Paragraph (c) of subsection (6) of

 4  section 212.12, Florida Statutes, is amended to read:

 5         212.12  Dealer's credit for collecting tax; penalties

 6  for noncompliance; powers of Department of Revenue in dealing

 7  with delinquents; brackets applicable to taxable transactions;

 8  records required.--

 9         (6)

10         (c)1.  If the records of a dealer are adequate but

11  voluminous in nature and substance, the department may sample

12  such records, except for fixed assets, and project the audit

13  findings derived therefrom over the entire audit period to

14  determine the proportion that taxable retail sales bear to

15  total retail sales or the proportion that taxable purchases

16  bear to total purchases. In order to conduct such a sample,

17  the department must first make a good faith effort to reach an

18  agreement with the dealer, which agreement provides for the

19  means and methods to be used in the sampling process.  In the

20  event that no agreement is reached, the dealer is entitled to

21  a review by the executive director.

22         2.  For the purposes of sampling pursuant to

23  subparagraph 1., the department shall project any deficiencies

24  and overpayments derived therefrom over the entire audit

25  period. In determining the dealer's compliance, the department

26  shall reduce any tax deficiency as derived from the sample by

27  the amount of any overpayment derived from the sample. In the

28  event the department determines from the sample results that

29  the dealer has a net tax overpayment, the department shall

30  provide the findings of this overpayment to the Chief

31  

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 1  Financial Officer Comptroller for repayment of funds paid into

 2  the State Treasury through error pursuant to s. 215.26.

 3         3.a.  A taxpayer is entitled, both in connection with

 4  an audit and in connection with an application for refund

 5  filed independently of any audit, to establish the amount of

 6  any refund or deficiency through statistical sampling when the

 7  taxpayer's records, other than those regarding fixed assets,

 8  are adequate but voluminous. Alternatively, a taxpayer is

 9  entitled to establish any refund or deficiency through any

10  other sampling method agreed upon by the taxpayer and the

11  department when the taxpayer's records, other than those

12  regarding fixed assets, are adequate but voluminous. Whether

13  done through statistical sampling or any other sampling method

14  agreed upon by the taxpayer and the department, the completed

15  sample must reflect both overpayments and underpayments of

16  taxes due. The sample shall be conducted through:

17         (I)  A taxpayer request to perform the sampling through

18  the certified audit program pursuant to s. 213.285;

19         (II)  Attestation by a certified public accountant as

20  to the adequacy of the sampling method utilized and the

21  results reached using such sampling method; or

22         (III)  A sampling method that has been submitted by the

23  taxpayer and approved by the department before a refund claim

24  is submitted. This sub-sub-subparagraph does not prohibit a

25  taxpayer from filing a refund claim prior to approval by the

26  department of the sampling method; however, a refund claim

27  submitted before the sampling method has been approved by the

28  department cannot be a complete refund application pursuant to

29  s. 213.255 until the sampling method has been approved by the

30  department.

31  

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 1         b.  The department shall prescribe by rule the

 2  procedures to be followed under each method of sampling. Such

 3  procedures shall follow generally accepted auditing procedures

 4  for sampling. The rule shall also set forth other criteria

 5  regarding the use of sampling, including, but not limited to,

 6  training requirements that must be met before a sampling

 7  method may be utilized and the steps necessary for the

 8  department and the taxpayer to reach agreement on a sampling

 9  method submitted by the taxpayer for approval by the

10  department.

11         Section 187.  Subsection (1) of section 212.20, Florida

12  Statutes, is amended to read:

13         212.20  Funds collected, disposition; additional powers

14  of department; operational expense; refund of taxes

15  adjudicated unconstitutionally collected.--

16         (1)  The department shall pay over to the Chief

17  Financial Officer Treasurer of the state all funds received

18  and collected by it under the provisions of this chapter, to

19  be credited to the account of the General Revenue Fund of the

20  state.

21         Section 188.  Subsections (4) and (6), paragraph (e) of

22  subsection (7) and subsection (13) of section 213.053, Florida

23  Statutes, are amended to read:

24         213.053  Confidentiality and information sharing.--

25         (4)  Nothing contained in this section shall prevent

26  the department from publishing statistics so classified as to

27  prevent the identification of particular accounts, reports,

28  declarations, or returns or prevent the department from

29  disclosing to the Chief Financial Officer Comptroller the

30  names and addresses of those taxpayers who have claimed an

31  

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 1  exemption pursuant to s. 199.185(1)(i) or a deduction pursuant

 2  to s. 220.63(5).

 3         (6)  Any information received by the Department of

 4  Revenue in connection with the administration of taxes,

 5  including, but not limited to, information contained in

 6  returns, reports, accounts, or declarations filed by persons

 7  subject to tax, shall be made available by the department to

 8  the Auditor General or his or her authorized agent, the

 9  director of the Office of Program Policy Analysis and

10  Government Accountability or his or her authorized agent, the

11  Chief Financial Officer Comptroller or his or her authorized

12  agent, the Director of the Office of Insurance Regulation of

13  the Financial Services Commission Insurance Commissioner or

14  his or her authorized agent, the Treasurer or his or her

15  authorized agent, or a property appraiser or tax collector or

16  their authorized agents pursuant to s. 195.084(1), in the

17  performance of their official duties, or to designated

18  employees of the Department of Education solely for

19  determination of each school district's price level index

20  pursuant to s. 1011.62(2); however, no information shall be

21  disclosed to the Auditor General or his or her authorized

22  agent, the director of the Office of Program Policy Analysis

23  and Government Accountability or his or her authorized agent,

24  the Chief Financial Officer Comptroller or his or her

25  authorized agent, the Director of the Office of Insurance

26  Regulation Insurance Commissioner or his or her authorized

27  agent, the Treasurer or his or her authorized agent, or to a

28  property appraiser or tax collector or their authorized

29  agents, or to designated employees of the Department of

30  Education if such disclosure is prohibited by federal law. The

31  Auditor General or his or her authorized agent, the director

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 1  of the Office of Program Policy Analysis and Government

 2  Accountability or his or her authorized agent, the Chief

 3  Financial Officer Comptroller or his or her authorized agent,

 4  the Director of the Office of Insurance Regulation Treasurer

 5  or his or her authorized agent, and the property appraiser or

 6  tax collector and their authorized agents, or designated

 7  employees of the Department of Education shall be subject to

 8  the same requirements of confidentiality and the same

 9  penalties for violation of the requirements as the department.

10  For the purpose of this subsection, "designated employees of

11  the Department of Education" means only those employees

12  directly responsible for calculation of price level indices

13  pursuant to s. 1011.62(2). It does not include the supervisors

14  of such employees or any other employees or elected officials

15  within the Department of Education.

16         (7)  Notwithstanding any other provision of this

17  section, the department may provide:

18         (e)  Names, addresses, taxpayer identification numbers,

19  and outstanding tax liabilities to the Department of the

20  Lottery and the Office of Financial Institutions and

21  Securities Regulation of the Financial Services Commission

22  Department of Banking and Finance in the conduct of their

23  official duties.

24  

25  Disclosure of information under this subsection shall be

26  pursuant to a written agreement between the executive director

27  and the agency.  Such agencies, governmental or

28  nongovernmental, shall be bound by the same requirements of

29  confidentiality as the Department of Revenue.  Breach of

30  confidentiality is a misdemeanor of the first degree,

31  punishable as provided by s. 775.082 or s. 775.083.

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 1         (13)  Notwithstanding the provisions of s. 896.102(2),

 2  the department may allow full access to the information and

 3  documents required to be filed with it under s. 896.102(1) to

 4  federal, state, and local law enforcement and prosecutorial

 5  agencies, and to the Office of Financial Institutions and

 6  Securities Regulation of the Financial Services Commission

 7  Department of Banking and Finance, and any of those agencies

 8  may use the information and documents in any civil or criminal

 9  investigation and in any court proceedings.

10         Section 189.  Section 213.054, Florida Statutes, is

11  amended to read:

12         213.054  Persons claiming tax exemptions or deductions;

13  annual report.--The Department of Revenue shall be responsible

14  for monitoring the utilization of tax exemptions and tax

15  deductions authorized pursuant to chapter 81-179, Laws of

16  Florida.  On or before September 1 of each year, the

17  department shall report to the Chief Financial Officer

18  Comptroller the names and addresses of all persons who have

19  claimed an exemption pursuant to s. 199.185(1)(i) or a

20  deduction pursuant to s. 220.63(5).

21         Section 190.  Subsection (6) of section 213.255,

22  Florida Statutes, is amended to read:

23         213.255  Interest.--Interest shall be paid on

24  overpayments of taxes, payment of taxes not due, or taxes paid

25  in error, subject to the following conditions:

26         (6)  Interest shall be paid until a date determined by

27  the department which shall be no more than 7 days prior to the

28  date of the issuance of the refund warrant by the Chief

29  Financial Officer Comptroller.

30         Section 191.  Subsection (9) of section 213.67, Florida

31  Statutes, is amended to read:

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 1         213.67  Garnishment.--

 2         (9)  The department shall provide notice to the Chief

 3  Financial Officer Comptroller, in electronic or other form

 4  specified by the Chief Financial Officer Comptroller, listing

 5  the taxpayers for which tax warrants are outstanding. Pursuant

 6  to subsection (1), the Chief Financial Officer Comptroller

 7  shall, upon notice from the department, withhold all payments

 8  to any person or business, as defined in s. 212.02, which

 9  provides commodities or services to the state, leases real

10  property to the state, or constructs a public building or

11  public work for the state. The department may levy upon the

12  withheld payments in accordance with subsection (3). The

13  provisions of s. 215.422 do not apply from the date the notice

14  is filed with the Chief Financial Officer Comptroller until

15  the date the department notifies the Chief Financial Officer

16  Comptroller of its consent to make payment to the person or 60

17  days after receipt of the department's notice in accordance

18  with subsection (1), whichever occurs earlier.

19         Section 192.  Subsection (4) of section 213.75, Florida

20  Statutes, is amended to read:

21         213.75  Application of payments.--

22         (4)  Any surplus proceeds remaining after the

23  application of subsection (3) shall, upon application and

24  satisfactory proof thereof, be refunded by the Chief Financial

25  Officer Comptroller to the person or persons legally entitled

26  thereto pursuant to s. 215.26.

27         Section 193.  Section 215.02, Florida Statutes, is

28  amended to read:

29         215.02  Manner of paying money into the

30  Treasury.--Whenever any officer of this state or other person

31  desires to pay any money into the Treasury of the state on

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 1  account of his or her indebtedness to the state, the person

 2  shall first go to into the Department of Financial Services

 3  Banking and Finance, and there ascertain from the department's

 4  books the amount of his or her indebtedness to the state, and

 5  thereupon the department shall give that person a memorandum

 6  or certificate of the amount of such indebtedness, and on what

 7  account.  Second, the person shall take said certificate with

 8  him or her to the Department of Insurance and deliver the same

 9  and pay over to the Chief Financial Officer Insurance

10  Commissioner and Treasurer the amount ascertained called for

11  in said certificate.  Third, The Chief Financial Officer

12  Insurance Commissioner and Treasurer shall receive the money,

13  make a proper entry thereof, file the certificate of the

14  Department of Banking and Finance, and give a certificate to

15  the party paying over the money, acknowledging the receipt of

16  the money, and on what account; which certificate thus

17  received, the party shall return to the Department of Banking

18  and Finance, on receipt of which the department shall give the

19  party a receipt for the amount, and enter a credit on the

20  party's account in his or her books for the amount thus paid

21  by him or her to the Insurance Commissioner and Treasurer, and

22  file the certificate received from the Insurance Commissioner

23  and Treasurer.

24         Section 194.  Section 215.03, Florida Statutes, is

25  amended to read:

26         215.03  Party to be reimbursed on reversal of judgment

27  for state.--Whenever upon appeal in civil cases, any judgment

28  in favor of the state has been or shall be reversed and set

29  aside, which may have been paid in part by the appellant, the

30  Chief Financial Officer Comptroller shall issue his or her

31  warrant upon the Treasurer to reimburse the appellant for all

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 1  sums paid in discharge of such judgment and cost, provided the

 2  appellant shall adduce satisfactory evidence to the Chief

 3  Financial Officer Comptroller of the sums paid as aforesaid.

 4         Section 195.  Section 215.04, Florida Statutes, is

 5  amended to read:

 6         215.04  Department of Financial Services Banking and

 7  Finance to report delinquents.--The Department of Financial

 8  Services Banking and Finance shall report to the state

 9  attorney of the proper circuit the name of any delinquent

10  officer whose delinquency concerns the department, so soon as

11  such delinquency shall occur; and the state attorney shall

12  proceed forthwith against such delinquent.

13         Section 196.  Section 215.05, Florida Statutes, is

14  amended to read:

15         215.05  Department of Financial Services Banking and

16  Finance to certify accounts of delinquents.--When any revenue

17  officer or other person accountable for public money shall

18  neglect or refuse to pay into the treasury the sum or balance

19  reported to be due to the state, upon the adjustment of that

20  person's account, the Department of Financial Services Banking

21  and Finance shall immediately hand over to the state attorney

22  of the proper circuit the statement of the sum or balance

23  certified under its seal of office, so due; and the state

24  attorney shall institute suit for the recovery of the same,

25  adding to the sum or balance stated to be due on such account

26  the commissions of the delinquent, which shall be forfeited in

27  every instance where suit is commenced and judgment is

28  obtained thereon, and an interest of 8 percent per annum from

29  the time of the delinquent's receiving the money until it

30  shall be paid into the State Treasury.

31  

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 1         Section 197.  Section 215.11, Florida Statutes, is

 2  amended to read:

 3         215.11  Defaulting officers; Department of Financial

 4  Services Banking and Finance to report to clerk.--The

 5  Department of Financial Services Banking and Finance shall,

 6  within 90 days after the expiration of the term of office of

 7  any tax collector, sheriff, clerk of the circuit or county

 8  court, treasurer, or any other officer of any county who has

 9  the collection, custody, and control of any state funds, who

10  shall be in arrears in his or her accounts with the state,

11  make up and forward to the clerk of the circuit court of such

12  county a statement of his or her accounts with the state.

13         Section 198.  Paragraphs (d), (n), and (o) of

14  subsection (4) of section 215.20, Florida Statutes, are

15  amended, and paragraphs (p) through (y) of that subsection are

16  renumbered as paragraphs (o) through (x), respectively, to

17  read:

18         215.20  Certain income and certain trust funds to

19  contribute to the General Revenue Fund.--

20         (4)  The income of a revenue nature deposited in the

21  following described trust funds, by whatever name designated,

22  is that from which the appropriations authorized by subsection

23  (3) shall be made:

24         (d)  Within the Office of Financial Institutions and

25  Securities Regulation of the Financial Services Commission

26  Department of Banking and Finance:

27         1.  The Administrative Trust Fund.

28         2.  The Anti-Fraud Trust Fund.

29         3.  The Financial Institutions' Regulatory Trust Fund.

30         4.  The Mortgage Brokerage Guaranty Fund.

31         5.  The Regulatory Trust Fund.

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 1         (n)  Within the Department of Financial Services

 2  Insurance:

 3         1.  The Agents and Solicitors County Tax Trust Fund.

 4         2.  The Insurance Commissioner's Regulatory Trust Fund.

 5         (o)  Within the Department of Labor and Employment

 6  Security or, if such department is terminated, within the

 7  agency or department to which the named trust fund has been

 8  transferred:

 9         3.1.  The Special Disability Trust Fund.

10         4.2.  The Special Employment Security Administration

11  Trust Fund.

12         5.3.  The Workers' Compensation Administration Trust

13  Fund.

14         (o)(p)  Within the Department of Legal Affairs, the

15  Crimes Compensation Trust Fund.

16         (p)(q)  Within the Department of Management Services:

17         1.  The Administrative Trust Fund.

18         2.  The Architects Incidental Trust Fund.

19         3.  The Bureau of Aircraft Trust Fund.

20         4.  The Florida Facilities Pool Working Capital Trust

21  Fund.

22         5.  The Grants and Donations Trust Fund.

23         6.  The Motor Vehicle Operating Trust Fund.

24         7.  The Police and Firefighters' Premium Tax Trust

25  Fund.

26         8.  The Public Employees Relations Commission Trust

27  Fund.

28         9.  The State Personnel System Trust Fund.

29         10.  The Supervision Trust Fund.

30         11.  The Working Capital Trust Fund.

31         (q)(r)  Within the Department of Revenue:

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 1         1.  The Additional Court Cost Clearing Trust Fund.

 2         2.  The Administrative Trust Fund.

 3         3.  The Apalachicola Bay Oyster Surcharge Clearing

 4  Trust Fund.

 5         4.  The Certification Program Trust Fund.

 6         5.  The Fuel Tax Collection Trust Fund.

 7         6.  The Land Reclamation Trust Fund.

 8         7.  The Local Alternative Fuel User Fee Clearing Trust

 9  Fund.

10         8.  The Local Option Fuel Tax Trust Fund.

11         9.  The Motor Vehicle Rental Surcharge Clearing Trust

12  Fund.

13         10.  The Motor Vehicle Warranty Trust Fund.

14         11.  The Oil and Gas Tax Trust Fund.

15         12.  The Secondhand Dealer and Secondary Metals

16  Recycler Clearing Trust Fund.

17         13.  The Severance Tax Solid Mineral Trust Fund.

18         14.  The State Alternative Fuel User Fee Clearing Trust

19  Fund.

20         15.  All taxes levied on motor fuels other than

21  gasoline levied pursuant to the provisions of s. 206.87(1)(a).

22         (r)(s)  Within the Department of State:

23         1.  The Division of Licensing Trust Fund.

24         2.  The Records Management Trust Fund.

25         3.  The trust funds administered by the Division of

26  Historical Resources.

27         (s)(t)  Within the Department of Transportation, all

28  income derived from outdoor advertising and overweight

29  violations which is deposited in the State Transportation

30  Trust Fund.

31         (t)(u)  Within the Department of Veterans' Affairs:

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 1         1.  The Grants and Donations Trust Fund.

 2         2.  The Operations and Maintenance Trust Fund.

 3         3.  The State Homes for Veterans Trust Fund.

 4         (u)(v)  Within the Division of Administrative Hearings,

 5  the Administrative Trust Fund.

 6         (v)(w)  Within the Fish and Wildlife Conservation

 7  Commission:

 8         1.  The Conservation and Recreation Lands Program Trust

 9  Fund.

10         2.  The Florida Panther Research and Management Trust

11  Fund.

12         3.  The Land Acquisition Trust Fund.

13         4.  The Marine Resources Conservation Trust Fund, with

14  the exception of those fees collected for recreational

15  saltwater fishing licenses as provided in s. 372.57.

16         (w)(x)  Within the Florida Public Service Commission,

17  the Florida Public Service Regulatory Trust Fund.

18         (x)(y)  Within the Justice Administrative Commission,

19  the Indigent Criminal Defense Trust Fund.

20  

21  The enumeration of the foregoing moneys or trust funds shall

22  not prohibit the applicability thereto of s. 215.24 should the

23  Governor determine that for the reasons mentioned in s. 215.24

24  the money or trust funds should be exempt herefrom, as it is

25  the purpose of this law to exempt income from its force and

26  effect when, by the operation of this law, federal matching

27  funds or contributions or private grants to any trust fund

28  would be lost to the state.

29         Section 199.  Effective July 1, 2003, paragraph (cc) of

30  subsection (4) of section 215.20, Florida Statutes, is amended

31  to read:

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 1         215.20  Certain income and certain trust funds to

 2  contribute to the General Revenue Fund.--

 3         (4)  The income of a revenue nature deposited in the

 4  following described trust funds, by whatever name designated,

 5  is that from which the deductions authorized by subsection (3)

 6  shall be made:

 7         (a)  The Fuel Tax Collection Trust Fund created by s.

 8  206.875.

 9         (b)  All income derived from outdoor advertising and

10  overweight violations which is deposited in the State

11  Transportation Trust Fund created by s. 206.46.

12         (c)  All taxes levied on motor fuels other than

13  gasoline levied pursuant to the provisions of s. 206.87(1)(a).

14         (d)  The State Alternative Fuel User Fee Clearing Trust

15  Fund established pursuant to s. 206.879(1).

16         (e)  The Local Alternative Fuel User Fee Clearing Trust

17  Fund established pursuant to s. 206.879(2).

18         (f)  The Cigarette Tax Collection Trust Fund created by

19  s. 210.20.

20         (g)  The Nonmandatory Land Reclamation Trust Fund

21  established pursuant to s. 211.3103.

22         (h)  The Phosphate Research Trust Fund established

23  pursuant to s. 211.3103.

24         (i)  The Land Reclamation Trust Fund established

25  pursuant to s. 211.32(1)(f).

26         (j)  The Educational Certification and Service Trust

27  Fund created by s. 1012.59.

28         (k)  The trust funds administered by the Division of

29  Historical Resources of the Department of State.

30         (l)  The Marine Resources Conservation Trust Fund

31  created by s. 370.0603, with the exception of those fees

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 1  collected for recreational saltwater fishing licenses as

 2  provided in s. 372.57.

 3         (m)  The Local Option Fuel Tax Trust Fund created

 4  pursuant to s. 336.025.

 5         (n)  The Florida Public Service Regulatory Trust Fund

 6  established pursuant to s. 350.113.

 7         (o)  The State Game Trust Fund established by s.

 8  372.09.

 9         (p)  The Special Disability Trust Fund created by s.

10  440.49.

11         (q)  The Workers' Compensation Administration Trust

12  Fund created by s. 440.50(1)(a).

13         (r)  The Employment Security Administration Trust Fund

14  created by s. 443.211(1).

15         (s)  The Special Employment Security Administration

16  Trust Fund created by s. 443.211(2).

17         (t)  The Professional Regulation Trust Fund established

18  pursuant to s. 455.219.

19         (u)  The Speech-Language Pathology and Audiology Trust

20  Fund.

21         (v)  The Division of Licensing Trust Fund established

22  pursuant to s. 493.6117.

23         (w)  The Division of Florida Land Sales, Condominiums,

24  and Mobile Homes Trust Fund established pursuant to s.

25  498.019.

26         (x)  The trust fund of the Division of Hotels and

27  Restaurants, as defined in s. 509.072, with the exception of

28  those fees collected for the purpose of funding of the

29  hospitality education program as stated in s. 509.302.

30  

31  

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 1         (y)  The trust funds administered by the Division of

 2  Pari-mutuel Wagering and the Florida Quarter Horse Racing

 3  Promotion Trust Fund.

 4         (z)  The General Inspection Trust Fund and subsidiary

 5  accounts thereof, unless a different percentage is authorized

 6  by s. 570.20.

 7         (aa)  The Florida Citrus Advertising Trust Fund created

 8  by s. 601.15(7), including transfers from any subsidiary

 9  accounts thereof, unless a different percentage is authorized

10  in that section.

11         (bb)  The Agents and Solicitors County Tax Trust Fund

12  created by s. 624.506.

13         (cc)  The Insurance Commissioner's Regulatory Trust

14  Fund created by s. 624.523.

15         (dd)  The Financial Institutions' Regulatory Trust Fund

16  established pursuant to s. 655.049.

17         (ee)  The Crimes Compensation Trust Fund established

18  pursuant to s. 960.21.

19         (ff)  The Records Management Trust Fund established

20  pursuant to s. 257.375.

21         (gg)  The Alcoholic Beverage and Tobacco Trust Fund

22  established pursuant to s. 561.025.

23         (hh)  The Health Care Trust Fund established pursuant

24  to s. 408.16.

25         (ii)  The Police and Firefighters' Premium Tax Trust

26  Fund established within the Department of Management Services.

27  

28  The enumeration of the foregoing moneys or trust funds shall

29  not prohibit the applicability thereto of s. 215.24 should the

30  Governor determine that for the reasons mentioned in s. 215.24

31  the money or trust funds should be exempt herefrom, as it is

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 1  the purpose of this law to exempt income from its force and

 2  effect when, by the operation of this law, federal matching

 3  funds or contributions or private grants to any trust fund

 4  would be lost to the state.

 5         Section 200.  Paragraphs (e) and (g) of subsection (1)

 6  of section 215.22, Florida Statutes, are amended to read:

 7         215.22  Certain income and certain trust funds

 8  exempt.--

 9         (1)  The following income of a revenue nature or the

10  following trust funds shall be exempt from the appropriation

11  required by s. 215.20(1):

12         (e)  State, agency, or political subdivision

13  investments by the Chief Financial Officer Treasurer.

14         (g)  Self-insurance programs administered by the Chief

15  Financial Officer Treasurer.

16         Section 201.  Effective July 1, 2003, paragraphs (e)

17  and (g) of subsection (1) of section 215.22, Florida Statutes,

18  are amended to read:

19         215.22  Certain income and certain trust funds

20  exempt.--

21         (1)  The following income of a revenue nature or the

22  following trust funds shall be exempt from the deduction

23  required by s. 215.20(1):

24         (e)  State, agency, or political subdivision

25  investments by the Chief Financial Officer Treasurer.

26         (g)  Self-insurance programs administered by the Chief

27  Financial Officer Treasurer.

28         Section 202.  Section 215.23, Florida Statutes, is

29  amended to read:

30         215.23  When contributions to be made.--The deductions

31  required by s. 215.20 shall be paid into the appropriate fund

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 1  by the Department of Banking and Finance or by the Chief

 2  Financial Officer State Treasurer, as the case may be, for

 3  quarterly periods ending March 31, June 30, September 30, and

 4  December 31 of each year, and when so paid shall thereupon

 5  become a part of that fund to be accounted for and disbursed

 6  as provided by law.

 7         Section 203.  Section 215.24, Florida Statutes, is

 8  amended to read:

 9         215.24  Exemptions where federal contributions or

10  private grants.--

11         (1)  Should any state fund be the recipient of federal

12  contributions or private grants, either by the matching of

13  state funds or by a general donation to state funds, and the

14  payment of moneys into the General Revenue Fund under s.

15  215.20 should cause such fund to lose federal or private

16  assistance, the Governor shall certify to the Chief Financial

17  Officer Department of Banking and Finance and to the State

18  Treasurer that said income is for that reason exempt from the

19  force and effect of s. 215.20.

20         (2)  Should it be determined by the Governor that by

21  reason of payments already made into the General Revenue Fund

22  by any fund under this law, such fund is subject to the loss

23  of federal or private assistance, then the Governor shall

24  certify to the Chief Financial Officer Department of Banking

25  and Finance and to the State Treasurer that the income from

26  such assistance is exempt from the provisions of this law, and

27  the Chief Financial Officer Department of Banking and Finance

28  or the State Treasurer, as the case may be, shall thereupon

29  refund and pay over to such fund any amount previously paid

30  into the General Revenue Fund from such income.

31  

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 1         Section 204.  Section 215.25, Florida Statutes, is

 2  amended to read:

 3         215.25  Manner of contributions; rules and

 4  regulations.--The Chief Financial Officer is Department of

 5  Banking and Finance and the State Treasurer are hereby

 6  authorized to ascertain and determine the manner in which the

 7  required amounts shall be deducted and paid and to adopt and

 8  effectuate such rules and procedure as may be necessary for

 9  carrying out the provisions of this law.  Such rules and

10  procedure shall be approved by the Executive Office of the

11  Governor.

12         Section 205.  Subsections (1), (2), and (5) of section

13  215.26, Florida Statutes, are amended to read:

14         215.26  Repayment of funds paid into State Treasury

15  through error.--

16         (1)  The Chief Financial Officer Comptroller of the

17  state may refund to the person who paid same, or his or her

18  heirs, personal representatives, or assigns, any moneys paid

19  into the State Treasury which constitute:

20         (a)  An overpayment of any tax, license, or account

21  due;

22         (b)  A payment where no tax, license, or account is

23  due; and

24         (c)  Any payment made into the State Treasury in error;

25  

26  and if any such payment has been credited to an appropriation,

27  such appropriation shall at the time of making any such

28  refund, be charged therewith. There are appropriated from the

29  proper respective funds from time to time such sums as may be

30  necessary for such refunds.

31  

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 1         (2)  Application for refunds as provided by this

 2  section must be filed with the Chief Financial Officer

 3  Comptroller, except as otherwise provided in this subsection,

 4  within 3 years after the right to the refund has accrued or

 5  else the right is barred. Except as provided in chapter 198

 6  and s. 220.23, an application for a refund of a tax enumerated

 7  in s. 72.011, which tax was paid after September 30, 1994, and

 8  before July 1, 1999, must be filed with the Chief Financial

 9  Officer Comptroller within 5 years after the date the tax is

10  paid, and within 3 years after the date the tax was paid for

11  taxes paid on or after July 1, 1999. The Chief Financial

12  Officer Comptroller may delegate the authority to accept an

13  application for refund to any state agency, or the judicial

14  branch, vested by law with the responsibility for the

15  collection of any tax, license, or account due. The

16  application for refund must be on a form approved by the Chief

17  Financial Officer Comptroller and must be supplemented with

18  additional proof the Chief Financial Officer Comptroller deems

19  necessary to establish the claim; provided, the claim is not

20  otherwise barred under the laws of this state. Upon receipt of

21  an application for refund, the judicial branch or the state

22  agency to which the funds were paid shall make a determination

23  of the amount due. If an application for refund is denied, in

24  whole or in part, the judicial branch or such state agency

25  shall notify the applicant stating the reasons therefor. Upon

26  approval of an application for refund, the judicial branch or

27  such state agency shall furnish the Chief Financial Officer

28  Comptroller with a properly executed voucher authorizing

29  payment.

30         (5)  When a taxpayer has pursued administrative

31  remedies before the Department of Revenue pursuant to s.

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 1  213.21 and has failed to comply with the time limitations and

 2  conditions provided in ss. 72.011 and 120.80(14)(b), a claim

 3  of refund under subsection (1) shall be denied by the Chief

 4  Financial Officer Comptroller. However, the Chief Financial

 5  Officer Comptroller may entertain a claim for refund under

 6  this subsection when the taxpayer demonstrates that his or her

 7  failure to pursue remedies under chapter 72 was not due to

 8  neglect or for the purpose of delaying payment of lawfully

 9  imposed taxes and can demonstrate reasonable cause for such

10  failure.

11         Section 206.  Section 215.29, Florida Statutes, is

12  amended to read:

13         215.29  Classification of Chief Financial Officer's

14  Comptroller's warrants; report.--All disbursements made by the

15  state upon Chief Financial Officer's Comptroller's warrants

16  shall be classified according to officers, offices, bureaus,

17  divisions, boards, commissions, institutions, other agencies

18  and undertakings, or the judicial branch, and shall be further

19  classified according to personal services, contractual

20  services, commodities, current charges, current obligations,

21  capital outlays, debt payments, or investments or such

22  additional classifications as may be prescribed or authorized

23  by law.  Such detail classifications shall be printed in the

24  Chief Financial Officer's Comptroller's annual reports.

25         Section 207.  Section 215.31, Florida Statutes, is

26  amended to read:

27         215.31  State funds; deposit in State

28  Treasury.--Revenue, including licenses, fees, imposts, or

29  exactions collected or received under the authority of the

30  laws of the state by each and every state official, office,

31  employee, bureau, division, board, commission, institution,

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 1  agency, or undertaking of the state or the judicial branch

 2  shall be promptly deposited in the State Treasury, and

 3  immediately credited to the appropriate fund as herein

 4  provided, properly accounted for by the Department of

 5  Financial Services Banking and Finance as to source and no

 6  money shall be paid from the State Treasury except as

 7  appropriated and provided by the annual General Appropriations

 8  Act, or as otherwise provided by law.

 9         Section 208.  Section 215.32, Florida Statutes, is

10  amended to read:

11         215.32  State funds; segregation.--

12         (1)  All moneys received by the state shall be

13  deposited in the State Treasury unless specifically provided

14  otherwise by law and shall be deposited in and accounted for

15  by the Chief Financial Officer Treasurer and the Department of

16  Banking and Finance within the following funds, which funds

17  are hereby created and established:

18         (a)  General Revenue Fund.

19         (b)  Trust funds.

20         (c)  Working Capital Fund.

21         (d)  Budget Stabilization Fund.

22         (2)  The source and use of each of these funds shall be

23  as follows:

24         (a)  The General Revenue Fund shall consist of all

25  moneys received by the state from every source whatsoever,

26  except as provided in paragraphs (b) and (c).  Such moneys

27  shall be expended pursuant to General Revenue Fund

28  appropriations acts or transferred as provided in paragraph

29  (c).  Annually, at least 5 percent of the estimated increase

30  in General Revenue Fund receipts for the upcoming fiscal year

31  over the current year General Revenue Fund effective

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 1  appropriations shall be appropriated for state-level capital

 2  outlay, including infrastructure improvement and general

 3  renovation, maintenance, and repairs.

 4         (b)1.  The trust funds shall consist of moneys received

 5  by the state which under law or under trust agreement are

 6  segregated for a purpose authorized by law. The state agency

 7  or branch of state government receiving or collecting such

 8  moneys shall be responsible for their proper expenditure as

 9  provided by law. Upon the request of the state agency or

10  branch of state government responsible for the administration

11  of the trust fund, the Chief Financial Officer Comptroller may

12  establish accounts within the trust fund at a level considered

13  necessary for proper accountability. Once an account is

14  established within a trust fund, the Chief Financial Officer

15  Comptroller may authorize payment from that account only upon

16  determining that there is sufficient cash and releases at the

17  level of the account.

18         2.  In order to maintain a minimum number of trust

19  funds in the State Treasury, each state agency or the judicial

20  branch may consolidate, if permitted under the terms and

21  conditions of their receipt, the trust funds administered by

22  it; provided, however, the agency or judicial branch employs

23  effectively a uniform system of accounts sufficient to

24  preserve the integrity of such trust funds; and provided,

25  further, that consolidation of trust funds is approved by the

26  Governor or the Chief Justice.

27         3.  All such moneys are hereby appropriated to be

28  expended in accordance with the law or trust agreement under

29  which they were received, subject always to the provisions of

30  chapter 216 relating to the appropriation of funds and to the

31  

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 1  applicable laws relating to the deposit or expenditure of

 2  moneys in the State Treasury.

 3         4.a.  Notwithstanding any provision of law restricting

 4  the use of trust funds to specific purposes, unappropriated

 5  cash balances from selected trust funds may be authorized by

 6  the Legislature for transfer to the Budget Stabilization Fund

 7  and Working Capital Fund in the General Appropriations Act.

 8         b.  This subparagraph does not apply to trust funds

 9  required by federal programs or mandates; trust funds

10  established for bond covenants, indentures, or resolutions

11  whose revenues are legally pledged by the state or public body

12  to meet debt service or other financial requirements of any

13  debt obligations of the state or any public body; the State

14  Transportation Trust Fund; the trust fund containing the net

15  annual proceeds from the Florida Education Lotteries; the

16  Florida Retirement System Trust Fund; trust funds under the

17  management of the Board of Regents, where such trust funds are

18  for auxiliary enterprises, self-insurance, and contracts,

19  grants, and donations, as those terms are defined by general

20  law; trust funds that serve as clearing funds or accounts for

21  the Chief Financial Officer Comptroller or state agencies;

22  trust funds that account for assets held by the state in a

23  trustee capacity as an agent or fiduciary for individuals,

24  private organizations, or other governmental units; and other

25  trust funds authorized by the State Constitution.

26         (c)1.  The Budget Stabilization Fund shall consist of

27  amounts equal to at least 5 percent of net revenue collections

28  for the General Revenue Fund during the last completed fiscal

29  year. The Budget Stabilization Fund's principal balance shall

30  not exceed an amount equal to 10 percent of the last completed

31  fiscal year's net revenue collections for the General Revenue

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 1  Fund. As used in this paragraph, the term "last completed

 2  fiscal year" means the most recently completed fiscal year

 3  prior to the regular legislative session at which the

 4  Legislature considers the General Appropriations Act for the

 5  year in which the transfer to the Budget Stabilization Fund

 6  must be made under this paragraph.

 7         2.  By September 15 of each year, the Governor shall

 8  authorize the Chief Financial Officer Comptroller to transfer,

 9  and the Chief Financial Officer Comptroller shall transfer

10  pursuant to appropriations made by law, to the Budget

11  Stabilization Fund the amount of money needed for the balance

12  of that fund to equal the amount specified in subparagraph 1.,

13  less any amounts expended and not restored. The moneys needed

14  for this transfer may be appropriated by the Legislature from

15  any funds.

16         3.  Unless otherwise provided in this subparagraph, an

17  expenditure from the Budget Stabilization Fund must be

18  restored pursuant to a restoration schedule that provides for

19  making five equal annual transfers from the General Revenue

20  Fund, beginning in the fiscal year following that in which the

21  expenditure was made. For any Budget Stabilization Fund

22  expenditure, the Legislature may establish by law a different

23  restoration schedule and such change may be made at any time

24  during the restoration period. Moneys are hereby appropriated

25  for transfers pursuant to this subparagraph.

26         4.  The Budget Stabilization Fund and the Working

27  Capital Fund may be used as revolving funds for transfers as

28  provided in s. 17.61 s. 18.125; however, any interest earned

29  must be deposited in the General Revenue Fund.

30         5.  The Chief Financial Officer Comptroller and the

31  Department of Management Services shall transfer funds to

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 1  water management districts to pay eligible water management

 2  district employees for all benefits due under s. 373.6065, as

 3  long as funds remain available for the program described under

 4  s. 100.152.

 5         (d)  The Working Capital Fund shall consist of moneys

 6  in the General Revenue Fund which are in excess of the amount

 7  needed to meet General Revenue Fund appropriations for the

 8  current fiscal year. Each year, no later than the publishing

 9  date of the annual financial statements for the state by the

10  Chief Financial Officer Comptroller under s. 216.102, funds

11  shall be transferred between the Working Capital Fund and the

12  General Revenue Fund to establish the balance of the Working

13  Capital Fund for that fiscal year at the amount determined

14  pursuant to this paragraph.

15         Section 209.  Subsections (2) and (3) of section

16  215.3206, Florida Statutes, are amended to read:

17         215.3206  Trust funds; termination or re-creation.--

18         (2)  If the trust fund is terminated and not

19  immediately re-created, all cash balances and income of the

20  trust fund shall be deposited into the General Revenue Fund.

21  The agency or Chief Justice shall pay any outstanding debts of

22  the trust fund as soon as practicable, and the Chief Financial

23  Officer Comptroller shall close out and remove the trust fund

24  from the various state accounting systems, using generally

25  accepted accounting practices concerning warrants outstanding,

26  assets, and liabilities.  No appropriation or budget amendment

27  shall be construed to authorize any encumbrance of funds from

28  a trust fund after the date on which the trust fund is

29  terminated or is judicially determined to be invalid.

30         (3)  On or before September 1 of each year, the Chief

31  Financial Officer Comptroller shall submit to the Executive

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 1  Office of the Governor, the President of the Senate, and the

 2  Speaker of the House of Representatives a list of trust funds

 3  that are scheduled to terminate within 12 months after that

 4  date and also, beginning September 1, 1996, a list of all

 5  trust funds that are exempt from automatic termination

 6  pursuant to the provisions of s. 19(f)(3), Art. III of the

 7  State Constitution, listing revenues of the trust funds by

 8  major revenue category for each of the last 4 fiscal years.

 9         Section 210.  Paragraph (a) of subsection (2) of

10  section 215.3208, Florida Statutes, is amended to read:

11         215.3208  Trust funds; legislative review.--

12         (2)(a)  When the Legislature terminates a trust fund,

13  the agency or branch of state government that administers the

14  trust fund shall pay any outstanding debts or obligations of

15  the trust fund as soon as practicable, and the Chief Financial

16  Officer Comptroller shall close out and remove the trust fund

17  from the various state accounting systems, using generally

18  accepted accounting principles concerning assets, liabilities,

19  and warrants outstanding.

20         Section 211.  Subsections (2), (3), and (4) of section

21  215.322, Florida Statutes, are amended to read:

22         215.322  Acceptance of credit cards, charge cards, or

23  debit cards by state agencies, units of local government, and

24  the judicial branch.--

25         (2)  A state agency as defined in s. 216.011, or the

26  judicial branch, may accept credit cards, charge cards, or

27  debit cards in payment for goods and services with the prior

28  approval of the Chief Financial Officer Treasurer. When the

29  Internet or other related electronic methods are to be used as

30  the collection medium, the State Technology Office shall

31  review and recommend to the Chief Financial Officer Treasurer

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 1  whether to approve the request with regard to the process or

 2  procedure to be used.

 3         (3)  The Chief Financial Officer Treasurer shall adopt

 4  rules governing the establishment and acceptance of credit

 5  cards, charge cards, or debit cards by state agencies or the

 6  judicial branch, including, but not limited to, the following:

 7         (a)  Utilization of a standardized contract between the

 8  financial institution or other appropriate intermediaries and

 9  the agency or judicial branch which shall be developed by the

10  Chief Financial Officer Treasurer or approval by the Chief

11  Financial Officer Treasurer of a substitute agreement.

12         (b)  Procedures which permit an agency or officer

13  accepting payment by credit card, charge card, or debit card

14  to impose a convenience fee upon the person making the

15  payment. However, the total amount of such convenience fees

16  shall not exceed the total cost to the state agency. A

17  convenience fee is not refundable to the payor.

18  Notwithstanding the foregoing, this section shall not be

19  construed to permit surcharges on any other credit card

20  purchase in violation of s. 501.0117.

21         (c)  All service fees payable pursuant to this section

22  when practicable shall be invoiced and paid by state warrant

23  or such other manner that is satisfactory to the Chief

24  Financial Officer Comptroller in accordance with the time

25  periods specified in s. 215.422.

26         (d)  Submission of information to the Chief Financial

27  Officer Treasurer concerning the acceptance of credit cards,

28  charge cards, or debit cards by all state agencies or the

29  judicial branch.

30         (e)  A methodology for agencies to use when completing

31  the cost-benefit analysis referred to in subsection (1). The

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 1  methodology must consider all quantifiable cost reductions,

 2  other benefits to the agency, and potential impact on general

 3  revenue. The methodology must also consider nonquantifiable

 4  benefits such as the convenience to individuals and businesses

 5  that would benefit from the ability to pay for state goods and

 6  services through the use of credit cards, charge cards, and

 7  debit cards.

 8         (4)  The Chief Financial Officer may Treasurer is

 9  authorized to establish contracts with one or more financial

10  institutions, credit card companies, or other entities which

11  may lawfully provide such services, in a manner consistent

12  with chapter 287, for processing credit card, charge card, or

13  debit card collections for deposit into the State Treasury or

14  another qualified public depository.  Any state agency, or the

15  judicial branch, which accepts payment by credit card, charge

16  card, or debit card shall use at least one of the contractors

17  established by the Chief Financial Officer Treasurer unless

18  the state agency or judicial branch obtains authorization from

19  the Chief Financial Officer Treasurer to use another

20  contractor which is more advantageous to such state agency or

21  the judicial branch.  Such contracts may authorize a unit of

22  local government to use the services upon the same terms and

23  conditions for deposit of credit card, charge card, or debit

24  card transactions into its qualified public depositories.

25         Section 212.  Subsections (1) and (2) of section

26  215.34, Florida Statutes, are amended to read:

27         215.34  State funds; noncollectible items; procedure.--

28         (1)  Any check, draft, or other order for the payment

29  of money in payment of any licenses, fees, taxes, commissions,

30  or charges of any sort authorized to be made under the laws of

31  the state and deposited in the State Treasury as provided

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 1  herein, which may be returned for any reason by the bank or

 2  other payor upon which same shall have been drawn shall be

 3  forthwith returned by the Chief Financial Officer State

 4  Treasurer for collection to the state officer, the state

 5  agency, or the entity of the judicial branch making the

 6  deposit. In such case, the Chief Financial Officer may

 7  Treasurer is hereby authorized to issue a debit memorandum

 8  charging an account of the agency, officer, or entity of the

 9  judicial branch which originally received the payment.  The

10  original of the debit memorandum shall state the reason for

11  the return of the check, draft, or other order and shall

12  accompany the item being returned to the officer, agency, or

13  entity of the judicial branch being charged, and a copy of the

14  debit memorandum shall be sent to the Comptroller. The

15  officer, agency, or entity of the judicial branch receiving

16  the charged-back item shall prepare a journal transfer which

17  shall debit the charge against the fund or account to which

18  the same shall have been originally credited.  Such procedure

19  for handling noncollectible items shall not be construed as

20  paying funds out of the State Treasury without an

21  appropriation, but shall be considered as an administrative

22  procedure for the efficient handling of state records and

23  accounts.

24         (2)  Whenever a check, draft, or other order for the

25  payment of money is returned by the Chief Financial Officer

26  State Treasurer, or by a qualified public depository as

27  defined in s. 280.02, to a state officer, a state agency, or

28  the judicial branch for collection, the officer, agency, or

29  judicial branch shall add to the amount due a service fee of

30  $15 or 5 percent of the face amount of the check, draft, or

31  order, whichever is greater.  An agency or the judicial branch

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 1  may adopt a rule which prescribes a lesser maximum service

 2  fee, which shall be added to the amount due for the dishonored

 3  check, draft, or other order tendered for a particular

 4  service, license, tax, fee, or other charge, but in no event

 5  shall the fee be less than $15. The service fee shall be in

 6  addition to all other penalties imposed by law, except that

 7  when other charges or penalties are imposed by an agency

 8  related to a noncollectible item, the amount of the service

 9  fee shall not exceed $150. Proceeds from this fee shall be

10  deposited in the same fund as the collected item. Nothing in

11  this section shall be construed as authorization to deposit

12  moneys outside the State Treasury unless specifically

13  authorized by law.

14         Section 213.  Section 215.35, Florida Statutes, is

15  amended to read:

16         215.35  State funds; warrants and their issuance.--All

17  warrants issued by the Chief Financial Officer Comptroller

18  shall be numbered in chronological order commencing with

19  number one in each fiscal year and each warrant shall refer to

20  the Chief Financial Officer's Comptroller's voucher by the

21  number thereof, which voucher shall also be numbered as above

22  set forth.  Each warrant shall state the name of the payee

23  thereof and the amount allowed, and said warrant shall be

24  stated in words at length.  No warrant shall issue until same

25  has been authorized by an appropriation made by law but such

26  warrant need not state or set forth such authorization.  The

27  Chief Financial Officer Comptroller shall register and

28  maintain a record of each warrant in his or her office.  The

29  record shall show the funds, accounts, purposes, and

30  departments involved in the issuance of each warrant.  In

31  those instances where the expenditure of funds of regulatory

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 1  boards or commissions has been provided for by laws other than

 2  the annual appropriations bill, warrants shall be issued upon

 3  requisition to the Chief Financial Officer State Comptroller

 4  by the governing body of such board or commission.

 5         Section 214.  Section 215.405, Florida Statutes, is

 6  amended to read:

 7         215.405  State agencies and the judicial branch

 8  authorized to collect costs of fingerprinting.--Any state

 9  agency, or the judicial branch, exercising regulatory

10  authority and authorized to take fingerprints of persons

11  within or seeking to come within such agency's or the judicial

12  branch's regulatory power may collect from the person or

13  entity on whose behalf the fingerprints were submitted the

14  actual costs of processing such fingerprints including, but

15  not limited to, any charges imposed by the Department of Law

16  Enforcement or any agency or branch of the United States

17  Government.  This provision shall constitute express authority

18  for state agencies and the judicial branch to collect the

19  actual costs of processing the fingerprints either prior to or

20  subsequent to the actual processing and shall supersede any

21  other law to the contrary.  To administer the provisions of

22  this section, a state agency, or the judicial branch, electing

23  to collect the cost of fingerprinting is empowered to

24  promulgate and adopt rules to establish the amounts and the

25  methods of payment needed to collect such costs.  Collections

26  made under these provisions shall be deposited with the Chief

27  Financial Officer Treasurer to an appropriate trust fund

28  account to be designated by the Executive Office of the

29  Governor.

30         Section 215.  Section 215.42, Florida Statutes, is

31  amended to read:

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 1         215.42  Purchases from appropriations, proof of

 2  delivery.--The Chief Financial Officer State Comptroller may

 3  require proof, as he or she deems necessary, of delivery and

 4  receipt of purchases before honoring any voucher for payment

 5  from appropriations made in the General Appropriations Act or

 6  otherwise provided by law.

 7         Section 216.  Section 215.422, Florida Statutes, is

 8  amended to read:

 9         215.422  Warrants, vouchers, and invoices; processing

10  time limits; dispute resolution; agency or judicial branch

11  compliance.--

12         (1)  The voucher authorizing payment of an invoice

13  submitted to an agency of the state or the judicial branch,

14  required by law to be filed with the Chief Financial Officer

15  Comptroller, shall be filed with the Chief Financial Officer

16  Comptroller not later than 20 days after receipt of the

17  invoice and receipt, inspection, and approval of the goods or

18  services, except that in the case of a bona fide dispute the

19  voucher shall contain a statement of the dispute and authorize

20  payment only in the amount not disputed.  The Chief Financial

21  Officer Comptroller may establish dollar thresholds and other

22  criteria for all invoices and may delegate to a state agency

23  or the judicial branch responsibility for maintaining the

24  official vouchers and documents for invoices which do not

25  exceed the thresholds or which meet the established criteria.

26  Such records shall be maintained in accordance with the

27  requirements established by the Secretary of State.  The

28  electronic payment request transmission to the Chief Financial

29  Officer Comptroller shall constitute filing of a voucher for

30  payment of invoices for which the Chief Financial Officer

31  Comptroller has delegated to an agency custody of official

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 1  records. Approval and inspection of goods or services shall

 2  take no longer than 5 working days unless the bid

 3  specifications, purchase order, or contract specifies

 4  otherwise.  If a voucher filed within the 20-day period is

 5  returned by the Department of Financial Services Banking and

 6  Finance because of an error, it shall nevertheless be deemed

 7  timely filed.  The 20-day filing requirement may be waived in

 8  whole or in part by the Department of Financial Services

 9  Banking and Finance on a showing of exceptional circumstances

10  in accordance with rules and regulations of the department.

11  For the purposes of determining the receipt of invoice date,

12  the agency or the judicial branch is deemed to receive an

13  invoice on the date on which a proper invoice is first

14  received at the place designated by the agency or the judicial

15  branch.  The agency or the judicial branch is deemed to

16  receive an invoice on the date of the invoice if the agency or

17  the judicial branch has failed to annotate the invoice with

18  the date of receipt at the time the agency or the judicial

19  branch actually received the invoice or failed at the time the

20  order is placed or contract made to designate a specific

21  location to which the invoice must be delivered.

22         (2)  The warrant in payment of an invoice submitted to

23  an agency of the state or the judicial branch shall be issued

24  not later than 10 days after filing of the voucher authorizing

25  payment. However, this requirement may be waived in whole or

26  in part by the Department of Financial Services Banking and

27  Finance on a showing of exceptional circumstances in

28  accordance with rules and regulations of the department.  If

29  the 10-day period contains fewer than 6 working days, the

30  Department of Financial Services Banking and Finance shall be

31  deemed in compliance with this subsection if the warrant is

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 1  issued within 6 working days without regard to the actual

 2  number of calendar days. For purposes of this section, a

 3  payment is deemed to be issued on the first working day that

 4  payment is available for delivery or mailing to the vendor.

 5         (3)(a)  Each agency of the state or the judicial branch

 6  which is required by law to file vouchers with the Chief

 7  Financial Officer Comptroller shall keep a record of the date

 8  of receipt of the invoice; dates of receipt, inspection, and

 9  approval of the goods or services; date of filing of the

10  voucher; and date of issuance of the warrant in payment

11  thereof. If the voucher is not filed or the warrant is not

12  issued within the time required, an explanation in writing by

13  the agency head or the Chief Justice shall be submitted to the

14  Department of Financial Services Banking and Finance in a

15  manner prescribed by it. Agencies and the judicial branch

16  shall continue to deliver or mail state payments promptly.

17         (b)  If a warrant in payment of an invoice is not

18  issued within 40 days after receipt of the invoice and

19  receipt, inspection, and approval of the goods and services,

20  the agency or judicial branch shall pay to the vendor, in

21  addition to the amount of the invoice, interest at a rate as

22  established pursuant to s. 55.03(1) on the unpaid balance from

23  the expiration of such 40-day period until such time as the

24  warrant is issued to the vendor. Such interest shall be added

25  to the invoice at the time of submission to the Chief

26  Financial Officer Comptroller for payment whenever possible.

27  If addition of the interest penalty is not possible, the

28  agency or judicial branch shall pay the interest penalty

29  payment within 15 days after issuing the warrant. The

30  provisions of this paragraph apply only to undisputed amounts

31  for which payment has been authorized. Disputes shall be

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 1  resolved in accordance with rules developed and adopted by the

 2  Chief Justice for the judicial branch, and rules adopted by

 3  the Department of Financial Services Banking and Finance or in

 4  a formal administrative proceeding before an administrative

 5  law judge of the Division of Administrative Hearings for state

 6  agencies, provided that, for the purposes of ss. 120.569 and

 7  120.57(1), no party to a dispute involving less than $1,000 in

 8  interest penalties shall be deemed to be substantially

 9  affected by the dispute or to have a substantial interest in

10  the decision resolving the dispute. In the case of an error on

11  the part of the vendor, the 40-day period shall begin to run

12  upon receipt by the agency or the judicial branch of a

13  corrected invoice or other remedy of the error. The provisions

14  of this paragraph do not apply when the filing requirement

15  under subsection (1) or subsection (2) has been waived in

16  whole by the Department of Financial Services Banking and

17  Finance. The various state agencies and the judicial branch

18  shall be responsible for initiating the penalty payments

19  required by this subsection and shall use this subsection as

20  authority to make such payments. The budget request submitted

21  to the Legislature shall specifically disclose the amount of

22  any interest paid by any agency or the judicial branch

23  pursuant to this subsection. The temporary unavailability of

24  funds to make a timely payment due for goods or services does

25  not relieve an agency or the judicial branch from the

26  obligation to pay interest penalties under this section.

27         (c)  An agency or the judicial branch may make partial

28  payments to a contractor upon partial delivery of goods or

29  services or upon partial completion of construction when a

30  request for such partial payment is made by the contractor and

31  approved by the agency. Provisions of this section and rules

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 1  of the Department of Financial Services Banking and Finance

 2  shall apply to partial payments in the same manner as they

 3  apply to full payments.

 4         (4)  If the terms of the invoice provide a discount for

 5  payment in less than 30 days, agencies of the state and the

 6  judicial branch shall preferentially process it and use all

 7  diligence to obtain the saving by compliance with the invoice

 8  terms.

 9         (5)  All purchasing agreements between a state agency

10  or the judicial branch and a vendor, applicable to this

11  section, shall include a statement of the vendor's rights and

12  the state's responsibilities under this section.  The vendor's

13  rights shall include being provided with the telephone number

14  of the vendor ombudsman within the Department of Financial

15  Services Banking and Finance, which information shall also be

16  placed on all agency or judicial branch purchase orders.

17         (6)  The Department of Financial Services Banking and

18  Finance shall monitor each agency's and the judicial branch's

19  compliance with the time limits and interest penalty

20  provisions of this section.  The department shall provide a

21  report to an agency or to the judicial branch if the

22  department determines that the agency or the judicial branch

23  has failed to maintain an acceptable rate of compliance with

24  the time limits and interest penalty provisions of this

25  section.  The department shall establish criteria for

26  determining acceptable rates of compliance. The report shall

27  also include a list of late vouchers or payments, the amount

28  of interest owed or paid, and any corrective actions

29  recommended.  The department shall perform monitoring

30  responsibilities, pursuant to this section, using the

31  Management Services and Purchasing Subsystem or the Florida

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 1  Accounting Information Resource Subsystem provided in s.

 2  215.94.  Each agency and the judicial branch shall be

 3  responsible for the accuracy of information entered into the

 4  Management Services and Purchasing Subsystem and the Florida

 5  Accounting Information Resource Subsystem for use in this

 6  monitoring.

 7         (7)  There is created a vendor ombudsman within the

 8  Department of Financial Services Banking and Finance who shall

 9  be responsible for the following functions:

10         (a)  Performing the duties of the department pursuant

11  to subsection (6).

12         (b)  Reviewing requests for waivers due to exceptional

13  circumstances.

14         (c)  Disseminating information relative to the prompt

15  payment policies of this state and assisting vendors in

16  receiving their payments in a timely manner.

17         (d)  Performing such other duties as determined by the

18  department.

19         (8)  The Department of Financial Services Banking and

20  Finance is authorized and directed to adopt and promulgate

21  rules and regulations to implement this section and for

22  resolution of disputes involving amounts of less than $1,000

23  in interest penalties for state agencies.  No agency or the

24  judicial branch shall adopt any rule or policy that is

25  inconsistent with this section or the Department of Financial

26  Services' Banking and Finance's rules or policies.

27         (9)  Each agency and the judicial branch shall include

28  in the official position description of every officer or

29  employee who is responsible for the approval or processing of

30  vendors' invoices or distribution of warrants to vendors that

31  the requirements of this section are mandatory.

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 1         (10)  Persistent failure to comply with this section by

 2  any agency of the state or the judicial branch shall

 3  constitute good cause for discharge of employees duly found

 4  responsible, or predominantly responsible, for failure to

 5  comply.

 6         (11)  Travel and other reimbursements to state officers

 7  and employees must be the same as payments to vendors under

 8  this section, except payment of Class C travel subsistence.

 9  Class C travel subsistence shall be paid in accordance with

10  the schedule established by the Chief Financial Officer

11  Comptroller pursuant to s. 112.061(5)(b). This section does

12  not apply to payments made to state agencies, the judicial

13  branch, or the legislative branch.

14         (12)  In the event that a state agency or the judicial

15  branch contracts with a third party, uses a revolving fund, or

16  pays from a local bank account to process and pay invoices for

17  goods or services, all requirements for financial obligations

18  and time processing set forth in this section shall be

19  applicable and the state agency or the judicial branch shall

20  be responsible for paying vendors the interest assessed for

21  untimely payment. The state agency or the judicial branch may,

22  through its contract with a third party, require the third

23  party to pay interest from the third party's funds.

24         (13)  Notwithstanding the provisions of subsections (3)

25  and (12), in order to alleviate any hardship that may be

26  caused to a health care provider as a result of delay in

27  receiving reimbursement for services, any payment or payments

28  for hospital, medical, or other health care services which are

29  to be reimbursed by a state agency or the judicial branch,

30  either directly or indirectly, shall be made to the health

31  care provider not more than 35 days from the date eligibility

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 1  for payment of such claim is determined.  If payment is not

 2  issued to a health care provider within 35 days after the date

 3  eligibility for payment of the claim is determined, the state

 4  agency or the judicial branch shall pay the health care

 5  provider interest at a rate of 1 percent per month calculated

 6  on a calendar day basis on the unpaid balance from the

 7  expiration of such 35-day period until such time as payment is

 8  made to the health care provider, unless a waiver in whole has

 9  been granted by the Department of Financial Services Banking

10  and Finance pursuant to subsection (1) or subsection (2).

11         (14)  The Chief Financial Officer Comptroller may adopt

12  rules to authorize advance payments for goods and services,

13  including, but not limited to, maintenance agreements and

14  subscriptions.  Such rules shall provide objective criteria

15  for determining when it is in the best interest of the state

16  to make payments in advance and shall also provide for

17  adequate protection to ensure that such goods or services will

18  be provided.

19         (15)  Nothing contained in this section shall be

20  construed to be an appropriation.  Any interest which becomes

21  due and owing pursuant to this section shall only be payable

22  from the appropriation charged for such goods or services.

23         (16)  Notwithstanding the provisions of s. 24.120(3),

24  applicable to warrants issued for payment of invoices

25  submitted by the Department of the Lottery, the Chief

26  Financial Officer Comptroller may, by written agreement with

27  the Department of the Lottery, establish a shorter time

28  requirement than the 10 days provided in subsection (2) for

29  warrants issued for payment.  Pursuant to such written

30  agreement, the Department of the Lottery shall reimburse the

31  

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 1  Chief Financial Officer Comptroller for costs associated with

 2  processing invoices under the agreement.

 3         Section 217.  Section 215.50, Florida Statutes, is

 4  amended to read:

 5         215.50  Custody of securities purchased; income.--

 6         (1)  All securities purchased or held may, with the

 7  approval of the board, be in the custody of the Chief

 8  Financial Officer Treasurer or the Chief Financial Officer

 9  Treasurer as treasurer ex officio of the board, or be

10  deposited with a bank or trust company to be held in

11  safekeeping by such bank or trust company for the collection

12  of principal and interest or of the proceeds of the sale

13  thereof.

14         (2)  It shall be the duty of the board or of the Chief

15  Financial Officer Treasurer, as custodian of the securities of

16  the board, to collect the interest or other income on, and the

17  principal of, such securities in their custody as the sums

18  become due and payable and to pay the same, when so collected,

19  into the investment account of the fund to which the

20  investments belong.

21         (3)  The Chief Financial Officer Treasurer, as

22  custodian of securities owned by the Florida Retirement System

23  Trust Fund and the Florida Survivor Benefit Trust Fund, shall

24  collect the interest, dividends, prepayments, maturities,

25  proceeds from sales, and other income accruing from such

26  assets.  As such income is collected by the Chief Financial

27  Officer Treasurer, it shall be deposited directly into a

28  commercial bank to the credit of the State Board of

29  Administration.  Such bank accounts as may be required for

30  this purpose shall offer satisfactory collateral security as

31  provided by chapter 280.  In the event funds so deposited

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 1  according to the provisions of this section are required for

 2  the purpose of paying benefits or other operational needs, the

 3  State Board of Administration shall remit to the Florida

 4  Retirement System Trust Fund in the State Treasury such

 5  amounts as may be requested by the Department of Management

 6  Services.

 7         (4)  Securities that the board selects to use for

 8  options operations under s. 215.45 or for lending under s.

 9  215.47(16) shall be registered by the Chief Financial Officer

10  Treasurer in the name of a third-party nominee in order to

11  facilitate such operations.

12         Section 218.  Section 215.551, Florida Statutes, is

13  amended to read:

14         215.551  Federal Use of State Lands Trust Fund; county

15  distribution.--

16         (1)  The Chief Financial Officer Comptroller may make

17  distribution of the Federal Use of State Lands Trust Fund,

18  when so requested by the counties in interest, of such amounts

19  as may be accumulated in that fund.

20         (2)  The Chief Financial Officer Comptroller shall

21  ascertain, from the records of the General Land Office or

22  other departments in Washington, D.C., the number of acres of

23  land situated in the several counties in which the

24  Apalachicola, Choctawhatchee, Ocala, and Osceola Forest

25  Reserves are located, the number of acres of land of such

26  forest reserve embraced in each of the counties in each of the

27  reserves, and, also, the amount of money received by the

28  United States Government from each of the reserves,

29  respectively.  The Chief Financial Officer Comptroller shall

30  apportion the money on hand to each county in each reserve,

31  respectively and separately; such distribution shall be based

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 1  upon the number of acres of land embraced in the Apalachicola

 2  Forest, Choctawhatchee Forest, Ocala Forest, and Osceola

 3  Forest, respectively, in each county and shall be further

 4  based upon the amount collected by the United States from each

 5  of such forests, so that such distribution, when made, will

 6  include for each county the amount due each county, based upon

 7  the receipts for the particular forest and the acreage in the

 8  particular county in which such forest is located.  The Chief

 9  Financial Officer Comptroller shall issue two warrants on the

10  Treasurer in each case, the sum of which shall be the amount

11  due each of such counties from the fund.  One warrant shall be

12  payable to the county for the county general road fund, and

13  one warrant, of equal amount, shall be payable to such

14  county's district school board for the district school fund.

15         (3)  In the event that actual figures of receipts from

16  different reserves cannot be obtained by counties, so as to

17  fully comply with subsections (1) and (2), the Chief Financial

18  Officer Comptroller may adjust the matter according to the

19  United States statutes, or as may appear to him or her to be

20  just and fair, and with the approval of all counties in

21  interest.

22         (4)  The moneys that may be received and credited to

23  the Federal Use of State Lands Trust Fund are appropriated for

24  the payment of the warrants of the Chief Financial Officer

25  Comptroller drawn on the Treasurer in pursuance of this

26  section.

27         Section 219.  Section 215.552, Florida Statutes, is

28  amended to read:

29         215.552  Federal Use of State Lands Trust Fund; land

30  within military installations; county distribution.--The Chief

31  Financial Officer Comptroller shall distribute moneys from the

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 1  Federal Use of State Lands Trust Fund when so requested by the

 2  counties so affected.  The Chief Financial Officer Comptroller

 3  shall apportion the money on hand equal to the percentage of

 4  land in each county within each military installation, and the

 5  amount so apportioned to each county shall be applied by such

 6  counties equally divided between the district school fund and

 7  the general road fund of such counties.

 8         Section 220.  Paragraph (c) of subsection (2),

 9  paragraph (d) of subsection (4), and paragraphs (a), (b), and

10  (c) of subsection (6) of section 215.555, Florida Statutes,

11  are amended to read:

12         215.555  Florida Hurricane Catastrophe Fund.--

13         (2)  DEFINITIONS.--As used in this section:

14         (c)  "Covered policy" means any insurance policy

15  covering residential property in this state, including, but

16  not limited to, any homeowner's, mobile home owner's, farm

17  owner's, condominium association, condominium unit owner's,

18  tenant's, or apartment building policy, or any other policy

19  covering a residential structure or its contents issued by any

20  authorized insurer, including any joint underwriting

21  association or similar entity created pursuant to law. The

22  term "covered policy" includes any collateral protection

23  insurance policy covering personal residences which protects

24  both the borrower's and the lender's financial interests, in

25  an amount at least equal to the coverage for the dwelling in

26  place under the lapsed homeowner's policy, if such policy can

27  be accurately reported as required in subsection (5).

28  Additionally, covered policies include policies covering the

29  peril of wind removed from the Florida Residential Property

30  and Casualty Joint Underwriting Association or from the

31  Citizens Property Insurance Corporation, created pursuant to

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 1  s. 627.351(6), or from the Florida Windstorm Underwriting

 2  Association, created pursuant to s. 627.351(2), by an

 3  authorized insurer under the terms and conditions of an

 4  executed assumption agreement between the authorized insurer

 5  and either such association. Each assumption agreement between

 6  the either association and such authorized insurer must be

 7  approved by the Florida Department of Insurance or the Office

 8  of Insurance Regulation prior to the effective date of the

 9  assumption, and the Department of Insurance or the Office of

10  Insurance Regulation must provide written notification to the

11  board within 15 working days after such approval. "Covered

12  policy" does not include any policy that excludes wind

13  coverage or hurricane coverage or any reinsurance agreement

14  and does not include any policy otherwise meeting this

15  definition which is issued by a surplus lines insurer or a

16  reinsurer.

17         (4)  REIMBURSEMENT CONTRACTS.--

18         (d)1.  For purposes of determining potential liability

19  and to aid in the sound administration of the fund, the

20  contract shall require each insurer to report such insurer's

21  losses from each covered event on an interim basis, as

22  directed by the board.  The contract shall require the insurer

23  to report to the board no later than December 31 of each year,

24  and quarterly thereafter, its reimbursable losses from covered

25  events for the year. The contract shall require the board to

26  determine and pay, as soon as practicable after receiving

27  these reports of reimbursable losses, the initial amount of

28  reimbursement due and adjustments to this amount based on

29  later loss information. The adjustments to reimbursement

30  amounts shall require the board to pay, or the insurer to

31  

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 1  return, amounts reflecting the most recent calculation of

 2  losses.

 3         2.  In determining reimbursements pursuant to this

 4  subsection, the contract shall provide that the board shall:

 5         a.  First reimburse insurers writing covered policies,

 6  which insurers are in full compliance with this section and

 7  have petitioned the Office of Insurance Regulation Department

 8  of Insurance and qualified as limited apportionment companies

 9  under s. 627.351(2)(b)3.  The amount of such reimbursement

10  shall be the lesser of $10 million or an amount equal to 10

11  times the insurer's reimbursement premium for the current

12  year.  The amount of reimbursement paid under this

13  sub-subparagraph may not exceed the full amount of

14  reimbursement promised in the reimbursement contract. This

15  sub-subparagraph does not apply with respect to any contract

16  year in which the year-end projected cash balance of the fund,

17  exclusive of any bonding capacity of the fund, exceeds $2

18  billion. Only one member of any insurer group may receive

19  reimbursement under this sub-subparagraph.

20         b.  Next pay to each insurer such insurer's projected

21  payout, which is the amount of reimbursement it is owed, up to

22  an amount equal to the insurer's share of the actual premium

23  paid for that contract year, multiplied by the actual

24  claims-paying capacity available for that contract year;

25  provided, entities created pursuant to s. 627.351 shall be

26  further reimbursed in accordance with sub-subparagraph c.

27         c.  Thereafter, establish, based on reimbursable

28  losses, the prorated reimbursement level at the highest level

29  for which any remaining fund balance or bond proceeds are

30  sufficient to reimburse entities created pursuant to s.

31  

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 1  627.351 for losses exceeding the amounts payable pursuant to

 2  sub-subparagraph b. for the current contract year.

 3         (6)  REVENUE BONDS.--

 4         (a)  General provisions.--

 5         1.  Upon the occurrence of a hurricane and a

 6  determination that the moneys in the fund are or will be

 7  insufficient to pay reimbursement at the levels promised in

 8  the reimbursement contracts, the board may take the necessary

 9  steps under paragraph (b) or paragraph (c) for the issuance of

10  revenue bonds for the benefit of the fund.  The proceeds of

11  such revenue bonds may be used to make reimbursement payments

12  under reimbursement contracts; to refinance or replace

13  previously existing borrowings or financial arrangements; to

14  pay interest on bonds; to fund reserves for the bonds; to pay

15  expenses incident to the issuance or sale of any bond issued

16  under this section, including costs of validating, printing,

17  and delivering the bonds, costs of printing the official

18  statement, costs of publishing notices of sale of the bonds,

19  and related administrative expenses; or for such other

20  purposes related to the financial obligations of the fund as

21  the board may determine. The term of the bonds may not exceed

22  30 years. The board may pledge or authorize the corporation to

23  pledge all or a portion of all revenues under subsection (5)

24  and under subparagraph 3. to secure such revenue bonds and the

25  board may execute such agreements between the board and the

26  issuer of any revenue bonds and providers of other financing

27  arrangements under paragraph (7)(b) as the board deems

28  necessary to evidence, secure, preserve, and protect such

29  pledge. If reimbursement premiums received under subsection

30  (5) or earnings on such premiums are used to pay debt service

31  on revenue bonds, such premiums and earnings shall be used

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 1  only after the use of the moneys derived from assessments

 2  under subparagraph 3.  The funds, credit, property, or taxing

 3  power of the state or political subdivisions of the state

 4  shall not be pledged for the payment of such bonds. The board

 5  may also enter into agreements under paragraph (b) or

 6  paragraph (c) for the purpose of issuing revenue bonds in the

 7  absence of a hurricane upon a determination that such action

 8  would maximize the ability of the fund to meet future

 9  obligations.

10         2.  The Legislature finds and declares that the

11  issuance of bonds under this subsection is for the public

12  purpose of paying the proceeds of the bonds to insurers,

13  thereby enabling insurers to pay the claims of policyholders

14  to assure that policyholders are able to pay the cost of

15  construction, reconstruction, repair, restoration, and other

16  costs associated with damage to property of policyholders of

17  covered policies after the occurrence of a hurricane. Revenue

18  bonds may not be issued under this subsection until validated

19  under chapter 75. The validation of at least the first

20  obligations incurred pursuant to this subsection shall be

21  appealed to the Supreme Court, to be handled on an expedited

22  basis.

23         3.  If the board determines that the amount of revenue

24  produced under subsection (5) is insufficient to fund the

25  obligations, costs, and expenses of the fund and the

26  corporation, including repayment of revenue bonds, the board

27  shall direct the Office of Insurance Regulation Department of

28  Insurance to levy an emergency assessment on each insurer

29  writing property and casualty business in this state. Pursuant

30  to the emergency assessment, each such insurer shall pay to

31  the corporation by July 1 of each year an amount set by the

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 1  board not exceeding 2 percent of its gross direct written

 2  premium for the prior year from all property and casualty

 3  business in this state except for workers' compensation,

 4  except that, if the Governor has declared a state of emergency

 5  under s. 252.36 due to the occurrence of a covered event, the

 6  amount of the assessment for the contract year may be

 7  increased to an amount not exceeding 4 percent of such

 8  premium. Any assessment authority not used for the contract

 9  year may be used for a subsequent contract year. If, for a

10  subsequent contract year, the board determines that the amount

11  of revenue produced under subsection (5) is insufficient to

12  fund the obligations, costs, and expenses of the fund and the

13  corporation, including repayment of revenue bonds for that

14  contract year, the board shall direct the Office of Insurance

15  Regulation Department of Insurance to levy an emergency

16  assessment up to an amount not exceeding the amount of unused

17  assessment authority from a previous contract year or years,

18  plus an additional 2 percent if the Governor has declared a

19  state of emergency under s. 252.36 due to the occurrence of a

20  covered event. Any assessment authority not used for the

21  contract year may be used for a subsequent contract year. As

22  used in this subsection, the term "property and casualty

23  business" includes all lines of business identified on Form 2,

24  Exhibit of Premiums and Losses, in the annual statement

25  required by s. 624.424 and any rules adopted under such

26  section, except for those lines identified as accident and

27  health insurance. The annual assessments under this

28  subparagraph shall continue as long as the revenue bonds

29  issued with respect to which the assessment was imposed are

30  outstanding, unless adequate provision has been made for the

31  payment of such bonds pursuant to the documents authorizing

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 1  issuance of the bonds.  An insurer shall not at any time be

 2  subject to aggregate annual assessments under this

 3  subparagraph of more than 2 percent of premium, except that in

 4  the case of a declared emergency, an insurer shall not at any

 5  time be subject to aggregate annual assessments under this

 6  subparagraph of more than 6 percent of premium; provided, no

 7  more than 4 percent may be assessed for any one contract year.

 8  Any rate filing or portion of a rate filing reflecting a rate

 9  change attributable entirely to the assessment levied under

10  this subparagraph shall be deemed approved when made, subject

11  to the authority of the Office of Insurance Regulation

12  Department of Insurance to require actuarial justification as

13  to the adequacy of any rate at any time.  If the rate filing

14  reflects only a rate change attributable to the assessment

15  under this paragraph, the filing may consist of a

16  certification so stating. The assessments otherwise payable to

17  the corporation pursuant to this subparagraph shall be paid

18  instead to the fund unless and until the Office of Insurance

19  Regulation Department of Insurance has received from the

20  corporation and the fund a notice, which shall be conclusive

21  and upon which the Office of Insurance Regulation Department

22  of Insurance may rely without further inquiry, that the

23  corporation has issued bonds and the fund has no agreements in

24  effect with local governments pursuant to paragraph (b).  On

25  or after the date of such notice and until such date as the

26  corporation has no bonds outstanding, the fund shall have no

27  right, title, or interest in or to the assessments, except as

28  provided in the fund's agreements with the corporation.

29         (b)  Revenue bond issuance through counties or

30  municipalities.--

31  

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 1         1.  If the board elects to enter into agreements with

 2  local governments for the issuance of revenue bonds for the

 3  benefit of the fund, the board shall enter into such contracts

 4  with one or more local governments, including agreements

 5  providing for the pledge of revenues, as are necessary to

 6  effect such issuance. The governing body of a county or

 7  municipality is authorized to issue bonds as defined in s.

 8  125.013 or s. 166.101 from time to time to fund an assistance

 9  program, in conjunction with the Florida Hurricane Catastrophe

10  Fund, for the purposes set forth in this section or for the

11  purpose of paying the costs of construction, reconstruction,

12  repair, restoration, and other costs associated with damage to

13  properties of policyholders of covered policies due to the

14  occurrence of a hurricane by assuring that policyholders

15  located in this state are able to recover claims under

16  property insurance policies after a covered event.

17         2.  In order to avoid needless and indiscriminate

18  proliferation, duplication, and fragmentation of such

19  assistance programs, any local government may provide for the

20  payment of fund reimbursements, regardless of whether or not

21  the losses for which reimbursement is made occurred within or

22  outside of the territorial jurisdiction of the local

23  government.

24         3.  The state hereby covenants with holders of bonds

25  issued under this paragraph that the state will not repeal or

26  abrogate the power of the board to direct the Office of

27  Insurance Regulation Department of Insurance to levy the

28  assessments and to collect the proceeds of the revenues

29  pledged to the payment of such bonds as long as any such bonds

30  remain outstanding unless adequate provision has been made for

31  

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 1  the payment of such bonds pursuant to the documents

 2  authorizing the issuance of such bonds.

 3         4.  There shall be no liability on the part of, and no

 4  cause of action shall arise against any members or employees

 5  of the governing body of a local government for any actions

 6  taken by them in the performance of their duties under this

 7  paragraph.

 8         (c)  Florida Hurricane Catastrophe Fund Finance

 9  Corporation.--

10         1.  In addition to the findings and declarations in

11  subsection (1), the Legislature also finds and declares that:

12         a.  The public benefits corporation created under this

13  paragraph will provide a mechanism necessary for the

14  cost-effective and efficient issuance of bonds. This mechanism

15  will eliminate unnecessary costs in the bond issuance process,

16  thereby increasing the amounts available to pay reimbursement

17  for losses to property sustained as a result of hurricane

18  damage.

19         b.  The purpose of such bonds is to fund reimbursements

20  through the Florida Hurricane Catastrophe Fund to pay for the

21  costs of construction, reconstruction, repair, restoration,

22  and other costs associated with damage to properties of

23  policyholders of covered policies due to the occurrence of a

24  hurricane.

25         c.  The efficacy of the financing mechanism will be

26  enhanced by the corporation's ownership of the assessments, by

27  the insulation of the assessments from possible bankruptcy

28  proceedings, and by covenants of the state with the

29  corporation's bondholders.

30  

31  

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 1         2.a.  There is created a public benefits corporation,

 2  which is an instrumentality of the state, to be known as the

 3  Florida Hurricane Catastrophe Fund Finance Corporation.

 4         b.  The corporation shall operate under a five-member

 5  board of directors consisting of the Governor or a designee,

 6  the Chief Financial Officer Comptroller or a designee, the

 7  Attorney General Treasurer or a designee, the director of the

 8  Division of Bond Finance of the State Board of Administration,

 9  and the senior employee of the State Board of Administration

10  responsible for operations chief operating officer of the

11  Florida Hurricane Catastrophe Fund.

12         c.  The corporation has all of the powers of

13  corporations under chapter 607 and under chapter 617, subject

14  only to the provisions of this subsection.

15         d.  The corporation may issue bonds and engage in such

16  other financial transactions as are necessary to provide

17  sufficient funds to achieve the purposes of this section.

18         e.  The corporation may invest in any of the

19  investments authorized under s. 215.47.

20         f.  There shall be no liability on the part of, and no

21  cause of action shall arise against, any board members or

22  employees of the corporation for any actions taken by them in

23  the performance of their duties under this paragraph.

24         3.a.  In actions under chapter 75 to validate any bonds

25  issued by the corporation, the notice required by s. 75.06

26  shall be published only in Leon County and in two newspapers

27  of general circulation in the state, and the complaint and

28  order of the court shall be served only on the State Attorney

29  of the Second Judicial Circuit.

30         b.  The state hereby covenants with holders of bonds of

31  the corporation that the state will not repeal or abrogate the

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 1  power of the board to direct the Office of Insurance

 2  Regulation Department of Insurance to levy the assessments and

 3  to collect the proceeds of the revenues pledged to the payment

 4  of such bonds as long as any such bonds remain outstanding

 5  unless adequate provision has been made for the payment of

 6  such bonds pursuant to the documents authorizing the issuance

 7  of such bonds.

 8         4.  The bonds of the corporation are not a debt of the

 9  state or of any political subdivision, and neither the state

10  nor any political subdivision is liable on such bonds. The

11  corporation does not have the power to pledge the credit, the

12  revenues, or the taxing power of the state or of any political

13  subdivision. The credit, revenues, or taxing power of the

14  state or of any political subdivision shall not be deemed to

15  be pledged to the payment of any bonds of the corporation.

16         5.a.  The property, revenues, and other assets of the

17  corporation; the transactions and operations of the

18  corporation and the income from such transactions and

19  operations; and all bonds issued under this paragraph and

20  interest on such bonds are exempt from taxation by the state

21  and any political subdivision, including the intangibles tax

22  under chapter 199 and the income tax under chapter 220. This

23  exemption does not apply to any tax imposed by chapter 220 on

24  interest, income, or profits on debt obligations owned by

25  corporations other than the Florida Hurricane Catastrophe Fund

26  Finance Corporation.

27         b.  All bonds of the corporation shall be and

28  constitute legal investments without limitation for all public

29  bodies of this state; for all banks, trust companies, savings

30  banks, savings associations, savings and loan associations,

31  and investment companies; for all administrators, executors,

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 1  trustees, and other fiduciaries; for all insurance companies

 2  and associations and other persons carrying on an insurance

 3  business; and for all other persons who are now or may

 4  hereafter be authorized to invest in bonds or other

 5  obligations of the state and shall be and constitute eligible

 6  securities to be deposited as collateral for the security of

 7  any state, county, municipal, or other public funds. This

 8  sub-subparagraph shall be considered as additional and

 9  supplemental authority and shall not be limited without

10  specific reference to this sub-subparagraph.

11         6.  The corporation and its corporate existence shall

12  continue until terminated by law; however, no such law shall

13  take effect as long as the corporation has bonds outstanding

14  unless adequate provision has been made for the payment of

15  such bonds pursuant to the documents authorizing the issuance

16  of such bonds. Upon termination of the existence of the

17  corporation, all of its rights and properties in excess of its

18  obligations shall pass to and be vested in the state.

19         Section 221.  Subsection (5) of section 215.559,

20  Florida Statutes, is amended to read:

21         215.559  Hurricane Loss Mitigation Program.--

22         (5)  Except for the program set forth in subsection

23  (3), the Department of Community Affairs shall develop the

24  programs set forth in this section in consultation with an

25  advisory council consisting of a representative designated by

26  the Chief Financial Officer Department of Insurance, a

27  representative designated by the Florida Home Builders

28  Association, a representative designated by the Florida

29  Insurance Council, a representative designated by the

30  Federation of Manufactured Home Owners, a representative

31  designated by the Florida Association of Counties, and a

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 1  representative designated by the Florida Manufactured Housing

 2  Association.

 3         Section 222.  Paragraph (c) of subsection (1),

 4  paragraph (b) of subsection (2), and paragraph (a) of

 5  subsection (3) of section 215.56005, Florida Statutes, are

 6  amended to read:

 7         215.56005  Tobacco Settlement Financing Corporation.--

 8         (1)  DEFINITIONS.--As used in this section:

 9         (c)  "Department" means the Department of Financial

10  Services Banking and Finance or its successor.

11         (2)  CORPORATION CREATION AND AUTHORITY.--

12         (b)  The corporation shall be governed by a board of

13  directors consisting of the Governor, the Chief Financial

14  Officer or the Chief Financial Officer's designee Treasurer,

15  the Comptroller, the Attorney General, two directors appointed

16  from the membership of the Senate by the President of the

17  Senate, and two directors appointed from the membership of the

18  House of Representatives by the Speaker of the House of

19  Representatives. On January 7, 2003, the board shall include

20  the Chief Financial Officer or the Chief Financial Officer's

21  designee, in place of the Treasurer and the Comptroller or

22  their designees. The executive director of the State Board of

23  Administration shall be the chief executive officer of the

24  corporation and shall direct and supervise the administrative

25  affairs and operation of the corporation.  The corporation

26  shall also have such other officers as may be determined by

27  the board of directors.

28         (3)  POWERS OF THE DEPARTMENT.--

29         (a)  The department is authorized, on behalf of the

30  state, to do all things necessary or desirable to assist the

31  corporation in the execution of the corporation's

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 1  responsibilities, including, but not limited to, processing

 2  budget amendments against the Department of Financial Services

 3  Banking and Finance Tobacco Settlement Clearing Trust Fund,

 4  subject to the requirements of s. 216.177, for the costs and

 5  expenses of administration of the corporation in an amount not

 6  to exceed $500,000; entering into one or more purchase

 7  agreements to sell to the corporation any or all of the

 8  state's right, title, and interest in and to the tobacco

 9  settlement agreement; executing any administrative agreements

10  with the corporation to fund the administration, operation,

11  and expenses of the corporation from moneys appropriated for

12  such purpose; and executing and delivering any and all other

13  documents and agreements necessary or desirable in connection

14  with the sale of any or all of the state's right, title, and

15  interest in and to the tobacco settlement agreement to the

16  corporation or the issuance of the bonds by the corporation.

17  The department's authority to sell any or all of the state's

18  right, title, and interest in and to the tobacco settlement

19  agreement is subject to approval by the Legislature in a

20  regular, extended, or special session.

21         Section 223.  Subsection (3) and paragraph (a) of

22  subsection (5) of section 215.5601, Florida Statutes, are

23  amended to read:

24         215.5601  Lawton Chiles Endowment Fund.--

25         (3)  LAWTON CHILES ENDOWMENT FUND; CREATION;

26  PRINCIPAL.--

27         (a)  There is created the Lawton Chiles Endowment Fund,

28  to be administered by the State Board of Administration. The

29  endowment shall serve as a clearing trust fund, not subject to

30  termination under s. 19(f), Art. III of the State

31  

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 1  Constitution. The endowment fund shall be exempt from the

 2  service charges imposed by s. 215.20.

 3         (b)  The endowment shall receive moneys from the sale

 4  of the state's right, title, and interest in and to the

 5  tobacco settlement agreement as defined in s. 215.56005,

 6  including the right to receive payments under such agreement,

 7  and from accounts transferred from the Department of Financial

 8  Services Banking and Finance Tobacco Settlement Clearing Trust

 9  Fund established under s. 17.41. Amounts to be transferred

10  from the Department of Financial Services Banking and Finance

11  Tobacco Settlement Clearing Trust Fund to the endowment shall

12  be in the following amounts for the following fiscal years:

13         1.  For fiscal year 1999-2000, $1.1 billion;

14         2.  For fiscal year 2000-2001, $200 million;

15         3.  For fiscal year 2001-2002, $200 million;

16         4.  For fiscal year 2002-2003, $200 million; and

17         (c)  Amounts to be transferred under subparagraphs

18  (b)2., 3., and 4. may be reduced by an amount equal to the

19  lesser of $200 million or the amount the endowment receives in

20  that fiscal year from the sale of the state's right, title,

21  and interest in and to the tobacco settlement agreement.

22         (d)  For fiscal year 2001-2002, $150 million of the

23  existing principal in the endowment shall be reserved and

24  accounted for within the endowment, the income from which

25  shall be used solely for the funding for biomedical research

26  activities as provided in s. 215.5602. The income from the

27  remaining principal shall be used solely as the source of

28  funding for health and human services programs for children

29  and elders as provided in subsection (5). The separate account

30  for biomedical research shall be dissolved and the entire

31  principal in the endowment shall be used exclusively for

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 1  health and human services programs when cures have been found

 2  for tobacco-related cancer, heart, and lung disease.

 3         (5)  AVAILABILITY OF FUNDS; USES.--

 4         (a)  Funds from the endowment which are available for

 5  legislative appropriation shall be transferred by the board to

 6  the Department of Financial Services Banking and Finance

 7  Tobacco Settlement Clearing Trust Fund, created in s. 17.41,

 8  and disbursed in accordance with the legislative

 9  appropriation.

10         1.  Appropriations by the Legislature to the Department

11  of Health from endowment earnings from the principal set aside

12  for biomedical research shall be from a category called the

13  Florida Biomedical Research Program and shall be deposited

14  into the Biomedical Research Trust Fund in the Department of

15  Health established in s. 20.435.

16         2.  Appropriations by the Legislature to the Department

17  of Children and Family Services, the Department of Health, or

18  the Department of Elderly Affairs for health and human

19  services programs shall be from a category called the Lawton

20  Chiles Endowment Fund Programs and shall be deposited into

21  each department's respective Tobacco Settlement Trust Fund as

22  appropriated.

23         Section 224.  Section 215.58, Florida Statutes, is

24  amended to read:

25         215.58  Definitions relating to State Bond Act.--The

26  following words or terms when used in this act shall have the

27  following meanings:

28         (1)  "Governor" means shall mean the Governor of the

29  state or any Acting Governor or other person then exercising

30  the duties of the office of Governor.

31  

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 1         (2)  "Treasurer" shall mean the Insurance Commissioner

 2  and Treasurer.

 3         (3)  "Comptroller" shall mean the State Comptroller.

 4         (2)(4)  "State" means shall mean the State of Florida.

 5         (3)(5)  "Division" means shall mean the Division of

 6  Bond Finance.

 7         (4)(6)  "Board" means shall mean the governing board of

 8  the said division, which shall be composed of the Governor and

 9  Cabinet.

10         (5)(7)  "Director" means shall mean the chief

11  administrator of the division, who shall act on behalf of the

12  division when authorized by the board, as provided by this

13  act.

14         (6)(8)  "State agency" means shall mean any board,

15  commission, authority, or other state agency heretofore or

16  hereafter created by the constitution or statutes of the

17  state.

18         (7)(9)  "Bonds" means shall mean state bonds, or any

19  revenue bonds, certificates or other obligations heretofore or

20  hereafter authorized to be issued by said division or by any

21  state agency.

22         (8)(10)  "State bonds" means shall mean bonds pledging

23  the full faith and credit of the State of Florida.

24         (9)(11)  "Legislature" means shall mean the State

25  Legislature.

26         (10)(12)  "Constitution" means shall mean the existing

27  constitution of the state, or any constitution hereafter

28  adopted by the people of the state, together with all

29  amendments thereof.

30  

31  

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 1         (11)(13)  "Original issue discount" means the amount by

 2  which the par value of a bond exceeds its public offering

 3  price at the time it is originally offered to an investor.

 4         (12)(14)  "Governmental agency" means shall mean:

 5         (a)  The state or any department, commission, agency,

 6  or other instrumentality thereof.

 7         (b)  Any county or municipality or any department,

 8  commission, agency, or other instrumentality thereof.

 9         (c)  Any school board or special district, authority,

10  or governmental entity.

11         Section 225.  Subsections (2), (3), (4), (5), and (8)

12  of section 215.684, Florida Statutes, are amended to read:

13         215.684  Limitation on engaging services of securities

14  broker or bond underwriter convicted of fraud.--

15         (2)  Upon notification under chapter 517 that a person

16  or firm has been convicted or has pleaded as provided in

17  subsection (1), the Chief Financial Officer Comptroller shall

18  issue a notice of intent to take action to disqualify such

19  person or firm, which notice must state that:

20         (a)  Such person or firm is considered a disqualified

21  securities broker or bond underwriter;

22         (b)  A state agency may not enter into a contract with

23  such person or firm as a securities broker or bond underwriter

24  for any new business for a period of 2 years;

25         (c)  The substantial rights of such person or firm as a

26  securities broker or bond underwriter are being affected and

27  the person or firm has the rights accorded pursuant to ss.

28  120.569 and 120.57; and

29         (d)  Such person or firm may petition to mitigate the

30  duration of his or her disqualification, based on the criteria

31  established in subsection (3) and may request that such

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 1  mitigation be considered as part of any hearing under ss.

 2  120.569 and 120.57.

 3         (3)  The Chief Financial Officer Comptroller shall

 4  decide, based on the following criteria, whether or not to

 5  mitigate the duration of the disqualification:

 6         (a)  The nature and details of the crime;

 7         (b)  The degree of culpability of the person or firm

 8  proposed to be requalified;

 9         (c)  Prompt or voluntary payment of any damages or

10  penalty as a result of the conviction and disassociation from

11  any other person or firm involved in the crimes of fraud;

12         (d)  Cooperation with state or federal investigation or

13  prosecution of the crime of fraud;

14         (e)  Prior or future self-policing by the person or

15  firm to prevent crimes of fraud; and

16         (f)  Reinstatement or clemency in any jurisdiction in

17  relation to the crime at issue in the proceeding.

18         (4)  If the Chief Financial Officer Comptroller in his

19  or her sole discretion decides to mitigate the duration of the

20  disqualification based on the foregoing, the duration of

21  disqualification shall be for any period the Chief Financial

22  Officer Comptroller specifies up to 2 years from the date of

23  the person's or firm's conviction or plea. If the Chief

24  Financial Officer Comptroller refuses to mitigate the duration

25  of the disqualification, such person or firm may again file

26  for mitigation no sooner than 9 months after denial by the

27  Chief Financial Officer Comptroller.

28         (5)  Notwithstanding subsection (4), a firm or person

29  at any time may petition the Chief Financial Officer

30  Comptroller for termination of the disqualification based upon

31  

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 1  a reversal of the conviction of the firm or person by an

 2  appellate court or a pardon.

 3         (8)  Except when otherwise provided by law for crimes

 4  of fraud with respect to the transaction of business with any

 5  public entity or with an agency or political subdivision of

 6  any other state or with the United States, this act

 7  constitutes the sole authorization for determining when a

 8  person or firm convicted or having pleaded guilty or nolo

 9  contendere to the crime of fraud may not be engaged to provide

10  services as a securities broker or bond underwriter with the

11  state.  Nothing in this act shall be construed to affect the

12  authority granted the Chief Financial Officer Comptroller

13  under chapter 517 to revoke or suspend the license of such

14  securities dealer or bond underwriter.

15         Section 226.  Subsection (4) of section 215.70, Florida

16  Statutes, is amended to read:

17         215.70  State Board of Administration to act in case of

18  defaults.--

19         (4)  Whenever it becomes necessary for state funds to

20  be appropriated for the payment of principal or interest on

21  bonds which have been issued by the Division of Bond Finance

22  on behalf of any local government or authority and for which

23  the full faith and credit of the state has been pledged, any

24  state shared revenues otherwise earmarked for the local

25  government or authority shall be used by the Chief Financial

26  Officer Comptroller to reimburse the state, until the local

27  government or authority has reimbursed the state in full.

28         Section 227.  Subsection (4) of section 215.91, Florida

29  Statutes, is amended to read:

30         215.91  Florida Financial Management Information

31  System; board; council.--

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 1         (4)  The council shall provide ongoing counsel to the

 2  board and act to resolve problems among or between the

 3  functional owner subsystems.  The board, through the

 4  coordinating council, shall direct and manage the development,

 5  implementation, and operation of the information subsystems

 6  that together are the Florida Financial Management Information

 7  System.  The coordinating council shall approve the

 8  information subsystems' designs prior to the development,

 9  implementation, and operation of the subsystems and shall

10  approve subsequent proposed design modifications to the

11  information subsystems subject to the guidelines issued by the

12  council.  The coordinating council shall ensure that the

13  information subsystems' operations support the exchange of

14  unified and coordinated data between information subsystems.

15  The coordinating council shall establish the common data codes

16  for financial management, and it shall require and ensure the

17  use of common data codes by the information subsystems that

18  together constitute the Florida Financial Management

19  Information System. The Chief Financial Officer Comptroller

20  shall adopt a chart of accounts consistent with the common

21  financial management data codes established by the

22  coordinating council.  The board, through the coordinating

23  council, shall establish the financial management policies and

24  procedures for the executive branch of state government.  The

25  coordinating council shall notify in writing the chairs of the

26  legislative fiscal committees and the Chief Justice of the

27  Supreme Court regarding the adoption of, or modification to, a

28  proposed financial management policy or procedure.  The notice

29  shall solicit comments from the chairs of the legislative

30  fiscal committees and the Chief Justice of the Supreme Court

31  

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 1  at least 14 consecutive days before the final action by the

 2  coordinating council.

 3         Section 228.  Subsection (5) of section 215.92, Florida

 4  Statutes, is amended to read:

 5         215.92  Definitions relating to Florida Financial

 6  Management Information System Act.--For the purposes of ss.

 7  215.90-215.96:

 8         (5)  "Design and coordination staff" means the

 9  personnel responsible for providing administrative and

10  clerical support to the board, coordinating council, and

11  secretary to the board.  The design and coordination staff

12  shall function as the agency clerk for the board and the

13  coordinating council.  For administrative purposes, the design

14  and coordination staff are assigned to the Department of

15  Financial Services Banking and Finance but they are

16  functionally assigned to the board.

17         Section 229.  Subsection (3) of section 215.93, Florida

18  Statutes, is amended to read:

19         215.93  Florida Financial Management Information

20  System.--

21         (3)  The Florida Financial Management Information

22  System shall include financial management data and utilize the

23  chart of accounts approved by the Chief Financial Officer

24  Comptroller.  Common financial management data shall include,

25  but not be limited to, data codes, titles, and definitions

26  used by one or more of the functional owner subsystems.  The

27  Florida Financial Management Information System shall utilize

28  common financial management data codes.  The council shall

29  recommend and the board shall adopt policies regarding the

30  approval and publication of the financial management data.

31  The Chief Financial Officer Comptroller shall adopt policies

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 1  regarding the approval and publication of the chart of

 2  accounts.  The Chief Financial Officer's Comptroller's chart

 3  of accounts shall be consistent with the common financial

 4  management data codes established by the coordinating council.

 5  Further, all systems not a part of the Florida Financial

 6  Management Information System which provide information to the

 7  system shall use the common data codes from the Florida

 8  Financial Management Information System and the Chief

 9  Financial Officer's Comptroller's chart of accounts. Data

10  codes that cannot be supplied by the Florida Financial

11  Management Information System and the Chief Financial

12  Officer's Comptroller's chart of accounts and that are

13  required for use by the information subsystems shall be

14  approved by the board upon recommendation of the coordinating

15  council. However, board approval shall not be required for

16  those data codes specified by the Auditor General under the

17  provisions of s. 215.94(6)(c).

18         Section 230.  Subsections (2) and (3) and paragraph (a)

19  of subsection (5) of section 215.94, Florida Statutes, are

20  amended to read:

21         215.94  Designation, duties, and responsibilities of

22  functional owners.--

23         (2)  The Department of Financial Services Banking and

24  Finance shall be the functional owner of the Florida

25  Accounting Information Resource Subsystem established pursuant

26  to ss. 17.03, 215.86, 216.141, and 216.151 and further

27  developed in accordance with the provisions of ss.

28  215.90-215.96.  The subsystem shall include, but shall not be

29  limited to, the following functions:

30  

31  

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 1         (a)  Accounting and reporting so as to provide timely

 2  data for producing financial statements for the state in

 3  accordance with generally accepted accounting principles.

 4         (b)  Auditing and settling claims against the state.

 5         (3)  The Chief Financial Officer Treasurer shall be the

 6  functional owner of the Cash Management Subsystem.  The Chief

 7  Financial Officer Treasurer shall design, implement, and

 8  operate the subsystem in accordance with the provisions of ss.

 9  215.90-215.96.  The subsystem shall include, but shall not be

10  limited to, functions for:

11         (a)  Recording and reconciling credits and debits to

12  treasury fund accounts.

13         (b)  Monitoring cash levels and activities in state

14  bank accounts.

15         (c)  Monitoring short-term investments of idle cash.

16         (d)  Administering the provisions of the Federal Cash

17  Management Improvement Act of 1990.

18         (5)  The Department of Management Services shall be the

19  functional owner of the Cooperative Personnel Employment

20  Subsystem.  The department shall design, implement, and

21  operate the subsystem in accordance with the provisions of ss.

22  110.116 and 215.90-215.96.  The subsystem shall include, but

23  shall not be limited to, functions for:

24         (a)  Maintenance of employee and position data,

25  including funding sources and percentages and salary lapse.

26  The employee data shall include, but not be limited to,

27  information to meet the payroll system requirements of the

28  Department of Financial Services Banking and Finance and to

29  meet the employee benefit system requirements of the

30  Department of Management Services.

31  

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 1         Section 231.  Subsections (1) and (2) of section

 2  215.96, Florida Statutes, are amended to read:

 3         215.96  Coordinating council and design and

 4  coordination staff.--

 5         (1)  The Chief Financial Officer Comptroller, as chief

 6  fiscal officer of the state, shall establish a coordinating

 7  council to function on a continuing basis.  The coordinating

 8  council shall review and recommend to the board solutions and

 9  policy alternatives to ensure coordination between functional

10  owners of the various information subsystems described in ss.

11  215.90-215.96 to the extent necessary to unify all the

12  subsystems into a financial management information system.

13         (2)  The coordinating council shall consist of the

14  Chief Financial Officer Comptroller; the Treasurer; the

15  secretary of the Department of Management Services; the

16  Attorney General; and the Director of Planning and Budgeting,

17  Executive Office of the Governor, or their designees. The

18  Chief Financial Officer Comptroller, or his or her designee,

19  shall be chair of the coordinating council, and the design and

20  coordination staff shall provide administrative and clerical

21  support to the council and the board. The design and

22  coordination staff shall maintain the minutes of each meeting

23  and shall make such minutes available to any interested

24  person. The Auditor General, the State Courts Administrator,

25  an executive officer of the Florida Association of State

26  Agency Administrative Services Directors, and an executive

27  officer of the Florida Association of State Budget Officers,

28  or their designees, shall serve without voting rights as ex

29  officio members on the coordinating council. The chair may

30  call meetings of the coordinating council as often as

31  necessary to transact business; however, the coordinating

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 1  council shall meet at least once a year.  Action of the

 2  coordinating council shall be by motion, duly made, seconded

 3  and passed by a majority of the coordinating council voting in

 4  the affirmative for approval of items that are to be

 5  recommended for approval to the Financial Management

 6  Information Board.

 7         Section 232.  Section 215.965, Florida Statutes, is

 8  amended to read:

 9         215.965  Disbursement of state moneys.--Except as

10  provided in s. 17.076, s. 253.025(14), s. 259.041(18), s.

11  717.124(5), s. 732.107(5), or s. 733.816(5), all moneys in the

12  State Treasury shall be disbursed by state warrant, drawn by

13  the Chief Financial Officer Comptroller upon the State

14  Treasury and payable to the ultimate beneficiary. This

15  authorization shall include electronic disbursement.

16         Section 233.  Paragraphs (a), (c), (j), (n), (p), and

17  (s) of subsection (2), subsections (3) and (4), paragraphs (a)

18  and (b) of subsection (5), paragraphs (a) and (d) of

19  subsection (6), paragraphs (a) and (c) of subsection (7),

20  paragraphs (e) and (g) of subsection (8), paragraph (e) of

21  subsection (9), and paragraphs (d) and (f) of subsection (10)

22  of section 215.97, Florida Statutes, are amended to read:

23         215.97  Florida Single Audit Act.--

24         (2)  Definitions; as used in this section, the term:

25         (a)  "Audit threshold" means the amount to use in

26  determining when a state single audit of a nonstate entity

27  shall be conducted in accordance with this section. Each

28  nonstate entity that expends a total amount of state financial

29  assistance equal to or in excess of $300,000 in any fiscal

30  year of such nonstate entity shall be required to have a state

31  single audit for such fiscal year in accordance with the

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 1  requirements of this section. Every 2 years the Auditor

 2  General, after consulting with the Executive Office of the

 3  Governor, the Chief Financial Officer Comptroller, and all

 4  state agencies that provide state financial assistance to

 5  nonstate entities, shall review the amount for requiring

 6  audits under this section and may adjust such dollar amount

 7  consistent with the purpose of this section.

 8         (c)  "Catalog of State Financial Assistance" means a

 9  comprehensive listing of state projects. The Catalog of State

10  Financial Assistance shall be issued by the Executive Office

11  of the Governor after conferring with the Chief Financial

12  Officer Comptroller and all state agencies that provide state

13  financial assistance to nonstate entities. The Catalog of

14  State Financial Assistance shall include for each listed state

15  project: the responsible state agency; standard state project

16  number identifier; official title; legal authorization; and

17  description of the state project, including objectives,

18  restrictions, application and awarding procedures, and other

19  relevant information determined necessary.

20         (j)  "Major state project" means any state project

21  meeting the criteria as stated in the rules of the Executive

22  Office of the Governor. Such criteria shall be established

23  after consultation with the Chief Financial Officer

24  Comptroller and appropriate state agencies that provide state

25  financial assistance and shall consider the amount of state

26  project expenditures or expenses or inherent risks. Each major

27  state project shall be audited in accordance with the

28  requirements of this section.

29         (n)  "Schedule of State Financial Assistance" means a

30  document prepared in accordance with the rules of the Chief

31  

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 1  Financial Officer Comptroller and included in each financial

 2  reporting package required by this section.

 3         (p)  "State financial assistance" means financial

 4  assistance from state resources, not including federal

 5  financial assistance and state matching, provided to nonstate

 6  entities to carry out a state project. "State financial

 7  assistance" includes all types of state assistance as stated

 8  in the rules of the Executive Office of the Governor

 9  established in consultation with the Chief Financial Officer

10  Comptroller and appropriate state agencies that provide state

11  financial assistance. It includes state financial assistance

12  provided directly by state awarding agencies or indirectly by

13  recipients of state awards or subrecipients. It does not

14  include procurement contracts used to buy goods or services

15  from vendors. Audits of such procurement contracts with

16  vendors are outside of the scope of this section. Also, audits

17  of contracts to operate state-government-owned and

18  contractor-operated facilities are excluded from the audit

19  requirements of this section.

20         (s)  "State Projects Compliance Supplement" means a

21  document issued by the Executive Office of the Governor, in

22  consultation with the Chief Financial Officer Comptroller and

23  all state agencies that provide state financial assistance.

24  The State Projects Compliance Supplement shall identify state

25  projects, the significant compliance requirements, eligibility

26  requirements, matching requirements, suggested audit

27  procedures, and other relevant information determined

28  necessary.

29         (3)  The Executive Office of the Governor shall:

30         (a)  Upon conferring with the Chief Financial Officer

31  Comptroller and all state awarding agencies, adopt rules

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 1  necessary to provide appropriate guidance to state awarding

 2  agencies, recipients and subrecipients, and independent

 3  auditors of state financial assistance relating to the

 4  requirements of this section, including:

 5         1.  The types or classes of financial assistance

 6  considered to be state financial assistance which would be

 7  subject to the requirements of this section. This would

 8  include guidance to assist in identifying when the state

 9  agency or recipient has contracted with a vendor rather than

10  with a recipient or subrecipient.

11         2.  The criteria for identifying a major state project.

12         3.  The criteria for selecting state projects for

13  audits based on inherent risk.

14         (b)  Be responsible for coordinating the initial

15  preparation and subsequent revisions of the Catalog of State

16  Financial Assistance after consultation with the Chief

17  Financial Officer Comptroller and all state awarding agencies.

18         (c)  Be responsible for coordinating the initial

19  preparation and subsequent revisions of the State Projects

20  Compliance Supplement, after consultation with the Chief

21  Financial Officer Comptroller and all state awarding agencies.

22         (4)  The Chief Financial Officer Comptroller shall:

23         (a)  Make enhancements to the state's accounting system

24  to provide for the:

25         1.  Recording of state financial assistance and federal

26  financial assistance appropriations and expenditures within

27  the state awarding agencies' operating funds.

28         2.  Recording of state project number identifiers, as

29  provided in the Catalog of State Financial Assistance, for

30  state financial assistance.

31  

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 1         3.  Establishment and recording of an identification

 2  code for each financial transaction, including state agencies'

 3  disbursements of state financial assistance and federal

 4  financial assistance, as to the corresponding type or

 5  organization that is party to the transaction (e.g., other

 6  governmental agencies, nonprofit organizations, and for-profit

 7  organizations), and disbursements of federal financial

 8  assistance, as to whether the party to the transaction is or

 9  is not a recipient or subrecipient.

10         (b)  Upon conferring with the Executive Office of the

11  Governor and all state awarding agencies, adopt rules

12  necessary to provide appropriate guidance to state awarding

13  agencies, recipients and subrecipients, and independent

14  auditors of state financial assistance relating to the format

15  for the Schedule of State Financial Assistance.

16         (c)  Perform any inspections, reviews, investigations,

17  or audits of state financial assistance considered necessary

18  in carrying out the Chief Financial Officer's Comptroller's

19  legal responsibilities for state financial assistance or to

20  comply with the requirements of this section.

21         (5)  Each state awarding agency shall:

22         (a)  Provide to a recipient information needed by the

23  recipient to comply with the requirements of this section,

24  including:

25         1.  The audit and accountability requirements for state

26  projects as stated in this section and applicable rules of the

27  Executive Office of the Governor, rules of the Chief Financial

28  Officer Comptroller, and rules of the Auditor General.

29         2.  Information from the Catalog of State Financial

30  Assistance, including the standard state project number

31  identifier; official title; legal authorization; and

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 1  description of the state project including objectives,

 2  restrictions, and other relevant information determined

 3  necessary.

 4         3.  Information from the State Projects Compliance

 5  Supplement, including the significant compliance requirements,

 6  eligibility requirements, matching requirements, suggested

 7  audit procedures, and other relevant information determined

 8  necessary.

 9         (b)  Require the recipient, as a condition of receiving

10  state financial assistance, to allow the state awarding

11  agency, the Chief Financial Officer Comptroller, and the

12  Auditor General access to the recipient's records and the

13  recipient's independent auditor's working papers as necessary

14  for complying with the requirements of this section.

15         (6)  As a condition of receiving state financial

16  assistance, each recipient that provides state financial

17  assistance to a subrecipient shall:

18         (a)  Provide to a subrecipient information needed by

19  the subrecipient to comply with the requirements of this

20  section, including:

21         1.  Identification of the state awarding agency.

22         2.  The audit and accountability requirements for state

23  projects as stated in this section and applicable rules of the

24  Executive Office of the Governor, rules of the Chief Financial

25  Officer Comptroller, and rules of the Auditor General.

26         3.  Information from the Catalog of State Financial

27  Assistance, including the standard state project number

28  identifier; official title; legal authorization; and

29  description of the state project, including objectives,

30  restrictions, and other relevant information.

31  

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 1         4.  Information from the State Projects Compliance

 2  Supplement including the significant compliance requirements,

 3  eligibility requirements, matching requirements, and suggested

 4  audit procedures, and other relevant information determined

 5  necessary.

 6         (d)  Require subrecipients, as a condition of receiving

 7  state financial assistance, to permit the independent auditor

 8  of the recipient, the state awarding agency, the Chief

 9  Financial Officer Comptroller, and the Auditor General access

10  to the subrecipient's records and the subrecipient's

11  independent auditor's working papers as necessary to comply

12  with the requirements of this section.

13         (7)  Each recipient or subrecipient of state financial

14  assistance shall comply with the following:

15         (a)  Each nonstate entity that receives state financial

16  assistance and meets audit threshold requirements, in any

17  fiscal year of the nonstate entity, as stated in the rules of

18  the Auditor General, shall have a state single audit conducted

19  for such fiscal year in accordance with the requirements of

20  this act and with additional requirements established in rules

21  of the Executive Office of the Governor, rules of the Chief

22  Financial Officer Comptroller, and rules of the Auditor

23  General. If only one state project is involved in a nonstate

24  entity's fiscal year, the nonstate entity may elect to have

25  only a state project-specific audit of the state project for

26  that fiscal year.

27         (c)  Regardless of the amount of the state financial

28  assistance, the provisions of this section do not exempt a

29  nonstate entity from compliance with provisions of law

30  relating to maintaining records concerning state financial

31  assistance to such nonstate entity or allowing access and

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 1  examination of those records by the state awarding agency, the

 2  Chief Financial Officer Comptroller, or the Auditor General.

 3         (8)  The independent auditor when conducting a state

 4  single audit of recipients or subrecipients shall:

 5         (e)  Report on the results of any audit conducted

 6  pursuant to this section in accordance with the rules of the

 7  Executive Office of the Governor, rules of the Chief Financial

 8  Officer Comptroller, and rules of the Auditor General. Audit

 9  reports shall include summaries of the auditor's results

10  regarding the nonstate entity's financial statements; Schedule

11  of State Financial Assistance; internal controls; and

12  compliance with laws, rules, and guidelines.

13         (g)  Upon notification by the nonstate entity, make

14  available the working papers relating to the audit conducted

15  pursuant to the requirements of this section to the state

16  awarding agency, the Chief Financial Officer Comptroller, or

17  the Auditor General for review or copying.

18         (9)  The independent auditor, when conducting a state

19  project-specific audit of recipients or subrecipients, shall:

20         (e)  Upon notification by the nonstate entity, make

21  available the working papers relating to the audit conducted

22  pursuant to the requirements of this section to the state

23  awarding agency, the Chief Financial Officer Comptroller, or

24  the Auditor General for review or copying.

25         (10)  The Auditor General shall:

26         (d)  Provide technical advice upon request of the Chief

27  Financial Officer Comptroller, Executive Office of the

28  Governor, and state agencies relating to financial reporting

29  and audit responsibilities contained in this section.

30         (f)  Perform ongoing reviews of a sample of financial

31  reporting packages filed pursuant to the requirements of this

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 1  section to determine compliance with the reporting

 2  requirements of this section and applicable rules of the

 3  Executive Office of the Governor, rules of the Chief Financial

 4  Officer Comptroller, and rules of the Auditor General.

 5         Section 234.  Paragraph (a) of subsection (2) of

 6  section 216.0442, Florida Statutes, is amended to read:

 7         216.0442  Truth in bonding; definitions; summary of

 8  state debt; statement of proposed financing; truth-in-bonding

 9  statement.--

10         (2)  When required by statute to support the proposed

11  debt financing of fixed capital outlay projects or operating

12  capital outlay requests or to explain the issuance of a debt

13  or obligation, one or more of the following documents shall be

14  developed:

15         (a)  A summary of outstanding state debt as furnished

16  by the Chief Financial Officer Comptroller pursuant to s.

17  216.102.

18         Section 235.  Section 216.102, Florida Statutes, is

19  amended to read:

20         216.102  Filing of financial information; handling by

21  Chief Financial Officer Comptroller; penalty for

22  noncompliance.--

23         (1)  By September 30 of each year, each agency

24  supported by any form of taxation, licenses, fees, imposts, or

25  exactions, the judicial branch, and, for financial reporting

26  purposes, each component unit of the state as determined by

27  the Chief Financial Officer Comptroller shall prepare, using

28  generally accepted accounting principles, and file with the

29  Chief Financial Officer Comptroller the financial and other

30  information necessary for the preparation of annual financial

31  statements for the State of Florida as of June 30. In

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 1  addition, each such agency and the judicial branch shall

 2  prepare financial statements showing the financial position

 3  and results of agency or branch operations as of June 30 for

 4  internal management purposes.

 5         (a)  Each state agency and the judicial branch shall

 6  record the receipt and disbursement of funds from federal

 7  sources in a form and format prescribed by the Chief Financial

 8  Officer Comptroller. The access to federal funds by the

 9  administering agencies or the judicial branch may not be

10  authorized until:

11         1.  The deposit has been recorded in the Florida

12  Accounting Information Resource Subsystem using proper,

13  consistent codes that designate deposits as federal funds.

14         2.  The deposit and appropriate recording required by

15  this paragraph have been verified by the Office of the Chief

16  Financial Officer Treasurer.

17         (b)  The Chief Financial Officer Comptroller shall

18  publish a statewide policy detailing the requirements for

19  recording receipt and disbursement of federal funds into the

20  Florida Accounting Information Resource Subsystem and provide

21  technical assistance to the agencies and the judicial branch

22  to implement the policy.

23         (2)  Financial information must be contained within the

24  Florida Accounting Information Resource Subsystem. Other

25  information must be submitted in the form and format

26  prescribed by the Chief Financial Officer Comptroller.

27         (a)  Each component unit shall file financial

28  information and other information necessary for the

29  preparation of annual financial statements with the agency or

30  branch designated by the Chief Financial Officer Comptroller

31  

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 1  by the date specified by the Chief Financial Officer

 2  Comptroller.

 3         (b)  The state agency or branch designated by the Chief

 4  Financial Officer Comptroller to receive financial information

 5  and other information from component units shall include the

 6  financial information in the Florida Accounting Information

 7  Resource Subsystem and shall include the component units'

 8  other information in its submission to the Chief Financial

 9  Officer Comptroller.

10         (3)  The Chief Financial Officer Comptroller shall:

11         (a)  Prepare and furnish to the Auditor General annual

12  financial statements for the state on or before December 31 of

13  each year, using generally accepted accounting principles.

14         (b)  Prepare and publish a comprehensive annual

15  financial report for the state in accordance with generally

16  accepted accounting principles on or before February 28 of

17  each year.

18         (c)  Furnish the Governor, the President of the Senate,

19  and the Speaker of the House of Representatives with a copy of

20  the comprehensive annual financial report prepared pursuant to

21  paragraph (b).

22         (d)  Notify each agency and the judicial branch of the

23  data that is required to be recorded to enhance accountability

24  for tracking federal financial assistance.

25         (e)  Provide reports, as requested, to executive or

26  judicial branch entities, the President of the Senate, the

27  Speaker of the House of Representatives, and the members of

28  the Florida Congressional Delegation, detailing the federal

29  financial assistance received and disbursed by state agencies

30  and the judicial branch.

31  

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 1         (f)  Consult with and elicit comments from the

 2  Executive Office of the Governor on changes to the Florida

 3  Accounting Information Resource Subsystem which clearly affect

 4  the accounting of federal funds, so as to ensure consistency

 5  of information entered into the Federal Aid Tracking System by

 6  state executive and judicial branch entities. While efforts

 7  shall be made to ensure the compatibility of the Florida

 8  Accounting Information Resource Subsystem and the Federal Aid

 9  Tracking System, any successive systems serving identical or

10  similar functions shall preserve such compatibility.

11  

12  The Chief Financial Officer Comptroller may furnish and

13  publish in electronic form the financial statements and the

14  comprehensive annual financial report required under

15  paragraphs (a), (b), and (c).

16         (4)  If any agency or the judicial branch fails to

17  comply with subsection (1) or subsection (2), the Chief

18  Financial Officer Comptroller may refuse to honor salary

19  claims for agency or branch fiscal and executive staff until

20  the agency or branch corrects its deficiency.

21         (5)  The Chief Financial Officer Comptroller may

22  withhold any funds payable to a component unit that does not

23  comply with subsection (1) or subsection (2) until the

24  component unit corrects its deficiency.

25         (6)  The Chief Financial Officer Comptroller may adopt

26  rules to administer this section.

27         Section 236.  Subsections (1) and (3) of section

28  216.141, Florida Statutes, are amended to read:

29         216.141  Budget system procedures; planning and

30  programming by state agencies.--

31  

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 1         (1)  The Executive Office of the Governor, in

 2  consultation with the appropriations committees of the Senate

 3  and House of Representatives, and by utilizing the Florida

 4  Financial Management Information System management data and

 5  the Chief Financial Officer's Comptroller's chart of accounts,

 6  shall prescribe a planning and budgeting system, pursuant to

 7  s. 215.94(1), to provide for continuous planning and

 8  programming and for effective management practices for the

 9  efficient operations of all state agencies and the judicial

10  branch. The Legislature may contract with the Executive Office

11  of the Governor to develop the planning and budgeting system

12  and to provide services to the Legislature for the support and

13  use of the legislative appropriations system.  The contract

14  shall include the policies and procedures for combining the

15  legislative appropriations system with the planning and

16  budgeting information system established pursuant to s.

17  215.94(1). At a minimum, the contract shall require the use of

18  common data codes. The combined legislative appropriations and

19  planning and budgeting information subsystem shall support the

20  legislative appropriations and legislative oversight functions

21  without data code conversion or modification.

22         (3)  The Chief Financial Officer Comptroller, as chief

23  fiscal officer, shall use the Florida Accounting Information

24  Resource Subsystem developed pursuant to s. 215.94(2) for

25  account purposes in the performance of and accounting for all

26  of his or her constitutional and statutory duties and

27  responsibilities.  However, state agencies and the judicial

28  branch continue to be responsible for maintaining accounting

29  records necessary for effective management of their programs

30  and functions.

31  

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 1         Section 237.  Subsection (1) of section 216.177,

 2  Florida Statutes, is amended to read:

 3         216.177  Appropriations acts, statement of intent,

 4  violation, notice, review and objection procedures.--

 5         (1)  When an appropriations act is delivered to the

 6  Governor after the Legislature has adjourned sine die, as soon

 7  as practicable, but no later than the 10th day before the end

 8  of the period allowed by law for veto consideration in any

 9  year in which an appropriation is made, the chairs of the

10  legislative appropriations committees shall jointly transmit:

11         (a)  The official list of General Revenue Fund

12  appropriations determined in consultation with the Executive

13  Office of the Governor to be nonrecurring; and

14         (b)  The documents set forth in s. 216.0442(2)(a) and

15  (c),

16  

17  to the Executive Office of the Governor, the Chief Financial

18  Officer Comptroller, the Auditor General, the director of the

19  Office of Program Policy Analysis and Government

20  Accountability, the Chief Justice of the Supreme Court, and

21  each state agency. A request for additional explanation and

22  direction regarding the legislative intent of the General

23  Appropriations Act during the fiscal year may be made to the

24  chair and vice chair of the Legislative Budget Commission or

25  the President of the Senate and the Speaker of the House of

26  Representatives only by and through the Executive Office of

27  the Governor for state agencies, and by and through the Chief

28  Justice of the Supreme Court for the judicial branch, as is

29  deemed necessary. However, the Chief Financial Officer

30  Comptroller may also request further clarification of

31  legislative intent pursuant to the Chief Financial Officer's

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 1  Comptroller's responsibilities related to his or her preaudit

 2  function of expenditures.

 3         Section 238.  Subsections (6), (12), and (14) and

 4  paragraph (b) of subsection (16) of section 216.181, Florida

 5  Statutes, are amended to read:

 6         216.181  Approved budgets for operations and fixed

 7  capital outlay.--

 8         (6)(a)  The Executive Office of the Governor or the

 9  Chief Justice of the Supreme Court may require the submission

10  of a detailed plan from the agency or entity of the judicial

11  branch affected, consistent with the General Appropriations

12  Act, special appropriations acts, and the statement of intent

13  before transferring and releasing the balance of a lump-sum

14  appropriation. The provisions of this paragraph are subject to

15  the notice and review procedures set forth in s. 216.177.

16         (b)  The Executive Office of the Governor and the Chief

17  Justice of the Supreme Court may amend, without approval of

18  the Legislative Budget Commission, state agency and judicial

19  branch entity budgets, respectively, to reflect the

20  transferred funds based on the approved plans for lump-sum

21  appropriations.

22  

23  The Executive Office of the Governor shall transmit to each

24  state agency and the Chief Financial Officer Comptroller, and

25  the Chief Justice shall transmit to each judicial branch

26  component and the Chief Financial Officer Comptroller, any

27  approved amendments to the approved operating budgets.

28         (12)  There is appropriated nonoperating budget for

29  refunds, payments to the United States Treasury, payments of

30  the service charge to the General Revenue Fund, and transfers

31  of funds specifically required by law. Such authorized budget,

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 1  together with related releases, shall be transmitted by the

 2  state agency or by the judicial branch to the Chief Financial

 3  Officer Comptroller for entry in his or her the Comptroller's

 4  records in the manner and format prescribed by the Executive

 5  Office of the Governor in consultation with the Chief

 6  Financial Officer Comptroller. A copy of such authorized

 7  budgets shall be furnished to the Executive Office of the

 8  Governor or the Chief Justice, the chairs of the legislative

 9  committees responsible for developing the general

10  appropriations acts, and the Auditor General. The Governor may

11  withhold approval of nonoperating investment authority for

12  certain trust funds when deemed in the best interest of the

13  state. The Governor for the executive branch, and the Chief

14  Justice for the judicial branch, may establish nonoperating

15  budgets for transfers, purchase of investments, special

16  expenses, distributions, and any other nonoperating budget

17  categories they deem necessary and in the best interest of the

18  state and consistent with legislative intent and policy. The

19  provisions of this subsection are subject to the notice,

20  review, and objection procedures set forth in s. 216.177. For

21  purposes of this section, the term "nonoperating budgets"

22  means nonoperating disbursement authority for purchase of

23  investments, refunds, payments to the United States Treasury,

24  transfers of funds specifically required by law, distributions

25  of assets held by the state in a trustee capacity as an agent

26  of fiduciary, special expenses, and other nonoperating budget

27  categories as determined necessary by the Executive Office of

28  the Governor, not otherwise appropriated in the General

29  Appropriations Act.

30         (14)  The Executive Office of the Governor and the

31  Chief Justice of the Supreme Court shall certify the amounts

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 1  approved for operations and fixed capital outlay, together

 2  with any relevant supplementary materials or information, to

 3  the Chief Financial Officer Comptroller; and such

 4  certification shall be the Chief Financial Officer's

 5  Comptroller's guide with reference to the expenditures of each

 6  state agency pursuant to s. 216.192.

 7         (16)

 8         (b)  Any agency, or the judicial branch, that has been

 9  authorized by the General Appropriations Act or expressly

10  authorized by other law to make advances for program startup

11  or advances for contracted services, in total or periodically,

12  shall limit such disbursements to other governmental entities

13  and not-for-profit corporations.  The amount which may be

14  advanced shall not exceed the expected cash needs of the

15  contractor or recipient within the initial 3 months.

16  Thereafter, disbursements shall only be made on a

17  reimbursement basis.  Any agreement that provides for

18  advancements may contain a clause that permits the contractor

19  or recipient to temporarily invest the proceeds, provided that

20  any interest income shall either be returned to the agency or

21  be applied against the agency's obligation to pay the contract

22  amount.  This paragraph does not constitute lawful authority

23  to make any advance payment not otherwise authorized by laws

24  relating to a particular agency or general laws relating to

25  the expenditure or disbursement of public funds.  The Chief

26  Financial Officer Comptroller may, after consultation with the

27  legislative appropriations committees, advance funds beyond a

28  3-month requirement if it is determined to be consistent with

29  the intent of the approved operating budget.

30         Section 239.  Section 216.183, Florida Statutes, is

31  amended to read:

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 1         216.183  Entities using performance-based program

 2  budgets; chart of accounts.--State agencies and the judicial

 3  branch for which a performance-based program budget has been

 4  appropriated shall utilize the chart of accounts used by the

 5  Florida Accounting Information Resource Subsystem in the

 6  manner described in s. 215.93(3). The chart of accounts for

 7  state agencies and the judicial branch for which a

 8  performance-based program budget has been appropriated shall

 9  be developed and amended, if necessary, in consultation with

10  the Department of Financial Services Banking and Finance, the

11  Executive Office of the Governor, and the chairs of the

12  Legislative Budget Commission.

13         Section 240.  Subsections (1) and (4) of section

14  216.192, Florida Statutes, are amended to read:

15         216.192  Release of appropriations; revision of

16  budgets.--

17         (1)  Unless otherwise provided in the General

18  Appropriations Act, on July 1 of each fiscal year, up to 25

19  percent of the original approved operating budget of each

20  agency and of the judicial branch may be released until such

21  time as annual plans for quarterly releases for all

22  appropriations have been developed, approved, and furnished to

23  the Chief Financial Officer Comptroller by the Executive

24  Office of the Governor for state agencies and by the Chief

25  Justice of the Supreme Court for the judicial branch.  The

26  plans, including appropriate plans of releases for fixed

27  capital outlay projects that correspond with each project

28  schedule, shall attempt to maximize the use of trust funds and

29  shall be transmitted to the Chief Financial Officer

30  Comptroller by August 1 of each fiscal year. Such releases

31  shall at no time exceed the total appropriations available to

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 1  a state agency or to the judicial branch, or the approved

 2  budget for such agency or the judicial branch if less. The

 3  Chief Financial Officer Comptroller shall enter such releases

 4  in his or her records in accordance with the release plans

 5  prescribed by the Executive Office of the Governor and the

 6  Chief Justice, unless otherwise amended as provided by law.

 7  The Executive Office of the Governor and the Chief Justice

 8  shall transmit a copy of the approved annual releases to the

 9  head of the state agency, the chair and vice chair of the

10  Legislative Budget Commission, and the Auditor General. The

11  Chief Financial Officer Comptroller shall authorize all

12  expenditures to be made from the appropriations on the basis

13  of such releases and in accordance with the approved budget,

14  and not otherwise. Expenditures shall be authorized only in

15  accordance with legislative authorizations. Nothing herein

16  precludes periodic reexamination and revision by the Executive

17  Office of the Governor or by the Chief Justice of the annual

18  plans for release of appropriations and the notifications of

19  the parties of all such revisions.

20         (4)  The legislative appropriations committees may

21  advise the Chief Financial Officer Comptroller, the Executive

22  Office of the Governor, or the Chief Justice relative to the

23  release of any funds under this section.

24         Section 241.  Subsection (1) of section 216.212,

25  Florida Statutes, is amended to read:

26         216.212  Budgets for federal funds; restrictions on

27  expenditure of federal funds.--

28         (1)  The Executive Office of the Governor and, the

29  office of the Chief Financial Officer Comptroller, and the

30  office of the Treasurer shall develop and implement procedures

31  for accelerating the drawdown of, and minimizing the payment

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 1  of interest on, federal funds.  The Executive Office of the

 2  Governor shall establish a clearinghouse for federal programs

 3  and activities.  The clearinghouse shall develop the capacity

 4  to respond to federal grant opportunities and to coordinate

 5  the use of federal funds in the state.

 6         (a)  Every state agency, when making a request or

 7  preparing a budget to be submitted to the Federal Government

 8  for funds, equipment, material, or services, shall submit such

 9  request or budget to the Executive Office of the Governor for

10  review before submitting it to the proper federal authority.

11  However, the Executive Office of the Governor may specifically

12  authorize any agency to submit specific types of grant

13  proposals directly to the Federal Government.

14         (b)  Every office or court of the judicial branch, when

15  making a request or preparing a budget to be submitted to the

16  Federal Government for funds, equipment, material, or

17  services, shall submit such request or budget to the Chief

18  Justice of the Supreme Court for approval before submitting it

19  to the proper federal authority.  However, the Chief Justice

20  may specifically authorize any court to submit specific types

21  of grant proposals directly to the Federal Government.

22         Section 242.  Subsections (8), (9), and (10) of section

23  216.221, Florida Statutes, are amended to read:

24         216.221  Appropriations as maximum appropriations;

25  adjustment of budgets to avoid or eliminate deficits.--

26         (8)  The Chief Financial Officer Comptroller also has

27  the duty to ensure that revenues being collected will be

28  sufficient to meet the appropriations and that no deficit

29  occurs in any fund of the state.

30         (9)  If, in the opinion of the Chief Financial Officer

31  Comptroller, after consultation with the Revenue Estimating

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 1  Conference, a deficit will occur, he or she the Comptroller

 2  shall report his or her opinion to the Governor in writing. In

 3  the event the Governor does not certify a deficit within 10

 4  days after the Chief Financial Officer's Comptroller's report,

 5  the Chief Financial Officer Comptroller shall report his or

 6  her findings and opinion to the commission and the Chief

 7  Justice of the Supreme Court.

 8         (10)  When advised by the Revenue Estimating

 9  Conference, the Chief Financial Officer Comptroller, or any

10  agency responsible for a trust fund that a deficit will occur

11  with respect to the appropriations from a specific trust fund

12  in the current fiscal year, the Governor for the executive

13  branch, or the Chief Justice for the judicial branch, shall

14  develop a plan of action to eliminate the deficit. Before

15  implementing the plan of action, the Governor or the Chief

16  Justice must comply with the provisions of s. 216.177(2). In

17  developing the plan of action, the Governor or the Chief

18  Justice shall, to the extent possible, preserve legislative

19  policy and intent, and, absent any specific directions to the

20  contrary in the General Appropriations Act, any reductions in

21  appropriations from the trust fund for the fiscal year shall

22  be prorated among the specific appropriations made from the

23  trust fund for the current fiscal year.

24         Section 243.  Subsection (1) of section 216.222,

25  Florida Statutes, is amended to read:

26         216.222  Budget Stabilization Fund; criteria for

27  withdrawing moneys.--Moneys in the Budget Stabilization Fund

28  may be transferred to the General Revenue Fund for:

29         (1)(a)  Offsetting a deficit in the General Revenue

30  Fund. A deficit is deemed to occur when the official estimate

31  of funds available in the General Revenue Fund for a fiscal

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 1  year falls below the total amount appropriated from the

 2  General Revenue Fund for that fiscal year. Such a transfer

 3  must be made pursuant to s. 216.221, or pursuant to an

 4  appropriation by law.

 5         (b)  Notwithstanding the requirements of s. 216.221,

 6  if, after consultation with the Revenue Estimating Conference,

 7  the Chief Financial Officer Comptroller believes that a

 8  deficit will occur in the General Revenue Fund and if:

 9         1.  Fewer than 30 but more than 4 days are left in the

10  fiscal year, the Legislature is not in session, and neither

11  the Legislature nor the Legislative Budget Commission is

12  scheduled to meet before the end of the fiscal year, or

13         2.  Fewer than 5 days are left in the fiscal year and

14  the Governor and the Chief Justice, the Legislature, or the

15  Legislative Budget Commission have not implemented measures to

16  resolve the deficit,

17  

18  the Chief Financial Officer Comptroller shall certify the

19  deficit to the Governor, the Chief Justice, the President of

20  the Senate, and the Speaker of the House of Representatives,

21  and may thereafter withdraw funds from the Budget

22  Stabilization Fund to offset the projected deficit in the

23  General Revenue Fund.  The Chief Financial Officer Comptroller

24  shall consult with the Governor and the chair and vice chair

25  of the Legislative Budget Commission before any funds may be

26  withdrawn from the Budget Stabilization Fund.  At the

27  beginning of the next fiscal year, the Chief Financial Officer

28  Comptroller shall promptly determine the General Revenue Fund

29  balance to be carried forward. The Chief Financial Officer

30  Comptroller shall immediately repay the Budget Stabilization

31  Fund for the withdrawn amount, up to the amount of the

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 1  balance. If the General Revenue Fund balance carried forward

 2  is not sufficient to fully repay the Budget Stabilization

 3  Fund, the repayment of the remainder of the withdrawn funds

 4  shall be as provided in s. 215.32(2)(c)3.

 5         Section 244.  Paragraph (d) of subsection (4) of

 6  section 216.235, Florida Statutes, is amended to read:

 7         216.235  Innovation Investment Program.--

 8         (4)  There is hereby created the State Innovation

 9  Committee, which shall have final approval authority as to

10  which innovative investment projects submitted under this

11  section shall be funded. Such committee shall be comprised of

12  seven members. Appointed members shall serve terms of 1 year

13  and may be reappointed. The committee shall include:

14         (d)  The Chief Financial Officer Comptroller.

15         Section 245.  Section 216.237, Florida Statutes, is

16  amended to read:

17         216.237  Availability of any remaining funds; agency

18  maintenance of accounting records.--Any remaining funds from

19  the General Revenue Fund and trust fund spending authority not

20  awarded to agencies pursuant to s. 216.236 shall be available

21  to agencies for innovative projects which generate a cost

22  savings, increase revenue, or improve service delivery.

23  Innovative projects which generate a cost savings shall

24  receive greater consideration when awarding innovation

25  investment funds. Any trust fund authority granted under this

26  program shall be utilized in a manner consistent with the

27  statutory authority for the use of said trust fund. Any

28  savings realized as a result of implementing the innovative

29  project shall be used by the agency to establish an internal

30  innovations fund. State agencies which are awarded funds for

31  innovative projects shall utilize the chart of accounts used

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 1  by the Florida Accounting Information Resource Subsystem in

 2  the manner described in s. 215.93(3). Such chart of accounts

 3  shall be developed and amended in consultation with the

 4  Department of Financial Services Banking and Finance and the

 5  Executive Office of the Governor to separate and account for

 6  the savings that result from the implementation of the

 7  innovative projects and to keep track of how the innovative

 8  funds are reinvested by the state agency to fund additional

 9  innovative projects, which may include, but not be limited to,

10  expenditures for training and information technology

11  resources. Guidelines for the establishment of such internal

12  innovations fund shall be provided by the Department of

13  Management Services. Any agency awarded funds under this

14  section shall maintain detailed accounting records showing all

15  expenses, loan transfers, savings, or other financial actions

16  concerning the project. Any savings realized as a result of

17  implementing the innovative project shall be quantified,

18  validated, and verified by the agency. A final report of the

19  results of the implementation of each innovative project shall

20  be submitted by each participating agency to the Governor's

21  Office of Planning and Budgeting and the legislative

22  appropriations committees by June 30 of the fiscal year in

23  which the funds were received and ensuing fiscal years for the

24  life of the project.

25         Section 246.  Paragraph (b) of subsection (2) of

26  section 216.251, Florida Statutes, is amended to read:

27         216.251  Salary appropriations; limitations.--

28         (2)

29         (b)  Salary payments shall be made only to employees

30  filling established positions included in the agency's or in

31  

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 1  the judicial branch's approved budgets and amendments thereto

 2  as may be provided by law; provided, however:

 3         1.  Reclassification of established positions may be

 4  accomplished when justified in accordance with the established

 5  procedures for reclassifying positions; or

 6         2.  When the Division of Risk Management of the

 7  Department of Financial Services Insurance has determined that

 8  an employee is entitled to receive a temporary partial

 9  disability benefit or a temporary total disability benefit

10  pursuant to the provisions of s. 440.15 and there is medical

11  certification that the employee cannot perform the duties of

12  the employee's regular position, but the employee can perform

13  some type of work beneficial to the agency, the agency may

14  return the employee to the payroll, at his or her regular rate

15  of pay, to perform such duties as the employee is capable of

16  performing, even if there is not an established position in

17  which the employee can be placed.  Nothing in this

18  subparagraph shall abrogate an employee's rights under chapter

19  440 or chapter 447, nor shall it adversely affect the

20  retirement credit of a member of the Florida Retirement System

21  in the membership class he or she was in at the time of, and

22  during, the member's disability.

23         Section 247.  Section 216.271, Florida Statutes, is

24  amended to read:

25         216.271  Revolving funds.--

26         (1)  No revolving fund may be established or increased

27  in amount pursuant to s. 17.58(2) s. 18.101(2), unless

28  approved by the Chief Financial Officer Comptroller. The

29  purpose and uses of a revolving fund may not be changed

30  without the prior approval of the Chief Financial Officer

31  Comptroller. As used in this section, the term "revolving

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 1  fund" means a cash fund maintained within or outside the State

 2  Treasury and established from an appropriation, to be used by

 3  an agency or the judicial branch in making authorized

 4  expenditures.

 5         (2)  When the Chief Financial Officer Comptroller

 6  approves a revolving or petty cash fund for making refunds or

 7  other payments, such fund shall be established from an account

 8  within the appropriate fund to be known as "payments for

 9  revolving funds from funds not otherwise appropriated."

10  Reimbursements made from revolving or petty cash funds shall

11  be made in strict accordance with the provisions of s.

12  215.26(2). The Chief Financial Officer Comptroller may

13  restrict the types of uses of any revolving fund established

14  pursuant to this section.

15         (3)  Vouchers for reimbursement of expenditures from

16  revolving funds established under this section shall be

17  presented in a routine manner to the Chief Financial Officer

18  Comptroller for approval and payment, the proceeds of which

19  shall be returned to the revolving or petty cash fund

20  involved.

21         (4)  The revolving or petty cash fund authorized herein

22  shall be properly maintained and accounted for by the agency

23  or by the judicial branch requesting the fund and, upon the

24  expiration of the need therefor, shall be returned in the

25  amount originally established to the appropriate fund for

26  credit to the payments for revolving funds account therein.

27         (5)  Reimbursement to the revolving fund for uninsured

28  losses and theft may be made from the fund in which the

29  responsible operating department is budgeted.  Such

30  reimbursement shall be submitted consistent with procedures

31  specified by the Chief Financial Officer Comptroller.

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 1         Section 248.  Section 216.275, Florida Statutes, is

 2  amended to read:

 3         216.275  Clearing accounts.--No clearing account may be

 4  established outside the State Treasury pursuant to s. 17.58(2)

 5  s. 18.101(1) unless approved by the Chief Financial Officer

 6  Treasurer during the fiscal year. Each agency, or the judicial

 7  branch, desiring to maintain a clearing account outside the

 8  State Treasury shall submit a written request to do so to the

 9  Chief Financial Officer Treasurer in accordance with the

10  format and manner prescribed by the Chief Financial Officer

11  Treasurer. The Chief Financial Officer Treasurer shall

12  maintain a listing of all clearing accounts approved during

13  the fiscal year.

14         Section 249.  Subsections (2), (3), (6), (8), (9), and

15  (10) of section 216.292, Florida Statutes, are amended to

16  read:

17         216.292  Appropriations nontransferable; exceptions.--

18         (2)  A lump sum appropriated for a performance-based

19  program must be distributed by the Governor for state agencies

20  or the Chief Justice for the judicial branch into the

21  traditional expenditure categories in accordance with s.

22  216.181(6)(b).  At any time during the year, the agency head

23  or Chief Justice may transfer funds between those categories

24  with no limit on the amount of the transfer. Authorized

25  revisions of the original approved operating budget, together

26  with related changes, if any, must be transmitted by the state

27  agency or by the judicial branch to the Executive Office of

28  the Governor or the Chief Justice, the chair and vice chair of

29  the Legislative Budget Commission, the Office of Program

30  Policy Analysis and Government Accountability, and the Auditor

31  General. Such authorized revisions shall be consistent with

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 1  the intent of the approved operating budget, shall be

 2  consistent with legislative policy and intent, and shall not

 3  conflict with specific spending policies specified in the

 4  General Appropriations Act. The Executive Office of the

 5  Governor shall forward a copy of the revisions within 7

 6  working days to the Chief Financial Officer Comptroller for

 7  entry in his or her records in the manner and format

 8  prescribed by the Executive Office of the Governor in

 9  consultation with the Chief Financial Officer Comptroller.

10  Such authorized revisions shall be consistent with the intent

11  of the approved operating budget, shall be consistent with

12  legislative policy and intent, and shall not conflict with

13  specific spending policies specified in the General

14  Appropriations Act.

15         (3)  The head of each department or the Chief Justice

16  of the Supreme Court, whenever it is deemed necessary by

17  reason of changed conditions, may transfer appropriations

18  funded from identical funding sources, except appropriations

19  for fixed capital outlay, and transfer the amounts included

20  within the total original approved budget and releases as

21  furnished pursuant to ss. 216.181 and 216.192, as follows:

22         (a)  Between categories of appropriations within a

23  budget entity, if no category of appropriation is increased or

24  decreased by more than 5 percent of the original approved

25  budget or $150,000, whichever is greater, by all action taken

26  under this subsection.

27         (b)  Additionally, between budget entities within

28  identical categories of appropriations, if no category of

29  appropriation is increased or decreased by more than 5 percent

30  of the original approved budget or $150,000, whichever is

31  greater, by all action taken under this subsection.

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 1         (c)  Such authorized revisions must be consistent with

 2  the intent of the approved operating budget, must be

 3  consistent with legislative policy and intent, and must not

 4  conflict with specific spending policies specified in the

 5  General Appropriations Act.

 6  

 7  Such authorized revisions, together with related changes, if

 8  any, in the plan for release of appropriations, shall be

 9  transmitted by the state agency or by the judicial branch to

10  the Chief Financial Officer Comptroller for entry in the Chief

11  Financial Officer's Comptroller's records in the manner and

12  format prescribed by the Executive Office of the Governor in

13  consultation with the Chief Financial Officer Comptroller.  A

14  copy of such revision shall be furnished to the Executive

15  Office of the Governor or the Chief Justice, the chair and

16  vice chair of the Legislative Budget Commission, the Auditor

17  General, and the director of the Office of Program Policy

18  Analysis and Government Accountability.

19         (6)  Upon request of a department to, and approval by,

20  the Chief Financial officer Comptroller, funds appropriated

21  may be transferred to accounts established for disbursement

22  purposes upon release of such appropriation.  Such transfer

23  may only be made to the same appropriation category and the

24  same funding source from which the funds are transferred.

25         (8)(a)  Should any state agency or the judicial branch

26  become more than 90 days delinquent on reimbursements due to

27  the Unemployment Compensation Trust Fund, the Department of

28  Labor and Employment Security shall certify to the Chief

29  Financial Officer Comptroller the amount due; and the Chief

30  Financial Officer Comptroller shall transfer the amount due to

31  

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 1  the Unemployment Compensation Trust Fund from any funds of the

 2  agency available.

 3         (b)  Should any state agency or the judicial branch

 4  become more than 90 days delinquent in paying the Division of

 5  Risk Management of the Department of Financial Services

 6  Insurance for insurance coverage, the division Department of

 7  Insurance may certify to the Chief Financial Officer

 8  Comptroller the amount due; and the Chief Financial Officer

 9  Comptroller shall transfer the amount due to the Division of

10  Risk Management from any funds of the agency or the judicial

11  branch available.

12         (9)  Moneys appropriated in the General Appropriations

13  Act for the purpose of paying for services provided by the

14  state communications system in the Department of Management

15  Services shall be paid by the user agencies, or the judicial

16  branch, within 45 days after the billing date.  Billed amounts

17  not paid by the user agencies, or by the judicial branch,

18  shall be transferred by the Chief Financial Officer

19  Comptroller from the user agencies to the Communications

20  Working Capital Trust Fund.

21         (10)  The Chief Financial Officer Comptroller shall

22  report all such transfers and the reasons for such transfers

23  to the legislative appropriations committees and the Executive

24  Office of the Governor.

25         Section 250.  Paragraph (a) of subsection (1),

26  paragraph (a) of subsection (2), and subsection (3) of section

27  216.301, Florida Statutes, are amended to read:

28         216.301  Appropriations; undisbursed balances.--

29         (1)(a)  Any balance of any appropriation, except an

30  appropriation for fixed capital outlay, which is not disbursed

31  but which is expended or contracted to be expended shall, at

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 1  the end of each fiscal year, be certified by the head of the

 2  affected state agency or the judicial or legislative branches,

 3  on or before August 1 of each year, to the Executive Office of

 4  the Governor, showing in detail the obligees to whom obligated

 5  and the amounts of such obligations.  On or before September 1

 6  of each year, the Executive Office of the Governor shall

 7  review and approve or disapprove, consistent with legislative

 8  policy and intent, any or all of the items and amounts

 9  certified by the head of the affected state agency and shall

10  approve all items and amounts certified by the Chief Justice

11  of the Supreme Court for the judicial branch and by the

12  legislative branch and shall furnish the Chief Financial

13  Officer Comptroller, the legislative appropriations

14  committees, and the Auditor General a detailed listing of the

15  items and amounts approved as legal encumbrances against the

16  undisbursed balance of such appropriation. The review shall

17  assure that trust funds have been fully maximized.  Any such

18  encumbered balance remaining undisbursed on December 31 of the

19  same calendar year in which such certification was made shall

20  revert to the fund from which appropriated and shall be

21  available for reappropriation by the Legislature.  In the

22  event such certification is not made and an obligation is

23  proven to be legal, due, and unpaid, then the obligation shall

24  be paid and charged to the appropriation for the current

25  fiscal year of the state agency or the legislative or judicial

26  branch affected.

27         (2)(a)  Any balance of any appropriation for fixed

28  capital outlay not disbursed but expended or contracted or

29  committed to be expended shall, at the end of each fiscal

30  year, be certified by the head of the affected state agency or

31  the legislative or judicial branch, on or before August 1 of

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 1  each year, to the Executive Office of the Governor, showing in

 2  detail the commitment or to whom obligated and the amount of

 3  such commitment or obligation.  On or before September 1 of

 4  each year, the Executive Office of the Governor shall review

 5  and approve or disapprove, consistent with legislative policy

 6  and intent, any or all of the items and amounts certified by

 7  the head of the affected state agency and shall approve all

 8  items and amounts certified by the Chief Justice of the

 9  Supreme Court and by the legislative branch and shall furnish

10  the Chief Financial Officer Comptroller, the legislative

11  appropriations committees, and the Auditor General a detailed

12  listing of the items and amounts approved as legal

13  encumbrances against the undisbursed balances of such

14  appropriations.  In the event such certification is not made

15  and the balance of the appropriation has reverted and the

16  obligation is proven to be legal, due, and unpaid, then the

17  same shall be presented to the Legislature for its

18  consideration.

19         (3)  Notwithstanding the provisions of subsection (2),

20  the unexpended balance of any appropriation for fixed capital

21  outlay subject to but not under the terms of a binding

22  contract or a general construction contract prior to February

23  1 of the second fiscal year, or the third fiscal year if it is

24  for an educational facility as defined in chapter 1013 or a

25  construction project of a state university, of the

26  appropriation shall revert on February 1 of such year to the

27  fund from which appropriated and shall be available for

28  reappropriation. The Executive Office of the Governor shall,

29  not later than February 20 of each year, furnish the Chief

30  Financial Officer Comptroller, the legislative appropriations

31  committees, and the Auditor General a report listing in detail

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 1  the items and amounts reverting under the authority of this

 2  subsection, including the fund to which reverted and the

 3  agency affected.

 4         Section 251.  Section 217.07, Florida Statutes, is

 5  amended to read:

 6         217.07  Transfer of surplus property assets to

 7  department.--The Chief Financial Officer State Treasurer is

 8  authorized to transfer to the department any funds unexpended

 9  in the Surplus Property Revolving Trust Fund account in the

10  State Treasury.  This revolving fund shall remain in existence

11  as a separate trust fund as long as the surplus property

12  program exists.  Upon termination of the program any remaining

13  funds shall be disposed of as provided by federal law.

14         Section 252.  Section 218.06, Florida Statutes, is

15  amended to read:

16         218.06  Transfer of funds by county commissioners with

17  relation to public works grants.--

18         (1)  Boards of county commissioners of the several

19  counties of the state, whenever it may be necessary to meet

20  the requirements of the United States Government with

21  reference to obtaining grants of federal funds in connection

22  with the program of the Public Works Administration, may by

23  resolution of such board, transfer and expend such sums of

24  money as may be necessary to obtain said grant, from any fund

25  to such other fund as may be necessary to meet said

26  requirements and carry out the intent and purposes of the said

27  transfer; provided, however, that no such transfer may be made

28  by any county of the state without first having obtained the

29  approval of the Department of Financial Services Banking and

30  Finance thereto, and in the counties of the state where there

31  is provision for a budget commission, without first having

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 1  also obtained the approval of said budget commission to said

 2  transfer.

 3         (2)  The Department of Financial Services Banking and

 4  Finance and the budget commissions of the several counties of

 5  the state in which there are provisions for such budget

 6  commissions, may approve such transfers whenever in their

 7  opinion such transfers are necessary and proper.

 8         Section 253.  Paragraph (a) of subsection (1) of

 9  section 218.23, Florida Statutes, is amended to read:

10         218.23  Revenue sharing with units of local

11  government.--

12         (1)  To be eligible to participate in revenue sharing

13  beyond the minimum entitlement in any fiscal year, a unit of

14  local government is required to have:

15         (a)  Reported its finances for its most recently

16  completed fiscal year to the Department of Financial Services

17  Banking and Finance, pursuant to s. 218.32.

18  

19  Additionally, to receive its share of revenue sharing funds, a

20  unit of local government shall certify to the Department of

21  Revenue that the requirements of s. 200.065, if applicable,

22  were met.  The certification shall be made annually within 30

23  days of adoption of an ordinance or resolution establishing a

24  final property tax levy or, if no property tax is levied, not

25  later than November 1.  The portion of revenue sharing funds

26  which, pursuant to this part, would otherwise be distributed

27  to a unit of local government which has not certified

28  compliance or has otherwise failed to meet the requirements of

29  s. 200.065 shall be deposited in the General Revenue Fund for

30  the 12 months following a determination of noncompliance by

31  the department.

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 1         Section 254.  Subsection (4) of section 218.31, Florida

 2  Statutes, is amended to read:

 3         218.31  Definitions.--As used in this part, except

 4  where the context clearly indicates a different meaning:

 5         (4)  "Department" means the Department of Financial

 6  Services Banking and Finance.

 7         Section 255.  Subsections (1) and (4) of section

 8  218.321, Florida Statutes, are amended to read:

 9         218.321  Annual financial statements; local

10  governmental entities.--

11         (1)  Each local governmental entity shall complete its

12  financial statements for the previous fiscal year in

13  compliance with generally accepted accounting principles and

14  the uniform chart of accounts prescribed by the department of

15  Banking and Finance.

16         (4)  The failure by any local governmental entity to

17  complete its annual financial statements shall, in addition to

18  any other penalties provided by law, authorize the department

19  to employ personnel or send department personnel to such local

20  governmental entity in order to complete such annual financial

21  statements. The expenses related to the completion of the

22  annual financial statements shall be charged to the local

23  governmental entity. Upon failure by the local governmental

24  entity to pay the charge within 15 days after billing, the

25  department shall so certify to the Chief Financial Officer

26  Comptroller, who shall forward the amount so certified to the

27  department from any funds due to the local governmental entity

28  under any revenue-sharing or tax-sharing fund established by

29  the state, except as otherwise provided by the State

30  Constitution.

31  

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 1         Section 256.  Section 218.325, Florida Statutes, is

 2  amended to read:

 3         218.325  Uniform chart of accounts and financial

 4  reporting for court and justice system costs and revenues.--

 5         (1)(a)  The Uniform Chart of Accounts Development

 6  Committee is hereby created to develop and implement a uniform

 7  chart of accounts.  The committee shall work with the

 8  representatives of the designated end-user groups identified

 9  in subsection (3) in order to determine the specific financial

10  data related to the operations of the circuit and county

11  courts and justice-related agencies of the executive branch

12  which must be accounted for and reported. The committee shall

13  then work with the department of Banking and Finance to

14  develop the necessary rules required to implement the uniform

15  chart of accounts.  The committee shall include:

16         1.  The Chief Financial Officer Comptroller or his or

17  her the Comptroller's designee.

18         2.  Three clerks of the circuit court or deputy clerks,

19  appointed by the president of the Florida Association of Court

20  Clerks.

21         3.  Three elected county commissioners or county

22  finance staff, appointed by the Florida Association of

23  Counties.

24         4.  Three elected sheriffs or their designees,

25  appointed by the president of the Florida Sheriffs

26  Association.

27         (b)  The Chief Financial Officer Comptroller or his or

28  her the Comptroller's designee shall serve as chairperson of

29  the committee. The committee shall use the staff of the

30  Department of Financial Services Banking and Finance for staff

31  support and may also appoint technical support staff as

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 1  designated by the Florida Association of Court Clerks, the

 2  Florida Association of Counties, and the Florida Sheriffs

 3  Association as needed for technical assistance and support.

 4  Members of the committee must be appointed within 30 days

 5  after June 18, 1995. Within 60 days after the appointment of

 6  the membership, the committee shall meet to establish

 7  procedures for the conduct of its business.

 8         (c)  Members of the committee shall serve without

 9  compensation.

10         (2)  The Uniform Chart of Accounts Development

11  Committee shall make an analysis of the requirements for

12  implementing a detailed, uniform chart of accounts and

13  financial reporting system for court and justice-related

14  agency expenditures and revenues. The Chief Financial Officer

15  Comptroller shall make a report to the Chief Justice of the

16  Florida Supreme Court, the Governor, the Speaker of the House

17  of Representatives, and the President of the Senate on such

18  requirements, including a timetable for implementation and an

19  assessment of fiscal impact, by January 1, 1996.  The proposed

20  uniform chart of accounts and financial reporting system must

21  provide that all revenues received and expenditures incurred

22  by county governments, clerks of court, the courts or other

23  judicial entities that are related to the operations of the

24  circuit courts and county courts, and other components of the

25  justice system can be accounted for in sufficient detail to

26  permit reporting for both discrete functions and

27  organizational units.

28         (3)  For purposes of this section, the collection of

29  representatives of end-user groups, which shall assist the

30  Uniform Chart of Accounts Development Committee on the process

31  and procedures for implementing new accounting and reporting

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 1  requirements and provide oversight and guidance for

 2  implementing activities, shall be formed by one representative

 3  each from the Office of the Governor, the Speaker of the House

 4  of Representatives, the President of the Senate, the Office of

 5  the Chief Financial Officer Comptroller, the Office of the

 6  State Courts Administrator, the Florida Prosecuting Attorneys

 7  Association, the Florida Public Defenders Association, the

 8  Legislative Committee on Intergovernmental Relations, the

 9  Information Resource Committee, and The Florida Bar.

10         Section 257.  Paragraph (a) of subsection (1) of

11  section 220.151, Florida Statutes, is amended to read:

12         220.151  Apportionment; methods for special

13  industries.--

14         (1)(a)  Except as provided in paragraph (b), the tax

15  base of an insurance company for a taxable year or period

16  shall be apportioned to this state by multiplying such base by

17  a fraction the numerator of which is the direct premiums

18  written for insurance upon properties and risks in this state

19  and the denominator of which is the direct premiums written

20  for insurance upon properties and risks everywhere. For

21  purposes of this paragraph, the term "direct premiums written"

22  means the total amount of direct premiums written,

23  assessments, and annuity considerations, as reported for the

24  taxable year or period on the annual statement filed by the

25  company with the Office of Insurance Regulation of the

26  Financial Services Commission commissioner of insurance in the

27  form approved by the National Convention of Insurance

28  Commissioners or such other form as may be prescribed in lieu

29  thereof.

30         Section 258.  Subsection (7) of section 220.187,

31  Florida Statutes, is amended to read:

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 1         220.187  Credits for contributions to nonprofit

 2  scholarship-funding organizations.--

 3         (7)  DEPOSITS OF ELIGIBLE CONTRIBUTIONS.--All eligible

 4  contributions received by an eligible nonprofit

 5  scholarship-funding organization shall be deposited in a

 6  manner consistent with s. 17.57(2) s. 18.10(2).

 7         Section 259.  Subsection (3) of section 220.62, Florida

 8  Statutes, is amended to read:

 9         220.62  Definitions.--For purposes of this part:

10         (3)  The term "international banking facility" means a

11  set of asset and liability accounts segregated on the books

12  and records of a banking organization that includes only

13  international banking facility deposits, borrowings, and

14  extensions of credit, as those terms are defined by the

15  Financial Services Commission Department of Banking and

16  Finance, taking into account all transactions in which

17  international banking facilities are permitted to engage by

18  regulations of the Board of Governors of the Federal Reserve

19  System, as from time to time amended.  When providing such

20  definitions, the Financial Services Commission Department of

21  Banking and Finance shall also consider the public interest,

22  including the need to maintain a sound and competitive banking

23  system, as well as the purpose of this act, which is to create

24  an environment conducive to the conduct of an international

25  banking business in the state.

26         Section 260.  Subsection (2) of section 220.723,

27  Florida Statutes, is amended to read:

28         220.723  Overpayments; interest.--

29         (2)  Interest shall accrue from the date upon which the

30  taxpayer files a written notice advising the department of the

31  overpayment.  Interest shall be paid until such date as

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 1  determined by the department, which shall be no more than 7

 2  days prior to the date of the issuance by the Chief Financial

 3  Officer Comptroller of the refund warrant.

 4         Section 261.  Paragraph (b) of subsection (1) and

 5  paragraph (b) of subsection (2) of section 238.11, Florida

 6  Statutes, are amended to read:

 7         238.11  Collection of contributions.--

 8         (1)  The collection of contributions shall be as

 9  follows:

10         (b)  Each employer shall transmit monthly to the

11  Department of Management Services a warrant for the total

12  amount of such deductions. Each employer shall also transmit

13  monthly to the department a warrant for such employer

14  contribution set aside as provided for in paragraph (a) of

15  this subsection. The department, after making records of all

16  such warrants, shall transmit them to the Department of

17  Financial Services Banking and Finance for delivery to the

18  Chief Financial Officer, Treasurer of the state who shall

19  collect them.

20         (2)  The collection of the state contribution shall be

21  made as follows:

22         (b)  The Department of Management Services shall

23  certify one-fourth of the amount so ascertained for each year

24  to the Chief Financial Officer Comptroller on or before the

25  last day of July, October, January, and April of each year.

26  The Chief Financial Officer Comptroller shall, on or before

27  the first day of August, November, February, and May of each

28  year, draw his or her warrant or warrants on the Treasurer for

29  the respective amounts due the several funds of the retirement

30  system. On the receipt of the warrant or warrants of the

31  

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 1  Comptroller, the Treasurer shall immediately transfer to the

 2  several funds of the retirement system the amounts due.

 3         Section 262.  Section 238.15, Florida Statutes, is

 4  amended to read:

 5         238.15  Exemption of funds from taxation, execution,

 6  and assignment.--The pensions, annuities or any other benefits

 7  accrued or accruing to any person under the provisions of this

 8  chapter and the accumulated contributions and cash securities

 9  in the funds created under this chapter are exempted from any

10  state, county or municipal tax of the state, and shall not be

11  subject to execution or attachment or to any legal process

12  whatsoever, and shall be unassignable, except:

13         (1)  That any teacher who has retired shall have the

14  right and power to authorize in writing the Department of

15  Management Services to deduct from his or her monthly

16  retirement allowance money for the payment of the premiums on

17  group insurance for hospital, medical and surgical benefits,

18  under a plan or plans for such benefits approved in writing by

19  the Chief Financial Officer Insurance Commissioner and

20  Treasurer of the state, and upon receipt of such request the

21  department shall make the monthly payments as directed; and

22         (2)  As may be otherwise specifically provided for in

23  this chapter.

24         Section 263.  Section 238.172, Florida Statutes, is

25  amended to read:

26         238.172  Proof required.--For any person to obtain the

27  allowance as set forth in s. 238.171 the said person shall

28  make such proof of the facts and conditions entitling him or

29  her to the said allowance as shall reasonably be required by

30  the state board, and when such proof has been submitted to the

31  satisfaction of the state board, the Chief Financial Officer

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 1  State Treasurer shall pay to such person the monthly allowance

 2  herein provided for on warrants drawn by the Comptroller.

 3         Section 264.  Section 238.173, Florida Statutes, is

 4  amended to read:

 5         238.173  Monthly allowance to widows or widowers of

 6  pensioners.--When any teacher, drawing pension under s.

 7  238.171, shall die leaving surviving a widow or widower to

 8  whom such pensioner has been married for a continuous period

 9  of at least 10 years immediately prior to his or her death,

10  and from whom no dissolution of marriage is obtained, such

11  widow or widower, upon proof of marriage to and continuation

12  of marriage for the minimum period with, and death of, said

13  pensioner, shall be granted a pension payable from the date of

14  the death of said pensioner, and at the same time and rate as

15  other pensions paid under s. 238.171.  The Chief Financial

16  Officer Comptroller is hereby authorized and directed to draw

17  his or her warrants in payment of such pensions so long as

18  such widow or widower shall remain unmarried and continue to

19  be a resident of the state; provided, however, that nothing

20  herein contained shall be so construed as to allow such

21  pension to be paid to any widow or widower where such widow or

22  widower of a deceased pensioner under this section receives a

23  like pension in his or her own right as a retired school

24  teacher.

25         Section 265.  Subsection (3) of section 250.22, Florida

26  Statutes, is amended to read:

27         250.22  Retirement.--

28         (3)  Sufficient money to meet the requirements of this

29  section is hereby appropriated out of any moneys in the State

30  Treasury not otherwise appropriated, and payments under this

31  section will be made to those eligible to receive the same on

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 1  the first day of each calendar month from the General Revenue

 2  Fund by the Chief Financial Officer Comptroller upon

 3  prescribed pay vouchers certified to by the Adjutant General

 4  of the state.

 5         Section 266.  Subsections (3), (4), and (5) of section

 6  250.24, Florida Statutes, are amended to read:

 7         250.24  Pay and expenses; appropriation; procedures.--

 8         (3)  Notwithstanding the provision of s. 216.271,

 9  moneys for pay and allowances of the troops ordered out in

10  active service of the state shall be deposited in a separate

11  revolving fund, which shall be approved by the Chief Financial

12  Officer Comptroller and shall be subject to the provisions of

13  s. 17.58(2) s. 18.101(2).  The Department of Military Affairs

14  shall administer the fund.  Frequency of payments to such

15  troops shall be at the discretion of the Adjutant General. The

16  Department of Military Affairs shall present to the Chief

17  Financial Officer Comptroller audit documentation of such

18  payments.  The Department of Military Affairs shall maintain

19  all employee records relating to payments made pursuant to

20  this subsection and shall furnish to the Chief Financial

21  Officer Comptroller the information necessary to update the

22  payroll master record of each employee.

23         (4)  The fund balance remaining in this separate

24  revolving fund after a final accounting of all expenditures

25  for pay and allowances of the troops shall be returned for

26  deposit to the State Treasury within 45 days after the

27  termination of active duty of the troops, except that an

28  operating balance in an amount mutually agreed upon by the

29  Chief Financial Officer Comptroller and the Department of

30  Military Affairs shall be retained in the fund.

31  

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 1         (5)  Vouchers for expenditures other than such pay and

 2  allowances shall be presented to the Chief Financial Officer

 3  Comptroller for approval and payment as prescribed by law.

 4         Section 267.  Section 250.25, Florida Statutes, is

 5  amended to read:

 6         250.25  Governor and Chief Financial Officer

 7  Comptroller authorized to borrow money.--When there is no

 8  state appropriation available for the pay and expenses of

 9  troops called out in active service to preserve the peace or

10  in aid of civil authorities, and funds are not immediately

11  available for this purpose, the Governor and Chief Financial

12  Officer Comptroller may borrow money to make such payments, in

13  such sum or sums as may from time to time be required, and any

14  such loans, so obtained, shall be promptly repaid out of the

15  first funds that become available for such use.

16         Section 268.  Section 250.26, Florida Statutes, is

17  amended to read:

18         250.26  Transfer of funds.--Where the available funds

19  are not sufficient for the purposes specified in ss. 250.23,

20  250.24, and 250.34, the Governor and Chief Financial Officer

21  Comptroller may transfer from any available fund in the State

22  Treasury, such sum as may be necessary to meet such emergency,

23  and the said moneys, so transferred, shall be repaid to the

24  fund from which transferred when moneys become available for

25  that purpose by legislative appropriation or otherwise.

26         Section 269.  Subsection (3) of section 250.34, Florida

27  Statutes, is amended to read:

28         250.34  Injury or death in active service.--

29         (3)  After the expiration of 1 year from the date of

30  injury or disability, such individual shall be provided

31  hospitalization, medical services and supplies, and

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 1  compensation for wages and compensation for disability based

 2  on the average weekly wages of such injured individual on pay

 3  status in the active service of the state or in his or her

 4  civilian occupation or employment, whichever is greater, in

 5  amounts provided under chapter 440 [F. S. 1973], as if such

 6  individual were covered under the Workers' Compensation Law,

 7  except that payments made during the first year after such

 8  injury shall not be duplicated after the expiration of that

 9  year. The Division of Risk Management of the Department of

10  Financial Services Insurance is responsible for processing all

11  claims for benefits under this subsection.

12         Section 270.  Section 252.62, Florida Statutes, is

13  amended to read:

14         252.62  Director of Office of Financial Institutions

15  and Securities Regulation Comptroller's powers in a state of

16  emergency.--

17         (1)  It is the purpose and intent of this section to

18  provide the Director of the Office of Financial Institutions

19  and Securities Regulation of the Financial Services Commission

20  Comptroller, as head of the Department of Banking and Finance,

21  the authority to make temporary modifications to or

22  suspensions of the financial institutions codes in order to

23  expedite the recovery of communities affected by a disaster or

24  other emergency and in order to encourage financial

25  institutions to meet the credit, deposit, and other financial

26  needs of such communities.

27         (2)(a)  When the Governor declares a state of emergency

28  pursuant to s. 252.36, the Director of the Office of Financial

29  Institutions and Securities Regulation Comptroller may issue:

30         1.  One or more general orders applicable to all

31  financial institutions that are subject to the financial

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 1  institutions codes and that serve any portion of the area of

 2  the state under the state of emergency; or

 3         2.  One or more specific orders to particular financial

 4  institutions that are subject to the financial institution

 5  codes and that normally derive more than 60 percent of their

 6  deposits from persons in the area of the state under the state

 7  of emergency,

 8  

 9  which orders may modify or suspend, as to those institutions,

10  all or any part of the financial institutions codes, as

11  defined in s. 655.005, or any applicable rule, consistent with

12  the stated purposes of the financial institutions codes and

13  with maintaining the safety and soundness of the financial

14  institutions system in this state.

15         (b)  An order issued by the director Comptroller under

16  this section becomes effective upon issuance and continues for

17  120 days unless it is terminated by the director Comptroller.

18  The director Comptroller may extend an order for one

19  additional period of 120 days if he or she the Comptroller

20  determines that the emergency conditions that gave rise to the

21  Comptroller's initial order still exist.  The Legislature, by

22  concurrent resolution, may terminate any order issued under

23  this section.

24         (3)  The director Comptroller shall publish, in the

25  next available publication of the Florida Administrative

26  Weekly, a copy of the text of any order issued under this

27  section, together with a statement describing the modification

28  or suspension and explaining how the modification or

29  suspension will facilitate recovery from the emergency and

30  maintain the safety and soundness of financial institutions in

31  this state.

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 1         Section 271.  Subsection (7) of section 252.87, Florida

 2  Statutes, is amended to read:

 3         252.87  Supplemental state reporting requirements.--

 4         (7)  The department shall avoid duplicative reporting

 5  requirements by utilizing the reporting requirements of other

 6  state agencies that regulate hazardous materials to the extent

 7  feasible and shall request the information authorized under

 8  EPCRA. With the advice and consent of the State Emergency

 9  Response Commission for Hazardous Materials, the department

10  may require by rule that the maximum daily amount entry on the

11  chemical inventory report required under s. 312 of EPCRA

12  provide for reporting in estimated actual amounts.  The

13  department may also require by rule an entry for the Federal

14  Employer Identification Number on this report.  To the extent

15  feasible, the department shall encourage and accept required

16  information in a form initiated through electronic data

17  interchange and shall describe by rule the format, manner of

18  execution, and method of electronic transmission necessary for

19  using such form. To the extent feasible, the Department of

20  Financial Services Insurance, the Department of Agriculture

21  and Consumer Services, the Department of Environmental

22  Protection, the Public Service Commission, the Department of

23  Revenue, the Department of Labor and Employment Security, and

24  other state agencies which regulate hazardous materials shall

25  coordinate with the department in order to avoid duplicative

26  requirements contained in each agency's respective reporting

27  or registration forms. The other state agencies that inspect

28  facilities storing hazardous materials and suppliers and

29  distributors of covered substances shall assist the department

30  in informing the facility owner or operator of the

31  requirements of this part. The department shall provide the

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 1  other state agencies with the necessary information and

 2  materials to inform the owners and operators of the

 3  requirements of this part to ensure that the budgets of these

 4  agencies are not adversely affected.

 5         Section 272.  Subsection (14) of section 253.025,

 6  Florida Statutes, is amended to read:

 7         253.025  Acquisition of state lands for purposes other

 8  than preservation, conservation, and recreation.--

 9         (14)  Any agency that acquires land on behalf of the

10  board of trustees is authorized to request disbursement of

11  payments for real estate closings in accordance with a written

12  authorization from an ultimate beneficiary to allow a third

13  party authorized by law to receive such payment provided the

14  Chief Financial Officer Comptroller determines that such

15  disbursement is consistent with good business practices and

16  can be completed in a manner minimizing costs and risks to the

17  state.

18         Section 273.  Subsection (1) of section 255.03, Florida

19  Statutes, is amended to read:

20         255.03  Proceeds of insurance to be paid into State

21  Treasury; disbursement of funds.--

22         (1)  The proceeds from the insurance of any state

23  building or state property covered by insurance which may be

24  destroyed in whole or in part by fire, or other damage, shall

25  be paid into the State Treasury and constitute a fund for the

26  rebuilding or replacing of such property, and the Chief

27  Financial Officer Comptroller may draw his or her warrant on

28  the State Treasurer for such amounts, not to exceed the

29  proceeds so paid in, as may be approved by the board or

30  persons having the direct supervision and control of such

31  

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 1  buildings or property for the purpose of rebuilding or

 2  replacing the same.

 3         Section 274.  Subsections (1) and (2) of section

 4  255.052, Florida Statutes, are amended to read:

 5         255.052  Substitution of securities for amounts

 6  retained on public contracts.--

 7         (1)  Under any contract made or awarded by the state or

 8  any county, city, or political subdivision thereof, or other

 9  public authority, the contractor may, from time to time,

10  withdraw the whole or any portion of the amount retained for

11  payments to the contractor pursuant to the terms of the

12  contract, upon depositing with the Chief Financial Officer

13  State Treasurer:

14         (a)  United States Treasury bonds, United States

15  Treasury notes, United States Treasury certificates of

16  indebtedness, or United States Treasury bills;

17         (b)  Bonds or notes of the State of Florida; or

18         (c)  Bonds of any political subdivision in the state;

19  or

20         (d)  Cash delivered to the State Treasury for the

21  Treasury Cash Deposit Trust Fund; or

22         (e)  Certificates of deposit from state or national

23  banks or state or federal savings and loan associations in the

24  state. Certificates of deposit shall possess the eligibility

25  characteristics defined in s. 625.52.

26  

27  No amount shall be withdrawn in excess of the market value of

28  the securities listed in paragraphs (a), (b), and (c) at the

29  time of withdrawal or of the par value of such securities,

30  whichever is lower.

31  

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 1         (2)  The Chief Financial Officer Treasurer shall

 2  regularly, on a regular basis, collect all interest or income

 3  on the obligations so deposited, and shall pay the same, when

 4  and as collected, to the contractor who deposited the

 5  obligations.  If the deposit is in the form of coupon bonds,

 6  the Chief Financial Officer Treasurer shall deliver each

 7  coupon as it matures to the contractor.

 8  

 9  Nothing in this section shall be construed to require the

10  state or any county, city, or political subdivision thereof,

11  or other public authority, to allow the contractor to withdraw

12  the whole or any portion of the amount retained for payments

13  to the contractor except pursuant to the terms of the

14  contract.

15         Section 275.  Subsection (2) of section 255.258,

16  Florida Statutes, is amended to read:

17         255.258  Shared savings financing of energy

18  conservation in state-owned buildings.--

19         (2)  Except as noted in subsection (4), state agency

20  shared savings contracts shall be developed in accordance with

21  a model contract to be developed by the department in

22  cooperation with the Attorney General, the Chief Financial

23  Officer Comptroller, and the Department of Community Affairs.

24  The model contract shall include the methodology for

25  calculating base line energy costs, a procedure for revising

26  these costs should the state institute additional energy

27  conservation features or building use change, a requirement

28  for a performance bond guaranteeing that the facility will be

29  restored to the original condition in the event of default, a

30  provision for early buy-out, a clause specifying who will be

31  responsible for maintaining the equipment, and a provision

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 1  allowing the disposal of equipment at the end of the contract.

 2  No agency shall substantially alter the provisions described

 3  in the model without the permission of the department.

 4         Section 276.  Subsection (8) of section 255.503,

 5  Florida Statutes, is amended to read:

 6         255.503  Powers of the Department of Management

 7  Services.--The Department of Management Services shall have

 8  all the authority necessary to carry out and effectuate the

 9  purposes and provisions of this act, including, but not

10  limited to, the authority to:

11         (8)  Create and establish funds and accounts for the

12  purpose of debt service reserves, for the matching of the

13  timing and the amount of available funds and debt service

14  charges, for sinking funds, for capital depreciation reserves,

15  for operating reserves, for capitalized interest and moneys

16  not required for immediate disbursement to acquire all or a

17  portion of any facility, and for any other reserves, funds, or

18  accounts reasonably necessary to carry out the provisions of

19  this act and to invest in authorized investments any moneys

20  held in such funds and accounts, provided such investments

21  will be made on behalf of the Department of Management

22  Services by the State Board of Administration or the Chief

23  Financial Officer Treasurer, as appropriate.

24         Section 277.  Section 255.521, Florida Statutes, is

25  amended to read:

26         255.521  Failure of payment.--Should an agency fail to

27  make a timely payment of the pool pledged rentals or charges

28  as required by this act, the Chief Financial Officer

29  Comptroller shall withhold general revenues of the agency in

30  an amount sufficient to pay the rentals and charges due and

31  unpaid from such agency.  The Chief Financial Officer

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 1  Comptroller shall forward such said general revenue amounts to

 2  the Department of Management Services in payment of such

 3  rents.

 4         Section 278.  Section 257.22, Florida Statutes, is

 5  amended to read:

 6         257.22  Division of Library and Information Services;

 7  allocation of funds.--Any moneys that may be appropriated for

 8  use by a county, a municipality, a special district, or a

 9  special tax district for the maintenance of a library or

10  library service shall be administered and allocated by the

11  Division of Library and Information Services in the manner

12  prescribed by law. On or before December 1 of each year, the

13  division shall certify to the Chief Financial Officer

14  Comptroller the amount to be paid to each county,

15  municipality, special district, or special tax district, and

16  the Chief Financial Officer Comptroller shall issue warrants

17  to the respective boards of county commissioners or chief

18  municipal executive authorities for the amount so allocated.

19         Section 279.  Subsection (2) of section 258.014,

20  Florida Statutes, is amended to read:

21         258.014  Fees for use of state parks.--

22         (2)  Any moneys received in trust by the division by

23  gift, devise, appropriation, or otherwise shall, subject to

24  the terms of such trust, be deposited with the Chief Financial

25  Officer State Treasurer in a fund to be known as the "State

26  Park Trust Fund," and shall be subject to withdrawal upon

27  application of such said division for expenditure or

28  investment in accordance with the terms of the said trust.

29  Unless prohibited by the terms of the trust by which the said

30  moneys are derived, all of such moneys may be invested as

31  provided by law.

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 1         Section 280.  Subsection (6) and paragraph (e) of

 2  subsection (12) of section 259.032, Florida Statutes, are

 3  amended to read:

 4         259.032  Conservation and Recreation Lands Trust Fund;

 5  purpose.--

 6         (6)  Moneys in the fund not needed to meet obligations

 7  incurred under this section shall be deposited with the Chief

 8  Financial Officer Treasurer to the credit of the fund and may

 9  be invested in the manner provided by law. Interest received

10  on such investments shall be credited to the Conservation and

11  Recreation Lands Trust Fund.

12         (12)

13         (e)  Payment in lieu of taxes pursuant to this

14  subsection shall be made annually to qualifying counties and

15  local governments after certification by the Department of

16  Revenue that the amounts applied for are reasonably

17  appropriate, based on the amount of actual taxes paid on the

18  eligible property, and after the Department of Environmental

19  Protection has provided supporting documents to the Chief

20  Financial Officer Comptroller and has requested that payment

21  be made in accordance with the requirements of this section.

22  

23  For the purposes of this subsection, "local government"

24  includes municipalities, the county school board, mosquito

25  control districts, and any other local government entity which

26  levies ad valorem taxes, with the exception of a water

27  management district.

28         Section 281.  Subsection (18) of section 259.041,

29  Florida Statutes, is amended to read:

30         259.041  Acquisition of state-owned lands for

31  preservation, conservation, and recreation purposes.--

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 1         (18)  Any agency authorized to acquire lands on behalf

 2  of the board of trustees is authorized to request disbursement

 3  of payments for real estate closings in accordance with a

 4  written authorization from an ultimate beneficiary to allow a

 5  third party authorized by law to receive such payment provided

 6  the Chief Financial Officer Comptroller determines that such

 7  disbursement is consistent with good business practices and

 8  can be completed in a manner minimizing costs and risks to the

 9  state.

10         Section 282.  Subsection (2) of section 265.53, Florida

11  Statutes, is amended to read:

12         265.53  Application for indemnity agreement.--

13         (2)  The Department of Financial Services Insurance

14  shall determine whether applicants qualify for indemnity

15  coverage under ss. 265.51-265.56.  Qualification criteria,

16  which shall be set by rule, shall include factors such as:

17         (a)  Physical security of an applicant's exhibition

18  facilities and of the means of transportation of the eligible

19  items from the borrower to the lender.

20         (b)  Experience and qualifications of an applicant's

21  director, curator, registrar, or other staff.

22         (c)  Eligibility of an applicant's exhibition

23  facilities for commercial insurance coverage of works of art

24  displayed there.

25         (d)  Availability of proper equipment to protect works

26  of art from damage from extremes of temperature or humidity or

27  exposure to glare, dust, or corrosion.

28  

29  The department may consult with such private insurance and art

30  experts as reasonably necessary to carry out the intent of

31  this subsection.

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 1         Section 283.  Subsections (1) and (3) of section

 2  265.55, Florida Statutes, are amended to read:

 3         265.55  Claims.--

 4         (1)  The Division of Risk Management of the Department

 5  of Financial Services Insurance may prescribe rules providing

 6  for prompt adjustment of valid claims for losses which are

 7  covered by an indemnity agreement made pursuant to the

 8  provisions of ss. 265.51-265.56, including rules providing for

 9  the employment of consultants and for the arbitration of

10  issues relating to the dollar value of damages involving less

11  than total loss or destruction of such covered objects.

12         (3)  The authorization for payment delineated in

13  subsection (2) shall be forwarded to the Chief Financial

14  Officer Comptroller. The Chief Financial Officer Comptroller

15  shall take appropriate action to execute authorized payment of

16  the claim from the Working Capital Fund, as defined in s.

17  215.32.

18         Section 284.  Paragraph (d) of subsection (3) of

19  section 267.075, Florida Statutes, is amended to read:

20         267.075  The Grove Advisory Council; creation;

21  membership; purposes.--

22         (3)

23         (d)  Members of the council shall serve without

24  compensation or honorarium but shall be entitled to receive

25  reimbursement for per diem and travel expenses as provided in

26  s. 112.061. All expenses of the council shall be paid from

27  appropriations to be made by the Legislature to the Department

28  of State. All vouchers shall be approved by the Division of

29  Historical Resources before being submitted to the Chief

30  Financial Officer Comptroller for payment.

31  

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 1         Section 285.  Paragraph (c) of subsection (2) of

 2  section 272.18, Florida Statutes, is amended to read:

 3         272.18  Governor's Mansion Commission.--

 4         (2)

 5         (c)  Members of the commission shall serve without

 6  compensation or honorarium but shall be entitled to receive

 7  reimbursement for per diem and travel expenses as provided in

 8  s. 112.061. All expenses of the commission shall be paid from

 9  appropriations to be made by the Legislature to the Department

10  of Management Services for that purpose.  The commission shall

11  submit its budgetary requests to the Department of Management

12  Services for approval and inclusion in the legislative budget

13  request of the department. All vouchers shall be approved by

14  the secretary of the Department of Management Services before

15  being submitted to the Chief Financial Officer Comptroller for

16  payment.

17         Section 286.  Subsections (9), (11), (17), (18), (19),

18  and (24), paragraph (f) of subsection (26), and subsections

19  (29), (30), and (31) of section 280.02, Florida Statutes, are

20  amended to read:

21         280.02  Definitions.--As used in this chapter, the

22  term:

23         (9)  "Custodian" means the Chief Financial Officer

24  Treasurer or any bank, savings association, or trust company

25  that:

26         (a)  Is organized and existing under the laws of this

27  state, any other state, or the United States;

28         (b)  Has executed all forms required under this chapter

29  or any rule adopted hereunder;

30         (c)  Agrees to be subject to the jurisdiction of the

31  courts of this state, or of courts of the United States which

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 1  are located within this state, for the purpose of any

 2  litigation arising out of this chapter; and

 3         (d)  Has been approved by the Chief Financial Officer

 4  Treasurer to act as a custodian.

 5         (11)  "Effective date of notice of withdrawal or order

 6  of discontinuance" pursuant to s. 280.11(3) means that date

 7  which is set out as such in any notice of withdrawal or order

 8  of discontinuance from the Chief Financial Officer Treasurer.

 9         (17)  "Operating subsidiary" means the qualified public

10  depository's 100-percent owned corporation that has ownership

11  of pledged collateral. The operating subsidiary may have no

12  powers beyond those that its parent qualified public

13  depository may itself exercise. The use of an operating

14  subsidiary is at the discretion of the qualified public

15  depository and must meet the Chief Financial Officer's

16  Treasurer's requirements.

17         (18)  "Oversight board" means the qualified public

18  depository oversight board created in s. 280.071 for the

19  purpose of safeguarding the integrity of the public deposits

20  program and preventing the realization of loss assessments

21  through standards, policies, and recommendations for actions

22  to the Chief Financial Officer Treasurer.

23         (19)  "Pledged collateral" means securities or cash

24  held separately and distinctly by an eligible custodian for

25  the benefit of the Chief Financial Officer Treasurer to be

26  used as security for Florida public deposits. This includes

27  maturity and call proceeds.

28         (24)  "Public depositor" means the official custodian

29  of funds for a governmental unit who is Treasurer or other

30  Chief Financial Officer or designee responsible for handling

31  public deposits.

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 1         (26)  "Qualified public depository" means any bank,

 2  savings bank, or savings association that:

 3         (f)  Has been designated by the Chief Financial Officer

 4  Treasurer as a qualified public depository.

 5         (29)  "Treasurer" means the Treasurer of the State of

 6  Florida.

 7         (29)(30)  "Chief Financial Officer's "Treasurer's

 8  custody" is a collateral arrangement governed by a contract

 9  between a designated Chief Financial Officer's Treasurer's

10  custodian and the Chief Financial Officer Treasurer. This

11  arrangement requires collateral to be in the Chief Financial

12  Officer's Treasurer's name in order to perfect the security

13  interest.

14         (30)(31)  "Triggering events" are events set out in s.

15  280.041 which give the Chief Financial Officer Treasurer the

16  right to:

17         (a)  Instruct the custodian to transfer securities

18  pledged, interest payments, and other proceeds of pledged

19  collateral not previously credited to the pledgor.

20         (b)  Demand payment under letters of credit.

21         Section 287.  Subsections (1), (2), (5), (6), (7), and

22  (9) of section 280.04, Florida Statutes, are amended to read:

23         280.04  Collateral for public deposits; general

24  provisions.--

25         (1)  The Chief Financial Officer Treasurer shall

26  determine the collateral requirements and collateral pledging

27  level for each qualified public depository following

28  procedures established by rule. These procedures shall include

29  numerical parameters for 25-percent, 50-percent, 125-percent,

30  and 200-percent pledge levels based on nationally recognized

31  

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 1  financial rating services information and established

 2  financial performance guidelines.

 3         (2)  A qualified public depository may not accept or

 4  retain any public deposit which is required to be secured

 5  unless it has deposited with the Chief Financial Officer

 6  Treasurer eligible collateral at least equal to the greater

 7  of:

 8         (a)  The average daily balance of public deposits that

 9  does not exceed the lesser of its capital account or 20

10  percent of the pool figure multiplied by the depository's

11  collateral-pledging level, plus the greater of:

12         1.  One hundred twenty-five percent of the average

13  daily balance of public deposits in excess of capital

14  accounts; or

15         2.  One hundred twenty-five percent of the average

16  daily balance of public deposits in excess of 20 percent of

17  the pool figure.

18         (b)  Twenty-five percent of the average monthly balance

19  of public deposits.

20         (c)  One hundred twenty-five percent of the average

21  daily balance of public deposits if the qualified public

22  depository:

23         1.  Has been established for less than 3 years;

24         2.  Has experienced material decreases in its capital

25  accounts; or

26         3.  Has an overall financial condition that is

27  materially deteriorating.

28         (d)  Two hundred percent of an established maximum

29  amount of public deposits that has been mutually agreed upon

30  by and between the Chief Financial Officer Treasurer and the

31  qualified public depository.

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 1         (e)  Minimum required collateral of $100,000.

 2         (f)  An amount as required in special instructions from

 3  the Chief Financial Officer Treasurer to protect the integrity

 4  of the public deposits program.

 5         (5)  Additional collateral of 20 percent of required

 6  collateral is necessary if a valuation date other than the

 7  close of business as described below has been approved for the

 8  qualified public depository and the required collateral is

 9  found to be insufficient based on the Chief Financial

10  Officer's Treasurer's valuation.

11         (6)  Each qualified public depository shall value its

12  collateral in the following manner; it must:

13         (a)  Use a nationally recognized source.

14         (b)  Use market price, quality ratings, and pay-down

15  factors as of the close of business on the last banking day in

16  the reported month, or as of a date approved by the Chief

17  Financial Officer Treasurer.

18         (c)  Report any material decline in value that occurs

19  before the date of mailing the monthly report, required in s.

20  280.16, to the Chief Financial Officer Treasurer.

21         (d)  Use 100 percent of the maximum amount available

22  under Federal Home Loan Bank letters of credit as market

23  value.

24         (7)  A qualified public depository shall pledge,

25  deposit, or issue additional eligible collateral between

26  filing periods of the monthly report required in s. 280.16

27  when notified by the Chief Financial Officer Treasurer that

28  current market value of collateral does not meet required

29  collateral.  The pledge, deposit, or issuance of such

30  additional collateral shall be made within 2 business days

31  after the Chief Financial Officer's Treasurer's notification.

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 1         (9)  The Chief Financial Officer Treasurer shall adopt

 2  rules for the establishment of collateral requirements,

 3  collateral pledging levels, required collateral calculations,

 4  and market value and clarifying terms.

 5         Section 288.  Section 280.041, Florida Statutes, is

 6  amended to read:

 7         280.041  Collateral arrangements; agreements,

 8  provisions, and triggering events.--

 9         (1)  Eligible collateral listed in s. 280.13 may be

10  pledged, deposited, or issued using the following collateral

11  arrangements as approved by the Chief Financial Officer

12  Treasurer for a qualified public depository or operating

13  subsidiary, if one is used, to meet required collateral:

14         (a)  Regular custody arrangement for collateral pledged

15  to the Chief Financial Officer Treasurer pursuant to

16  subsection (2).

17         (b)  Federal Reserve Bank custody arrangement for

18  collateral pledged to the Chief Financial Officer Treasurer

19  pursuant to subsection (3).

20         (c)  Chief Financial Officer's Treasurer's custody

21  arrangement for collateral deposited in the Chief Financial

22  Officer's Treasurer's name pursuant to subsection (4).

23         (d)  Federal Home Loan Bank letter of credit

24  arrangement for collateral issued with the Chief Financial

25  Officer Treasurer as beneficiary pursuant to subsection (5).

26         (e)  Cash arrangement for collateral held by the Chief

27  Financial Officer Treasurer or a custodian.

28         (2)  With the approval of the Chief Financial Officer

29  Treasurer, a qualified public depository or operating

30  subsidiary, as pledgor, may deposit eligible collateral with a

31  custodian. A qualified public depository shall not act as its

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 1  own custodian. Except in the case of using a Federal Reserve

 2  Bank as custodian, the following are necessary for the Chief

 3  Financial Officer's Treasurer's approval:

 4         (a)  A completed collateral agreement in a form

 5  prescribed by the Chief Financial Officer Treasurer in which

 6  the pledgor agrees to the following provisions:

 7         1.  The pledgor shall own the pledged collateral and

 8  acknowledge that the Chief Financial Officer Treasurer has a

 9  perfected security interest. The pledged collateral shall be

10  eligible collateral and shall be at least equal to the amount

11  of required collateral.

12         2.  The pledgor shall grant to the Chief Financial

13  Officer Treasurer an interest in pledged collateral for the

14  purposes of this section. The pledgor shall not enter into or

15  execute any other agreement related to the pledged collateral

16  that would create an interest in or lien on that collateral in

17  any manner in favor of any third party without the written

18  consent of the Chief Financial Officer Treasurer.

19         3.  The pledgor shall not grant the custodian any lien

20  that attaches to the collateral in favor of the custodian that

21  is superior or equal to the security interest of the Chief

22  Financial Officer Treasurer.

23         4.  The pledgor shall agree that the Chief Financial

24  Officer Treasurer may, without notice to or consent by the

25  pledgor, require the custodian to comply with and perform any

26  and all requests and orders directly from the Chief Financial

27  Officer Treasurer. These include, but are not limited to,

28  liquidating all collateral and submitting the proceeds

29  directly to the Chief Financial Officer Treasurer in the name

30  of the Chief Financial Officer Treasurer only or transferring

31  

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 1  all collateral into an account designated solely by the Chief

 2  Financial Officer Treasurer.

 3         5.  The pledgor shall acknowledge that the Chief

 4  Financial Officer Treasurer may, without notice to or consent

 5  by the pledgor, require the custodian to hold principal

 6  payments and income for the benefit of the Chief Financial

 7  Officer Treasurer.

 8         6.  The pledgor shall initiate collateral transactions

 9  on forms prescribed by the Chief Financial Officer Treasurer

10  in the following manner:

11         a.  A deposit transaction of eligible collateral may be

12  made without prior approval from the Chief Financial Officer

13  Treasurer provided: security types that have restrictions have

14  been approved in advance of the transaction by the Chief

15  Financial Officer Treasurer and simultaneous notification is

16  given to the Chief Financial Officer Treasurer; and the

17  custodian has not received notice from the Chief Financial

18  Officer Treasurer prohibiting deposits without prior approval.

19         b.  A substitution transaction of eligible collateral

20  may be made without prior approval from the Chief Financial

21  Officer Treasurer provided: security types that have

22  restrictions have been approved in advance of the transaction

23  by the Chief Financial Officer Treasurer; the market value of

24  the securities to be substituted is at least equal to the

25  amount withdrawn; simultaneous notification is given to the

26  Chief Financial Officer Treasurer; and the custodian has not

27  received notice from the Chief Financial Officer Treasurer

28  prohibiting substitution.

29         c.  A transfer of collateral between accounts at a

30  custodian requires the Chief Financial Officer's Treasurer's

31  prior approval. The collateral shall be released subject to

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 1  redeposit in the new account with a pledge to the Chief

 2  Financial Officer Treasurer intact.

 3         d.  A transfer of collateral from a custodian to

 4  another custodian requires the Chief Financial Officer's

 5  Treasurer's prior approval and a valid collateral agreement

 6  with the new custodian. The collateral shall be released

 7  subject to redeposit at the new custodian with a pledge to the

 8  Chief Financial Officer Treasurer intact.

 9         e.  A withdrawal transaction requires the Chief

10  Financial Officer's Treasurer's prior approval. The market

11  value of eligible collateral remaining after the withdrawal

12  shall be at least equal to the amount of required collateral.

13  A withdrawal transaction shall be executed for any release of

14  collateral including maturity or call proceeds.

15         f.  Written notice shall be sent to the Chief Financial

16  Officer Treasurer to remove from the inventory of pledged

17  collateral a pay-down security that has paid out with zero

18  principal remaining.

19         7.  If pledged collateral includes definitive

20  (physical) securities in registered form which are in the name

21  of the pledgor or a nominee, the pledgor shall deliver the

22  following documents when requested by the Chief Financial

23  Officer Treasurer:

24         a.  A separate certified power of attorney in a form

25  prescribed by the Chief Financial Officer Treasurer for each

26  issue of securities.

27         b.  Separate bond assignment forms as required by the

28  bond agent or trustee.

29         c.  Certified copies of resolutions adopted by the

30  pledgor's governing body authorizing execution of these

31  documents.

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 1         8.  The pledgor shall be responsible for all costs

 2  necessary to the functioning of the collateral agreement or

 3  associated with confirmation of pledged collateral to the

 4  Chief Financial Officer Treasurer and acknowledges that these

 5  costs shall not be a charge against the Chief Financial

 6  Officer Treasurer or his or her interests in the pledged

 7  collateral.

 8         9.  The pledgor, if notified by the Chief Financial

 9  Officer Treasurer, shall not be allowed to use a custodian if

10  that custodian fails to complete the collateral agreement,

11  releases pledged collateral without the Chief Financial

12  Officer's Treasurer's approval, fails to properly complete

13  confirmations of pledged collateral, fails to honor a request

14  for examination of definitive pledged collateral and records

15  of book-entry securities, or fails to provide requested

16  documents on definitive securities. The period for disallowing

17  the use of a custodian shall be 1 year.

18         10.  The pledgor shall be subject to the jurisdiction

19  of the courts of the State of Florida, or of courts of the

20  United States located within the State of Florida, for the

21  purpose of any litigation arising out of the act.

22         11.  The pledgor is responsible and liable to the Chief

23  Financial Officer Treasurer for any action of agents the

24  pledgor uses to execute collateral transactions or submit

25  reports to the Chief Financial Officer Treasurer.

26         12.  The pledgor shall agree that any information,

27  forms, or reports electronically transmitted to the Chief

28  Financial Officer Treasurer shall have the same enforceability

29  as a signed writing.

30  

31  

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 1         13.  The pledgor shall submit proof that authorized

 2  individuals executed the collateral agreement on behalf of the

 3  pledgor.

 4         14.  The pledgor shall agree by resolution of the board

 5  of directors that collateral agreements entered into for

 6  purposes of this section have been formally accepted and

 7  constitute official records of the pledgor.

 8         15.  The pledgor shall be bound by any other provisions

 9  found necessary for a perfected security interest in

10  collateral under the Uniform Commercial Code.

11         (b)  A completed collateral agreement in a form

12  prescribed by the Chief Financial Officer Treasurer in which

13  the custodian agrees to the following provisions:

14         1.  The custodian shall have no responsibility to

15  ascertain whether the pledged securities are at least equal to

16  the amount of required collateral nor whether the pledged

17  securities are eligible collateral.

18         2.  The custodian shall hold pledged collateral in a

19  custody account for the Chief Financial Officer Treasurer for

20  purposes of this section. The custodian shall not enter into

21  or execute any other agreement related to the collateral that

22  would create an interest in or lien on that collateral in any

23  manner in favor of any third party without the written consent

24  of the Chief Financial Officer Treasurer.

25         3.  The custodian shall agree that any lien that

26  attaches to the collateral in favor of the custodian shall not

27  be superior or equal to the security interest of the Chief

28  Financial Officer Treasurer.

29         4.  The custodian shall, without notice to or consent

30  by the pledgor, comply with and perform any and all requests

31  and orders directly from the Chief Financial Officer

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 1  Treasurer. These include, but are not limited to, liquidating

 2  all collateral and submitting the proceeds directly to the

 3  Chief Financial Officer Treasurer in the name of the Chief

 4  Financial Officer Treasurer only or transferring all

 5  collateral into an account designated solely by the Chief

 6  Financial Officer Treasurer.

 7         5.  The custodian shall consider principal payments on

 8  pay-down securities and income paid on pledged collateral as

 9  the property of the pledgor and shall pay thereto provided the

10  custodian has not received written notice from the Chief

11  Financial Officer Treasurer to hold such principal payments

12  and income for the benefit of the Chief Financial Officer

13  Treasurer.

14         6.  The custodian shall process collateral transactions

15  on forms prescribed by the Chief Financial Officer Treasurer

16  in the following manner:

17         a.  A deposit transaction of eligible collateral may be

18  made without prior approval from the Chief Financial Officer

19  Treasurer unless the custodian has received notice from the

20  Chief Financial Officer Treasurer requiring the Chief

21  Financial Officer's Treasurer's prior approval.

22         b.  A substitution transaction of eligible collateral

23  may be made without prior approval from the Chief Financial

24  Officer Treasurer provided the pledgor certifies the market

25  value of the securities to be substituted is at least equal to

26  the market value amount of the securities to be withdrawn and

27  the custodian has not received notice from the Chief Financial

28  Officer Treasurer prohibiting substitution.

29         c.  A transfer of collateral between accounts at a

30  custodian requires the Chief Financial Officer's Treasurer's

31  prior approval. The collateral shall be released subject to

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 1  redeposit in the new account with a pledge to the Chief

 2  Financial Officer Treasurer intact. Confirmation from the

 3  custodian to the Chief Financial Officer Treasurer must be

 4  received within 5 business days of the redeposit.

 5         d.  A transfer of collateral from a custodian to

 6  another custodian requires the Chief Financial Officer's

 7  Treasurer's prior approval. The collateral shall be released

 8  subject to redeposit at the new custodian with a pledge to the

 9  Chief Financial Officer Treasurer intact. Confirmation from

10  the new custodian to the Chief Financial Officer Treasurer

11  must be received within 5 business days of the redeposit.

12         e.  A withdrawal transaction requires the Chief

13  Financial Officer's Treasurer's prior approval. A withdrawal

14  transaction shall be executed for the release of any pledged

15  collateral including maturity or call proceeds.

16         7.  If pledged collateral includes definitive

17  (physical) securities in registered form, which are in the

18  name of the custodian or a nominee, the custodian shall

19  deliver the following documents when requested by the Chief

20  Financial Officer Treasurer:

21         a.  A separate certified power of attorney in a form

22  prescribed by the Chief Financial Officer Treasurer for each

23  issue of securities.

24         b.  Separate bond assignment forms as required by the

25  bond agent or trustee.

26         c.  Certified copies of resolutions adopted by the

27  custodian's governing body authorizing execution of these

28  documents.

29         8.  The custodian shall acknowledge that the pledgor is

30  responsible for all costs necessary to the functioning of the

31  collateral agreement or associated with confirmation of

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 1  securities pledged to the Chief Financial Officer Treasurer

 2  and that these costs shall not be a charge against the Chief

 3  Financial Officer Treasurer or his or her interests in the

 4  pledged collateral.

 5         9.  The custodian shall agree to provide confirmation

 6  of pledged collateral upon request from the Chief Financial

 7  Officer Treasurer. This confirmation shall be provided within

 8  15 working days after the request, in a format prescribed by

 9  the Chief Financial Officer Treasurer, and shall require no

10  identification other than the pledgor name and location,

11  unless the special identification is provided in the

12  collateral agreement.

13         10.  The custodian shall be subject to the jurisdiction

14  of the courts of the State of Florida, or of courts of the

15  United States located within the State of Florida, for the

16  purpose of any litigation arising out of the act.

17         11.  The custodian shall be responsible and liable to

18  the Chief Financial Officer Treasurer for any action of agents

19  the custodian uses to hold and service collateral pledged to

20  the Chief Financial Officer Treasurer.

21         12.  The custodian shall agree that any information,

22  forms, or reports electronically transmitted to the Chief

23  Financial Officer Treasurer shall have the same enforceability

24  as a signed writing.

25         13.  The Chief Financial Officer Treasurer shall have

26  the right to examine definitive pledged collateral and records

27  of book-entry securities during the regular business hours of

28  the custodian without cost to the Chief Financial Officer

29  Treasurer.

30         14.  The responsibilities of the custodian for the

31  safekeeping of the pledged collateral shall be limited to the

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 1  diligence and care usually exercised by a banking or trust

 2  institution toward its own property.

 3         15.  If there is any change in the Uniform Commercial

 4  Code, as adopted by law in this state, which affects the

 5  requirements for a perfected security interest in collateral,

 6  the Chief Financial Officer Treasurer shall notify the

 7  custodian of such change. The custodian shall have a period of

 8  180 calendar days after such notice to withdraw as custodian

 9  if the custodian cannot provide the required custodial

10  services.

11         (3)  With the approval of the Chief Financial Officer

12  Treasurer, a pledgor may deposit eligible collateral pursuant

13  to an agreement with a Federal Reserve Bank. The Federal

14  Reserve Bank agreement may require terms not consistent with

15  subsection (2) but may not subject the Chief Financial Officer

16  Treasurer to any costs or indemnification requirements.

17         (4)  The Chief Financial Officer Treasurer may require

18  deposit or transfer of collateral into a custodial account

19  established in the Chief Financial Officer's Treasurer's name

20  at a designated custodian. This requirement for Chief

21  Financial Officer's Treasurer's custody shall have the

22  following characteristics:

23         (a)  One or more triggering events must have occurred.

24         (b)  The custodian used must be a Chief Financial

25  Officer's Treasurer's approved custodian that must:

26         1.  Meet the definition of custodian.

27         2.  Not be an affiliate of the qualified public

28  depository.

29         3.  Be bound under a distinct Chief Financial Officer's

30  Treasurer's custodial contract.

31  

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 1         (c)  All deposit transactions require the approval of

 2  the Chief Financial Officer Treasurer.

 3         (d)  All collateral must be in book-entry form.

 4         (e)  The qualified public depository shall be

 5  responsible for all costs necessary to the functioning of the

 6  contract or associated with the confirmation of securities in

 7  the name of the Chief Financial Officer Treasurer and

 8  acknowledges that these costs shall not be a charge against

 9  the Chief Financial Officer Treasurer and may be deducted from

10  the collateral or income earned if unpaid.

11         (5)  With the approval of the Chief Financial Officer

12  Treasurer, a qualified public depository may use Federal Home

13  Loan Bank letters of credit to meet collateral requirements.

14  A completed agreement that includes the following provisions

15  is necessary for the Chief Financial Officer's Treasurer's

16  approval:

17         (a)  The letter of credit shall meet the definition of

18  eligible collateral.

19         (b)  The qualified public depository shall agree that

20  the Chief Financial Officer Treasurer, as beneficiary, may,

21  without notice to or consent by the qualified public

22  depository, demand payment under the letter of credit if any

23  of the triggering events listed in this section occur.

24         (c)  The qualified public depository shall agree that

25  funds received by the Chief Financial Officer Treasurer due to

26  the occurrence of one or more triggering events may be

27  deposited in the Treasury Cash Deposit Trust Fund for purposes

28  of eligible collateral.

29         (d)  The qualified public depository shall arrange for

30  the issue of letters of credit which meet the requirements of

31  s. 280.13 and delivery to the Chief Financial Officer

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 1  Treasurer.  All transactions involving letters of credit

 2  require the Chief Financial Officer's Treasurer's approval.

 3         (e)  The qualified public depository shall be

 4  responsible for all costs necessary in the use or confirmation

 5  of letters of credit issued on behalf of the Chief Financial

 6  Officer Treasurer and acknowledges that these costs shall not

 7  be a charge against the Chief Financial Officer Treasurer.

 8         (f)  The qualified public depository shall be subject

 9  to the jurisdiction of the courts of this state, or of courts

10  of the United States which are located within this state, for

11  the purpose of any litigation arising out of the act.

12         (g)  The qualified public depository shall agree that

13  any information, form, or report electronically transmitted to

14  the Chief Financial Officer Treasurer shall have the same

15  enforceability as a signed writing.

16         (h)  The qualified public depository shall submit proof

17  that authorized individuals executed the letters of credit

18  agreement on its behalf.

19         (i)  The qualified public depository shall agree by

20  resolution of the board of directors that the letters of

21  credit agreements entered into for purposes of this section

22  have been formally accepted and constitute official records of

23  the qualified public depository.

24         (6)  The Chief Financial Officer Treasurer may demand

25  payment under a letter of credit or direct a custodian to

26  deposit or transfer collateral and proceeds of securities not

27  previously credited upon the occurrence of one or more

28  triggering events provided that, to the extent not

29  incompatible with the protection of public deposits, as

30  determined in the Chief Financial Officer's Treasurer's sole

31  and absolute discretion, the Chief Financial Officer Treasurer

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 1  shall provide a custodian and the qualified public depository

 2  with 48 hours' advance notice before directing such deposit or

 3  transfer. These events include:

 4         (a)  The Chief Financial Officer Treasurer determines

 5  that an immediate danger to the public health, safety, or

 6  welfare exists.

 7         (b)  The qualified public depository fails to have

 8  adequate procedures and practices for the accurate

 9  identification, classification, reporting, and

10  collateralization of public deposits.

11         (c)  The custodian fails to provide or allow inspection

12  and verification of documents, reports, records, or other

13  information dealing with the pledged collateral or financial

14  information.

15         (d)  The qualified public depository or its operating

16  subsidiary fails to provide or allow inspection and

17  verification of documents, reports, records, or other

18  information dealing with Florida public deposits, pledged

19  collateral, or financial information.

20         (e)  The custodian fails to hold income and principal

21  payments made on securities held as collateral or fails to

22  deposit or transfer such payments pursuant to the Chief

23  Financial Officer's Treasurer's instructions.

24         (f)  The qualified public depository defaults or

25  becomes insolvent.

26         (g)  The qualified public depository fails to pay an

27  assessment.

28         (h)  The qualified public depository fails to pay an

29  administrative penalty.

30         (i)  The qualified public depository fails to meet

31  financial condition standards.

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 1         (j)  The qualified public depository charges a

 2  withdrawal penalty to public depositors when the qualified

 3  public depository is suspended, disqualified, or withdrawn

 4  from the public deposits program.

 5         (k)  The qualified public depository does not provide,

 6  as required, the public depositor with annual confirmation

 7  information on all open Florida public deposit accounts.

 8         (l)  The qualified public depository pledges, deposits,

 9  or has issued insufficient or unacceptable collateral to meet

10  required collateral within the required time.

11         (m)  Collateral, other than a proper substitution, is

12  released without the prior approval of the Chief Financial

13  Officer Treasurer.

14         (n)  The qualified public depository, custodian,

15  operating subsidiary, or agent violates any provision of the

16  act and the Chief Financial Officer Treasurer determines that

17  such violation may be remedied by a move of collateral.

18         (o)  The qualified public depository, custodian,

19  operating subsidiary, or agent fails to timely cooperate in

20  resolving problems by the date established in written

21  communication from the Chief Financial Officer Treasurer.

22         (p)  The custodian fails to provide sufficient

23  confirmation information.

24         (q)  The Federal Home Loan Bank or the qualified public

25  depository gives notification that a letter of credit will not

26  be extended or renewed and other eligible collateral equal to

27  required collateral has not been deposited within 30 days

28  after the notice or 30 days before expiration of the letter of

29  credit.

30         (r)  The qualified public depository, if involved in a

31  merger, acquisition, consolidation, or other organizational

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 1  change, fails to notify the Chief Financial Officer Treasurer

 2  or ensure that required collateral is properly maintained by

 3  the depository holding the Florida public deposits.

 4         (s)  Events that would bring about an administrative or

 5  legal action by the Chief Financial Officer Treasurer.

 6         (7)  The Chief Financial Officer Treasurer shall adopt

 7  rules to identify forms and establish procedures for

 8  collateral agreements and transactions, furnish confirmation

 9  requirements, establish procedures for using an operating

10  subsidiary and agents, and clarify terms.

11         Section 289.  Section 280.05, Florida Statutes, is

12  amended to read:

13         280.05  Powers and duties of the Chief Financial

14  Officer Treasurer.--In fulfilling the requirements of this

15  act, the Chief Financial Officer Treasurer has the power to

16  take the following actions he or she deems necessary to

17  protect the integrity of the public deposits program:

18         (1)  Identify representative qualified public

19  depositories and furnish notification for the qualified public

20  depository oversight board selection pursuant to s. 280.071.

21         (2)  Provide data for the qualified public depository

22  oversight board duties pursuant to s. 280.071 regarding:

23         (a)  Establishing standards for qualified public

24  depositories and custodians.

25         (b)  Evaluating requests for exceptions to standards

26  and alternative participation agreements.

27         (c)  Reviewing and recommending action for qualified

28  public depository or custodian violations.

29         (3)  Review, implement, monitor, evaluate, and modify

30  all or any part of the standards, policies, or recommendations

31  of the qualified public depository oversight board.

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 1         (4)  Perform financial analysis of any qualified public

 2  depositories.

 3         (5)  Require collateral, or increase the

 4  collateral-pledging level, of any qualified public depository.

 5         (6)  Decline to accept, or reduce the reported value

 6  of, collateral in order to ensure the pledging or depositing

 7  of sufficient marketable collateral and acceptable letters of

 8  credit.

 9         (7)  Maintain perpetual inventory of collateral and

10  perform monthly market valuations and quality ratings.

11         (8)  Monitor and confirm collateral with custodians and

12  letter of credit issuers.

13         (9)  Move collateral into an account established in the

14  Chief Financial Officer's Treasurer's name upon the occurrence

15  of one or more triggering events.

16         (10)  Issue notice to a qualified public depository

17  that use of a custodian will be disallowed when the custodian

18  has failed to follow collateral agreement terms.

19         (11)  Furnish written notice to custodians of

20  collateral to hold interest and principal payments made on

21  securities held as collateral and to deposit or transfer such

22  payments pursuant to the Chief Financial Officer's Treasurer's

23  instructions.

24         (12)  Release collateral held in the Chief Financial

25  Officer's Treasurer's name, subject to sale and transfer of

26  funds directly from the custodian to public depositors of a

27  withdrawing depository.

28         (13)  Demand payment under letters of credit for any of

29  the triggering events listed in s. 280.041 and deposit the

30  funds in:

31  

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 1         (a)  The Public Deposits Trust Fund for purposes of

 2  paying losses to public depositors.

 3         (b)  The Treasury Treasurer's Administrative and

 4  Investment Trust Fund for receiving payment of administrative

 5  penalties.

 6         (c)  The Treasury Cash Deposit Trust Fund for purposes

 7  of eligible collateral.

 8         (14)  Sell securities for the purpose of paying losses

 9  to public depositors not covered by deposit insurance.

10         (15)  Transfer funds directly from the custodian to

11  public depositors or the receiver in order to facilitate

12  prompt payment of claims.

13         (16)  Require the filing of the following reports which

14  the Chief Financial Officer Treasurer shall process as

15  provided:

16         (a)  Qualified public depository monthly reports and

17  schedules. The Chief Financial Officer Treasurer shall review

18  the reports of each qualified public depository for material

19  changes in capital accounts or changes in name, address, or

20  type of institution; record the average daily balances of

21  public deposits held; and monitor the collateral-pledging

22  levels and required collateral.

23         (b)  Quarterly regulatory reports from qualified public

24  depositories. The Chief Financial Officer Treasurer shall

25  analyze qualified public depositories ranked in the lowest

26  category based on established financial condition criteria.

27         (c)  Qualified public depository annual reports and

28  public depositor annual reports. The Chief Financial Officer

29  Treasurer shall compare public deposit information reported by

30  qualified public depositories and public depositors.  Such

31  comparison shall be conducted for qualified public

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 1  depositories which are ranked in the lowest category based on

 2  established financial condition criteria of record on

 3  September 30. Additional comparison processes may be performed

 4  as public deposits program resources permit.

 5         (d)  Any related documents, reports, records, or other

 6  information deemed necessary by the Chief Financial Officer

 7  Treasurer in order to ascertain compliance with this chapter.

 8         (17)  Verify the reports of any qualified public

 9  depository relating to public deposits it holds when necessary

10  to protect the integrity of the public deposits program.

11         (18)  Confirm public deposits, to the extent possible

12  under current law, when needed.

13         (19)  Require at his or her discretion the filing of

14  any information or forms required under this chapter to be by

15  electronic data transmission. Such filings of information or

16  forms shall have the same enforceability as a signed writing.

17         (20)  Suspend or disqualify or disqualify after

18  suspension any qualified public depository that has violated

19  any of the provisions of this chapter or of rules adopted

20  hereunder.

21         (a)  Any qualified public depository that is suspended

22  or disqualified pursuant to this subsection is subject to the

23  provisions of s. 280.11(2) governing withdrawal from the

24  public deposits program and return of pledged collateral. Any

25  suspension shall not exceed a period of 6 months.  Any

26  qualified public depository which has been disqualified may

27  not reapply for qualification until after the expiration of 1

28  year from the date of the final order of disqualification or

29  the final disposition of any appeal taken therefrom.

30  

31  

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 1         (b)  In lieu of suspension or disqualification, impose

 2  an administrative penalty upon the qualified public depository

 3  as provided in s. 280.054.

 4         (c)  If the Chief Financial Officer Treasurer has

 5  reason to believe that any qualified public depository or any

 6  other financial institution holding public deposits is or has

 7  been violating any of the provisions of this chapter or of

 8  rules adopted hereunder, he or she may issue to the qualified

 9  public depository or other financial institution an order to

10  cease and desist from the violation or to correct the

11  condition giving rise to or resulting from the violation.  If

12  any qualified public depository or other financial institution

13  violates a cease-and-desist or corrective order, the Chief

14  Financial Officer Treasurer may impose an administrative

15  penalty upon the qualified public depository or other

16  financial institution as provided in s. 280.054 or s. 280.055.

17  In addition to the administrative penalty, the Chief Financial

18  Officer Treasurer may suspend or disqualify any qualified

19  public depository for violation of any order issued pursuant

20  to this paragraph.

21         Section 290.  Section 280.051, Florida Statutes, is

22  amended to read:

23         280.051  Grounds for suspension or disqualification of

24  a qualified public depository.--A qualified public depository

25  may be suspended or disqualified or both if the Chief

26  Financial Officer Treasurer determines that the qualified

27  public depository has:

28         (1)  Violated any of the provisions of this chapter or

29  any rule adopted by the Chief Financial Officer Treasurer

30  pursuant to this chapter.

31  

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 1         (2)  Submitted reports containing inaccurate or

 2  incomplete information regarding public deposits or collateral

 3  for such deposits, capital accounts, or the calculation of

 4  required collateral.

 5         (3)  Failed to maintain required collateral.

 6         (4)  Grossly misstated the market value of the

 7  securities pledged as collateral.

 8         (5)  Failed to pay any administrative penalty.

 9         (6)  Failed to furnish the Chief Financial Officer

10  Treasurer with prompt and accurate information, or failed to

11  allow inspection and verification of any information, dealing

12  with public deposits or dealing with the exact status of its

13  capital accounts, or any other financial information that the

14  Chief Financial Officer Treasurer determines necessary to

15  verify compliance with this chapter or any rule adopted

16  pursuant to this chapter.

17         (7)  Failed to furnish the Chief Financial Officer

18  Treasurer, when the Chief Financial Officer Treasurer

19  requested, with a power of attorney or bond power or other

20  bond assignment form required by the bond agent, bond trustee,

21  or other transferor for each issue of registered certificated

22  securities pledged.

23         (8)  Failed to furnish any agreement, report, form, or

24  other information required to be filed pursuant to s. 280.16,

25  or when requested by the Chief Financial Officer Treasurer.

26         (9)  Submitted reports signed by an unauthorized

27  individual.

28         (10)  Submitted reports without a certified or verified

29  signature, or both, if required by law.

30         (11)  Released a security without notice or approval.

31  

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 1         (12)  Failed to execute or have the custodian execute a

 2  public depository pledge agreement prior to using a custodian.

 3         (13)  Failed to give notification as required by s.

 4  280.10.

 5         Section 291.  Section 280.052, Florida Statutes, is

 6  amended to read:

 7         280.052  Order of suspension or disqualification;

 8  procedure.--

 9         (1)  The suspension or disqualification of a bank or

10  savings association as a qualified public depository must be

11  by order of the Chief Financial Officer Treasurer and must be

12  mailed to the qualified public depository by registered or

13  certified mail.

14         (2)  The Chief Financial Officer Treasurer shall

15  notify, by first-class mail, all public depositors that have

16  complied with s. 280.17 of any such disqualification or

17  suspension.

18         (3)  The procedures for suspension or disqualification

19  shall be as set forth in chapter 120 and in the rules of the

20  Chief Financial Officer Treasurer adopted pursuant to this

21  section.

22         (4)  Whenever the Chief Financial Officer Treasurer

23  determines that an immediate danger to the public health,

24  safety, or welfare exists, the Chief Financial Officer

25  Treasurer may take any appropriate action available to her or

26  him under the provisions of chapter 120.

27         Section 292.  Paragraphs (a) and (c) of subsection (1)

28  and paragraph (c) of subsection (2) of section 280.053,

29  Florida Statutes, is amended to read:

30         280.053  Period of suspension or disqualification;

31  obligations during period; reinstatement.--

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 1         (1)(a)  The Chief Financial Officer Treasurer may

 2  suspend a qualified public depository for any period that is

 3  fixed in the order of suspension, not exceeding 6 months.  For

 4  the purposes of this section and ss. 280.051 and 280.052, the

 5  effective date of suspension or disqualification is that date

 6  which is set out as such in any order of suspension or

 7  disqualification.

 8         (c)  Upon expiration of the suspension period, the bank

 9  or savings association may, by order of the Chief Financial

10  Officer Treasurer, be reinstated as a qualified public

11  depository, unless the cause of the suspension has not been

12  corrected or the bank or savings association is otherwise not

13  in compliance with this chapter or any rule adopted pursuant

14  to this chapter.

15         (2)

16         (c)  Upon expiration of the disqualification period,

17  the bank or savings association may reapply for qualification

18  as a qualified public depository. If a disqualified bank or

19  savings association is purchased or otherwise acquired by new

20  owners, it may reapply to the Chief Financial Officer

21  Treasurer to be a qualified public depository prior to the

22  expiration date of the disqualification period. Redesignation

23  as a qualified public depository may occur only after the

24  Chief Financial Officer Treasurer has determined that all

25  requirements for holding public deposits under the law have

26  been met.

27         Section 293.  Section 280.054, Florida Statutes, is

28  amended to read:

29         280.054  Administrative penalty in lieu of suspension

30  or disqualification.--

31  

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 1         (1)  If the Chief Financial Officer Treasurer finds

 2  that one or more grounds exist for the suspension or

 3  disqualification of a qualified public depository, the Chief

 4  Financial Officer Treasurer may, in lieu of suspension or

 5  disqualification, impose an administrative penalty upon the

 6  qualified public depository.

 7         (a)  With respect to any nonwillful violation, such

 8  penalty may not exceed $250 for each violation, exclusive of

 9  any restitution found to be due. If a qualified public

10  depository discovers a nonwillful violation, the qualified

11  public depository shall correct the violation; and, if

12  restitution is due, the qualified public depository shall make

13  restitution upon the order of the Chief Financial Officer

14  Treasurer and shall pay interest on such amount at the legal

15  rate from the date of the violation.  Each day a violation

16  continues constitutes a separate violation.

17         (b)  With respect to any knowing and willful violation

18  of a lawful order or rule, the Chief Financial Officer

19  Treasurer may impose a penalty upon the qualified public

20  depository in an amount not exceeding $1,000 for each

21  violation. If restitution is due, the qualified public

22  depository shall make restitution upon the order of the Chief

23  Financial Officer Treasurer and shall pay interest on such

24  amount at the legal rate.  Each day a violation continues

25  constitutes a separate violation.

26         (2)  The failure of a qualified public depository to

27  make restitution when due as required under this section

28  constitutes a willful violation of this chapter.  However, if

29  a qualified public depository in good faith is uncertain

30  whether any restitution is due or as to the amount of

31  restitution due, it shall promptly notify the Chief Financial

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 1  Officer Treasurer of the circumstances. The failure to make

 2  restitution pending a determination of whether restitution is

 3  due or the amount of restitution due does not constitute a

 4  violation of this chapter.

 5         (3)  A qualified public depository is subject to an

 6  administrative penalty in an amount not exceeding the greater

 7  of $1,000 or 10 percent of the amount of withdrawal, not

 8  exceeding $10,000, if the depository fails to provide required

 9  collateral using eligible collateral and prescribed collateral

10  agreements or withdraws collateral without the Chief Financial

11  Officer's Treasurer's approval.

12         Section 294.  Section 280.055, Florida Statutes, is

13  amended to read:

14         280.055  Cease and desist order; corrective order;

15  administrative penalty.--

16         (1)  The Chief Financial Officer Treasurer may issue a

17  cease and desist order and a corrective order upon determining

18  that:

19         (a)  A qualified public depository has requested and

20  obtained a release of pledged collateral without approval of

21  the Chief Financial Officer Treasurer;

22         (b)  A bank, savings association, or other financial

23  institution is holding public deposits without a certificate

24  of qualification issued by the Chief Financial Officer

25  Treasurer;

26         (c)  A qualified public depository pledges, deposits,

27  or arranges for the issuance of unacceptable collateral;

28         (d)  A custodian has released pledged collateral

29  without approval of the Chief Financial Officer Treasurer;

30         (e)  A qualified public depository or a custodian has

31  not furnished to the Chief Financial Officer Treasurer, when

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 1  the Chief Financial Officer Treasurer requested, a power of

 2  attorney or bond power or bond assignment form required by the

 3  bond agent or bond trustee for each issue of registered

 4  certificated securities pledged and registered in the name, or

 5  nominee name, of the qualified public depository or custodian;

 6  or

 7         (f)  A qualified public depository; a bank, savings

 8  association, or other financial institution; or a custodian

 9  has committed any other violation of this chapter or any rule

10  adopted pursuant to this chapter that the Chief Financial

11  Officer Treasurer determines may be remedied by a cease and

12  desist order or corrective order.

13         (2)  Any qualified public depository or other bank,

14  savings association, or financial institution or custodian

15  that violates a cease and desist order or corrective order of

16  the Chief Financial Officer Treasurer is subject to an

17  administrative penalty not exceeding $1,000 for each violation

18  of the order. Each day the violation of the order continues

19  constitutes a separate violation.

20         Section 295.  Subsections (1) and (2) of section

21  280.06, Florida Statutes, are amended to read:

22         280.06  Penalty for violation of law, rule, or order to

23  cease and desist or other lawful order.--

24         (1)  The violation of any provision of this chapter, or

25  any order or rule of the Chief Financial Officer Treasurer, or

26  any order to cease and desist or other lawful order is a

27  misdemeanor of the second degree, punishable as provided in s.

28  775.082 or s. 775.083.

29         (2)  It is a felony of the third degree, punishable as

30  provided in s. 775.082 or s. 775.083, to knowingly and

31  willfully give false information on any form made under oath

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 1  and filed pursuant to this chapter with the intent to mislead

 2  the Chief Financial Officer Treasurer in the administration or

 3  enforcement of this chapter.

 4         Section 296.  Section 280.07, Florida Statutes, is

 5  amended to read:

 6         280.07  Mutual responsibility and contingent

 7  liability.--Any bank or savings association that is designated

 8  as a qualified public depository and that is not insolvent

 9  shall guarantee public depositors against loss caused by the

10  default or insolvency of other qualified public depositories.

11  Each qualified public depository shall execute a form

12  prescribed by the Chief Financial Officer Treasurer for such

13  guarantee which shall be approved by the board of directors

14  and shall become an official record of the institution.

15         Section 297.  Subsections (1), (2), (3), and (5),

16  paragraph (e) of subsection (9), paragraphs (b), (c), (d), and

17  (e) of subsection (10), paragraphs (a) and (b) of subsection

18  (11), and subsection (12) of section 280.071, Florida

19  Statutes, are amended to read:

20         280.071  Qualified Public Depository Oversight Board;

21  purpose; identifying representative qualified public

22  depositories; member selection; responsibilities.--A Qualified

23  Public Depository Oversight Board is created comprised of six

24  members and six alternate members who represent the interests

25  of all qualified public depositories in safeguarding the

26  integrity of the public deposits program and preventing the

27  realization of loss assessments.

28         (1)  On July 31 of each year and as vacancies occur,

29  the Chief Financial Officer Treasurer shall initiate the

30  selection of oversight board representation in the following

31  manner:

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 1         (a)  Categorize eligible qualified public depositories

 2  into three groups according to average asset size.  Eligible

 3  qualified public depositories must be in compliance with all

 4  requirements and shall not be suspended, disqualified,

 5  withdrawn, or under an alternative participation agreement in

 6  the public deposits program.

 7         (b)  Identify the two qualified public depositories in

 8  each of the three groups that have the greatest shares of

 9  contingent liability based on the average monthly balances of

10  public deposits reported pursuant to s. 280.16.

11         (c)  Send notification to the six qualified public

12  depositories that have been identified.

13         (2)  Each of the six representative qualified public

14  depositories shall select a member and alternate member for

15  the oversight board and give the Chief Financial Officer

16  Treasurer written information on the selections within 30

17  calendar days of the Chief Financial Officer's Treasurer's

18  notice.

19         (3)  If an identified qualified public depository

20  declines to select a member, does not respond within 30

21  calendar days, or becomes ineligible, the Chief Financial

22  Officer Treasurer shall furnish notice to the Florida Bankers

23  Association which shall select a member and alternate member

24  to represent that average asset category within 30 calendar

25  days.

26         (5)  The oversight board members and alternate members

27  shall be subject to the Chief Financial Officer's Treasurer's

28  approval.

29         (9)  The oversight board shall organize, communicate,

30  and conduct meetings as follows:

31  

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 1         (e)  Take no official action in the absence of a

 2  quorum.

 3         1.  A quorum shall consist of the majority of voting

 4  members of the oversight board.

 5         2.  Each member shall have one vote.

 6         3.  A member shall not vote on issues directly related

 7  to the qualified public depository he or she represents.

 8         4.  The Chief Financial Officer Treasurer or his or her

 9  representative shall vote as a member of the oversight board

10  in the absence of a quorum.

11         (10)  The oversight board has the power and

12  responsibility to safeguard the integrity of the public

13  deposits program and prevent the realization of loss

14  assessments by:

15         (b)  Recommending approval or rejection to the Chief

16  Financial Officer Treasurer for exceptions that do not meet

17  established standards.  These requests for exceptions may be:

18         1.  Referred by the Chief Financial Officer Treasurer;

19  or

20         2.  Submitted directly by the qualified public

21  depository seeking exception.

22         (c)  Issuing approvals or rejections for alternative

23  participation agreements referred by the Chief Financial

24  Officer Treasurer.

25         (d)  Reviewing program violations and recommending that

26  the Chief Financial Officer Treasurer impose penalties and

27  fines or issue corrective actions and administrative orders.

28         (e)  Studying public deposit program areas referred by

29  the Chief Financial Officer Treasurer.

30         (11)  Official actions of the oversight board regarding

31  the establishment of standards, exception and alternate

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 1  participation agreement decisions, and recommendations

 2  concerning violations shall be:

 3         (a)  Communicated to the Chief Financial Officer

 4  Treasurer in writing.

 5         (b)  Subject to approval of the Chief Financial Officer

 6  Treasurer.

 7         (12)  The Chief Financial Officer Treasurer may adopt

 8  rules to establish procedures and forms for oversight board

 9  member and alternate member selection and oversight board

10  functions.

11         Section 298.  Section 280.08, Florida Statutes, is

12  amended to read:

13         280.08  Procedure for payment of losses.--When the

14  Chief Financial Officer Treasurer determines that a default or

15  insolvency has occurred, he or she shall provide notice as

16  required in s. 280.085 and implement the following procedures:

17         (1)  The Division of Treasury Treasurer, in cooperation

18  with the Office of Financial Institutions and Securities

19  Regulation of the Financial Services Commission Department of

20  Banking and Finance or the receiver of the qualified public

21  depository in default, shall ascertain the amount of funds of

22  each public depositor on deposit at such depository and the

23  amount of deposit insurance applicable to such deposits.

24         (2)  The potential loss to public depositors shall be

25  calculated by compiling claims received from such depositors.

26  The Chief Financial Officer Treasurer shall validate claims on

27  public deposit accounts which meet the requirements of s.

28  280.17 and are confirmed as provided in subsection (1).

29         (3)(a)  The loss to public depositors shall be

30  satisfied, insofar as possible, first through any applicable

31  deposit insurance and then through demanding payment under

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 1  letters of credit or the sale of collateral pledged or

 2  deposited by the defaulting depository. The Chief Financial

 3  Officer Treasurer may assess qualified public depositories as

 4  provided in paragraph (b) for the total loss if the demand for

 5  payment or sale of collateral cannot be accomplished within 7

 6  business days.

 7         (b)  The Chief Financial Officer Treasurer shall

 8  provide coverage of any remaining loss by assessment against

 9  the other qualified public depositories.  The Chief Financial

10  Officer Treasurer shall determine such assessment for each

11  qualified public depository by multiplying the total amount of

12  any remaining loss to all public depositors by a percentage

13  which represents the average monthly balance of public

14  deposits held by each qualified public depository during the

15  previous 12 months divided by the total average monthly

16  balances of public deposits held by all qualified public

17  depositories, excluding the defaulting depository, during the

18  same period. The assessment calculation shall be computed to

19  six decimal places.

20         (4)  Each qualified public depository shall pay its

21  assessment to the Chief Financial Officer Treasurer within 7

22  business days after it receives notice of the assessment. If a

23  depository fails to pay its assessment when due, the Chief

24  Financial Officer Treasurer shall satisfy the assessment by

25  demanding payment under letters of credit or selling

26  collateral pledged or deposited by that depository.

27         (5)  The Chief Financial Officer Treasurer shall

28  distribute the funds to the public depositors of the qualified

29  public depository in default according to their validated

30  claims. The Chief Financial Officer Treasurer, at his or her

31  discretion, may make partial payments to public depositors

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 1  that have experienced a loss of public funds which payments

 2  are critical to the immediate operations of the public entity.

 3  The public depositor requesting partial payment of a claim

 4  shall provide the Chief Financial Officer Treasurer with

 5  written documentation justifying the need for partial payment.

 6         (6)  Public depositors receiving payment under the

 7  provisions of this section shall assign to the Chief Financial

 8  Officer Treasurer any interest they may have in funds that may

 9  subsequently be made available to the qualified public

10  depository in default.  If the qualified public depository in

11  default or its receiver provides the funds to the Chief

12  Financial Officer Treasurer, the Chief Financial Officer

13  Treasurer shall distribute the funds, plus all accrued

14  interest which has accumulated from the investment of the

15  funds, if any, to the depositories which paid assessments on

16  the same pro rata basis as the assessments were paid.

17         (7)  Expenses incurred by the Chief Financial Officer

18  Treasurer in connection with a default or insolvency which are

19  not normally incurred by the Chief Financial Officer Treasurer

20  in the administration of this act must be paid out of the

21  amount paid under letters of credit or proceeds from the sale

22  of collateral.

23         Section 299.  Subsection (1) of section 280.085,

24  Florida Statutes, is amended to read:

25         280.085  Notice to claimants.--

26         (1)  Upon determining the default or insolvency of a

27  qualified public depository, the Chief Financial Officer

28  Treasurer shall notify, by first-class mail, all public

29  depositors that have complied with s. 280.17 of such default

30  or insolvency.  The notice shall direct all public depositors

31  having claims or demands against the Public Deposits Trust

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 1  Fund occasioned by the default or insolvency to file their

 2  claims with the Chief Financial Officer Treasurer within 30

 3  days after the date of the notice.

 4         Section 300.  Section 280.09, Florida Statutes, is

 5  amended to read:

 6         280.09  Public Deposits Trust Fund.--

 7         (1)  In order to facilitate the administration of this

 8  chapter, there is created the Public Deposits Trust Fund,

 9  hereafter in this section designated "the fund."  The proceeds

10  from the sale of securities or draw on letters of credit held

11  as collateral or from any assessment pursuant to s. 280.08

12  shall be deposited into the fund.  Any administrative penalty

13  collected pursuant to this chapter shall be deposited into the

14  Treasury Treasurer's Administrative and Investment Trust Fund.

15         (2)  The Chief Financial Officer Treasurer is

16  authorized to pay any losses to public depositors from the

17  fund, and there are hereby appropriated from the fund such

18  sums as may be necessary from time to time to pay the losses.

19  The term "losses," for purposes of this chapter, shall also

20  include losses of interest or other accumulations to the

21  public depositor as a result of penalties for early withdrawal

22  required by Depository Institution Deregulatory Commission

23  Regulations or applicable successor federal laws or

24  regulations because of suspension or disqualification of a

25  qualified public depository by the Chief Financial Officer

26  Treasurer pursuant to s. 280.05 or because of withdrawal from

27  the public deposits program pursuant to s. 280.11.  In that

28  event, the Chief Financial Officer Treasurer is authorized to

29  assess against the suspended, disqualified, or withdrawing

30  public depository, in addition to any amount authorized by any

31  other provision of this chapter, an administrative penalty

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 1  equal to the amount of the early withdrawal penalty and to pay

 2  that amount over to the public depositor as reimbursement for

 3  such loss.  Any money in the fund estimated not to be needed

 4  for immediate cash requirements shall be invested pursuant to

 5  s. 17.61 s. 18.125.

 6         Section 301.  Paragraphs (d) and (e) of subsection (1)

 7  and subsections (2), (3), (4), (5), and (6) of section 280.10,

 8  Florida Statutes, are amended to read:

 9         280.10  Effect of merger, acquisition, or

10  consolidation; change of name or address.--

11         (1)  When a qualified public depository is merged into,

12  acquired by, or consolidated with a bank, savings bank, or

13  savings association that is not a qualified public depository:

14         (d)  The resulting institution shall, within 90

15  calendar days after the effective date of the merger,

16  acquisition, or consolidation, deliver to the Chief Financial

17  Officer Treasurer:

18         1.  Documentation in its name as required for

19  participation in the public deposits program; or

20         2.  Written notice of intent to withdraw from the

21  program as provided in s. 280.11 and a proposed effective date

22  of withdrawal which shall be within 180 days after the

23  effective date of the acquisition, merger, or consolidation of

24  the former institution.

25         (e)  If the resulting institution does not meet

26  qualifications to become a qualified public depository or does

27  not submit required documentation within 90 calendar days

28  after the effective date of the merger, acquisition, or

29  consolidation, the Chief Financial Officer Treasurer shall

30  initiate mandatory withdrawal actions as provided in s. 280.11

31  and shall set an effective date of withdrawal that is within

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 1  180 days after the effective date of the acquisition, merger,

 2  or consolidation of the former institution.

 3         (2)  When a qualified public depository disposes of any

 4  of its Florida public deposits or collateral securing such

 5  deposits in a manner not covered by subsection (1), the

 6  qualified public depository originally holding the public

 7  deposits shall be responsible for:

 8         (a)  Ensuring the institution receiving such public

 9  deposits becomes a qualified public depository and meets

10  collateral requirements with the Chief Financial Officer

11  Treasurer as part of the transaction.

12         (b)  Notifying the Chief Financial Officer Treasurer

13  within 30 calendar days after the final approval by the

14  appropriate regulator.

15  

16  A qualified public depository that fails to meet such

17  responsibilities shall continue to collateralize and report

18  such public deposits until the receiving institution becomes a

19  qualified public depository and collateralizes the deposits or

20  the deposits are returned to the governmental unit.

21         (3)  The qualified public depository shall notify the

22  Chief Financial Officer Treasurer of any acquisition or merger

23  within 30 calendar days after the final approval of the

24  acquisition or merger by its appropriate regulator.

25         (4)  Collateral subject to a collateral agreement may

26  not be released by the Chief Financial Officer Treasurer or

27  the custodian until the assumed liability is evidenced by the

28  deposit of collateral pursuant to the collateral agreement of

29  the successor entity.  The reporting requirement and pledge of

30  collateral will remain in force until the Chief Financial

31  Officer Treasurer determines that the liability no longer

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 1  exists.  The surviving or new qualified public depository

 2  shall be responsible and liable for all of the liabilities and

 3  obligations of each qualified public depository merged with or

 4  acquired by it.

 5         (5)  Each qualified public depository shall report any

 6  change of name and address to the Chief Financial Officer

 7  Treasurer on a form provided by the Chief Financial Officer

 8  Treasurer regardless of whether the name change is a result of

 9  an acquisition, merger, or consolidation. Notification of such

10  change must be made within 30 calendar days after the

11  effective date of the change.

12         (6)  The Chief Financial Officer Treasurer shall adopt

13  rules establishing procedures for mergers, acquisitions,

14  consolidations, and changes in name and address, providing

15  forms, and clarifying terms.

16         Section 302.  Section 280.11, Florida Statutes, is

17  amended to read:

18         280.11  Withdrawal from public deposits program; return

19  of pledged collateral.--

20         (1)  A qualified public depository may withdraw from

21  the public deposits program by giving written notice to the

22  Chief Financial Officer Treasurer.  The contingent liability,

23  required collateral, and reporting requirements of the

24  depository withdrawing from the program shall continue for a

25  period of 12 months after the effective date of the

26  withdrawal, except that the filing of reports may no longer be

27  required when the average monthly balance of public deposits

28  is equal to zero.  Notice of withdrawal shall be mailed or

29  delivered in sufficient time to be received by the Chief

30  Financial Officer Treasurer at least 30 days before the

31  effective date of withdrawal. The Chief Financial Officer

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 1  Treasurer shall timely publish the withdrawal notice in the

 2  Florida Administrative Weekly which shall constitute notice to

 3  all depositors.  The withdrawing depository shall not receive

 4  or retain public deposits after the effective date of the

 5  withdrawal until such time as it again becomes a qualified

 6  public depository. The Chief Financial Officer Treasurer

 7  shall, upon request, return to the depository that portion of

 8  the collateral pledged that is in excess of the required

 9  collateral as reported on the current public depository

10  monthly report.  Losses of interest or other accumulations, if

11  any, because of withdrawal under this section shall be

12  assessed and paid as provided in s. 280.09.

13         (2)  A qualified public depository which has been

14  disqualified pursuant to s. 280.051 shall not receive or

15  retain public deposits after the effective date of the

16  disqualification. Notice of and procedures for

17  disqualification shall be made in accordance with ss. 280.052

18  and 280.053. The Chief Financial Officer Treasurer shall, upon

19  request, return to the depository that portion of the

20  collateral pledged that is in excess of the required

21  collateral as reported on the current public depository

22  monthly report. Losses of interest or other accumulation, if

23  any, because of disqualification shall be paid as provided in

24  s. 280.09(2).

25         (3)  A qualified public depository which is required to

26  withdraw from the public deposits program pursuant to s.

27  280.05(1)(b) shall not receive or retain public deposits after

28  the effective date of withdrawal. The contingent liability,

29  required collateral, and reporting requirements of the

30  withdrawing depository shall continue until the effective date

31  of withdrawal. Notice of withdrawal (order of discontinuance)

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 1  from the Chief Financial Officer Treasurer shall be mailed to

 2  the qualified public depository by registered or certified

 3  mail. Penalties incurred because of withdrawal from the public

 4  deposits program shall be the responsibility of the

 5  withdrawing depository.

 6         Section 303.  Subsection (2), paragraphs (a), (b), (d),

 7  and (f) of subsection (5), and subsections (6), (7), and (8)

 8  of section 280.13, Florida Statutes, are amended to read:

 9         280.13  Eligible collateral.--

10         (2)  In addition to the securities listed in subsection

11  (1), the Chief Financial Officer Treasurer may, in his or her

12  discretion, allow the pledge of the following types of

13  securities. The Chief Financial Officer Treasurer shall, by

14  rule, define any restrictions, specific criteria, or

15  circumstances for which these instruments will be acceptable.

16         (a)  Securities of, or other interests in, any open-end

17  management investment company registered under the Investment

18  Company Act of 1940, 15 U.S.C. ss. 80a-1 et seq., as amended

19  from time to time, provided the portfolio of such investment

20  company is limited to direct obligations of the United States

21  Government and to repurchase agreements fully collateralized

22  by such direct obligations of the United States Government and

23  provided such investment company takes delivery of such

24  collateral either directly or through an authorized custodian.

25         (b)  Collateralized Mortgage Obligations.

26         (c)  Real Estate Mortgage Investment Conduits.

27         (5)  Letters of credit issued by a Federal Home Loan

28  Bank are eligible as collateral under this section provided

29  that:

30  

31  

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 1         (a)  The letter of credit has been delivered to the

 2  Chief Financial Officer Treasurer in the standard format

 3  approved by the Chief Financial Officer Treasurer.

 4         (b)  The letter of credit meets required conditions of:

 5         1.  Being irrevocable.

 6         2.  Being clean and unconditional and containing a

 7  statement that it is not subject to any agreement, condition,

 8  or qualification outside of the letter of credit and providing

 9  that a beneficiary need only present the original letter of

10  credit with any amendments and the demand form to promptly

11  obtain funds, and that no other document need be presented.

12         3.  Being issued, presentable, and payable at a Federal

13  Home Loan Bank in United States dollars.  Presentation may be

14  made by the beneficiary submitting the original letter of

15  credit, including any amendments, and the demand in writing,

16  by overnight delivery.

17         4.  Containing a statement that identifies and defines

18  the Chief Financial Officer Treasurer as beneficiary.

19         5.  Containing an issue date and a date of expiration.

20         6.  Containing a term of at least 1 year and an

21  evergreen clause that provides at least 60 days written notice

22  to the beneficiary prior to expiration date for nonrenewal.

23         7.  Containing a statement that it is subject to and

24  governed by the laws of the State of Florida and that, in the

25  event of any conflict with other laws, the laws of the State

26  of Florida will control.

27         8.  Containing a statement that the letter of credit is

28  an obligation of the Federal Home Loan Bank and is in no way

29  contingent upon reimbursement.

30         9.  Any other provision found necessary under the

31  Uniform Commercial Code--Letters of Credit.

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 1         (d)  The Federal Home Loan Bank issuing the letter of

 2  credit agrees to provide confirmation upon request from the

 3  Chief Financial Officer Treasurer.  Such confirmation shall be

 4  provided within 15 working days after the request, in a format

 5  prescribed by the Chief Financial Officer Treasurer, and shall

 6  require no identification other than the qualified public

 7  depository's name and location.

 8         (f)  The qualified public depository, if notified by

 9  the Chief Financial Officer Treasurer, shall not be allowed to

10  use letters of credit if the Federal Home Loan Bank fails to

11  pay a draw request as provided for in the letters of credit or

12  fails to properly complete a confirmation of such letters of

13  credit.

14         (6)  Cash held by the Chief Financial Officer Treasurer

15  in the Treasury Cash Deposit Trust Fund or by a custodian is

16  eligible as collateral under this section.  Interest earned on

17  cash deposits that is in excess of required collateral shall

18  be paid to the qualified public depository upon request.

19         (7)  The Chief Financial Officer Treasurer may

20  disapprove any security or letter of credit that does not meet

21  the requirements of this section or any rule adopted pursuant

22  to this section or any security for which no current market

23  price can be obtained from a nationally recognized source

24  deemed acceptable to the Chief Financial Officer Treasurer or

25  cannot be converted to cash.

26         (8)  The Chief Financial Officer Treasurer shall adopt

27  rules defining restrictions and special requirements for

28  eligible collateral and clarifying terms.

29         Section 304.  Paragraphs (a), (b), (d), and (e) of

30  subsection (1) and subsection (3) of section 280.16, Florida

31  Statutes, are amended to read:

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 1         280.16  Requirements of qualified public depositories;

 2  confidentiality.--

 3         (1)  In addition to any other requirements specified in

 4  this chapter, qualified public depositories shall:

 5         (a)  Take the following actions for each public deposit

 6  account:

 7         1.  Identify the account as a "Florida public deposit"

 8  on the deposit account record with the name of the public

 9  depositor or provide a unique code for the account for such

10  designation.

11         2.  When the form prescribed by the Chief Financial

12  Officer Treasurer for acknowledgment of receipt of each public

13  deposit account is presented to the qualified public

14  depository by the public depositor opening an account, the

15  qualified public depository shall execute and return the

16  completed form to the public depositor.

17         3.  When the acknowledgment of receipt form is

18  presented to the qualified public depository by the public

19  depositor due to a change of account name, account number, or

20  qualified public depository name on an existing public deposit

21  account, the qualified public depository shall execute and

22  return the completed form to the public depositor within 45

23  calendar days after such presentation.

24         4.  When the acknowledgment of receipt form is

25  presented to the qualified public depository by the public

26  depositor on an account existing before July 1, 1998, the

27  qualified public depository shall execute and return the

28  completed form to the public depositor within 45 calendar days

29  after such presentation.

30         (b)  Within 15 days after the end of each calendar

31  month, or when requested by the Chief Financial Officer

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 1  Treasurer, submit to the Chief Financial Officer Treasurer a

 2  written report, under oath, indicating the average daily

 3  balance of all public deposits held by it during the reported

 4  month, required collateral, a detailed schedule of all

 5  securities pledged as collateral, selected financial

 6  information, and any other information that the Chief

 7  Financial Officer's Treasurer determines necessary to

 8  administer this chapter.

 9         (d)  Submit to the Chief Financial Officer Treasurer

10  annually, not later than November 30, a report of all public

11  deposits held for the credit of all public depositors at the

12  close of business on September 30. Such annual report shall

13  consist of public deposit information in a report format

14  prescribed by the Chief Financial Officer Treasurer. The

15  manner of required filing may be as a signed writing or

16  electronic data transmission, at the discretion of the

17  Treasurer.

18         (e)  Submit to the Chief Financial Officer Treasurer

19  not later than the date required to be filed with the federal

20  agency:

21         1.  A copy of the quarterly Consolidated Reports of

22  Condition and Income, and any amended reports, required by the

23  Federal Deposit Insurance Act, 12 U.S.C. ss. 1811 et seq., if

24  such depository is a bank; or

25         2.  A copy of the Thrift Financial Report, and any

26  amended reports, required to be filed with the Office of

27  Thrift Supervision if such depository is a savings and loan

28  association.

29         (3)  Any information contained in a report of a

30  qualified public depository required under this chapter or any

31  rule adopted under this chapter, together with any information

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 1  required of a financial institution that is not a qualified

 2  public depository, shall, if made confidential by any law of

 3  the United States or of this state, be considered confidential

 4  and exempt from the provisions of s. 119.07(1) and not subject

 5  to dissemination to anyone other than the Chief Financial

 6  Officer Treasurer under the provisions of this chapter;

 7  however, it is the responsibility of each qualified public

 8  depository and each financial institution from which

 9  information is required to inform the Chief Financial Officer

10  Treasurer of information that is confidential and the law

11  providing for the confidentiality of that information, and the

12  Chief Financial Officer Treasurer does not have a duty to

13  inquire into whether information is confidential.

14         Section 305.  Paragraphs (b) and (c) of subsection (2),

15  subsections (3), (4), and (6), and paragraph (c) of subsection

16  (7) of section 280.17, Florida Statutes, are amended to read:

17         280.17  Requirements for public depositors; notice to

18  public depositors and governmental units; loss of

19  protection.--In addition to any other requirement specified in

20  this chapter, public depositors shall comply with the

21  following:

22         (2)  Beginning July 1, 1998, each public depositor

23  shall take the following actions for each public deposit

24  account:

25         (b)  Execute a form prescribed by the Chief Financial

26  Officer Treasurer for identification of each public deposit

27  account and obtain acknowledgment of receipt on the form from

28  the qualified public depository at the time of opening the

29  account. Such public deposit identification and acknowledgment

30  form shall be replaced with a current form as required in

31  

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 1  subsection (3).  A public deposit account existing before July

 2  1, 1998, must have a form completed before September 30, 1998.

 3         (c)  Maintain the current public deposit identification

 4  and acknowledgment form as a valuable record.  Such form is

 5  mandatory for filing a claim with the Chief Financial Officer

 6  Treasurer upon default or insolvency of a qualified public

 7  depository.

 8         (3)  Each public depositor shall review the Chief

 9  Financial Officer's Treasurer's published list of qualified

10  public depositories and ascertain the status of depositories

11  used.  A public depositor shall, for status changes of

12  depositories:

13         (a)  Execute a replacement public deposit

14  identification and acknowledgment form, as described in

15  subsection (2), for each public deposit account when there is

16  a merger, acquisition, name change, or other event which

17  changes the account name, account number, or name of the

18  qualified public depository.

19         (b)  Move and close public deposit accounts when an

20  institution is not included in the authorized list of

21  qualified public depositories or is shown as withdrawing.

22         (4)  Whenever public deposits are in a qualified public

23  depository that has been declared to be in default or

24  insolvent, each public depositor shall:

25         (a)  Notify the Chief Financial Officer Treasurer

26  immediately by telecommunication after receiving notice of the

27  default or insolvency from the receiver of the depository with

28  subsequent written confirmation and a copy of the notice.

29         (b)  Submit to the Chief Financial Officer Treasurer

30  for each public deposit, within 30 days after the date of

31  

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 1  official notification from the Chief Financial Officer

 2  Treasurer, the following:

 3         1.  A claim form and agreement, as prescribed by the

 4  Chief Financial Officer Treasurer, executed under oath,

 5  accompanied by proof of authority to execute the form on

 6  behalf of the public depositor.

 7         2.  A completed public deposit identification and

 8  acknowledgment form, as described in subsection (2).

 9         3.  Evidence of the insurance afforded the deposit

10  pursuant to the Federal Deposit Insurance Act.

11         (6)  Each public depositor shall submit, not later than

12  November 30, an annual report to the Chief Financial Officer

13  Treasurer which shall include:

14         (a)  The official name, mailing address, and federal

15  employer identification number of the public depositor.

16         (b)  Verification that confirmation of public deposit

17  information as of September 30, as described in subsection

18  (5), has been completed.

19         (c)  Public deposit information in a report format

20  prescribed by the Chief Financial Officer Treasurer. The

21  manner of required filing may be as a signed writing or

22  electronic data transmission, at the discretion of the Chief

23  Financial Officer Treasurer.

24         (d)  Confirmation that a current public deposit

25  identification and acknowledgment form, as described in

26  subsection (2), has been completed for each public deposit

27  account and is in the possession of the public depositor.

28         (7)  Notices relating to the public deposits program

29  shall be mailed to public depositors and governmental units

30  from a list developed annually from:

31  

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 1         (c)  Governmental units established during the year

 2  that filed an annual report as a new governmental unit or

 3  otherwise furnished in writing to the Chief Financial Officer

 4  Treasurer its official name, address, and federal employer

 5  identification number.

 6         Section 306.  Subsection (2) of section 280.18, Florida

 7  Statutes, is amended to read:

 8         280.18  Protection of public depositors; liability of

 9  the state.--

10         (2)  The liability of the state, the Chief Financial

11  Officer Treasurer, or any state agency, or any employee or

12  agent of the state, the Chief Financial Officer Treasurer, or

13  a state agency, for any action taken in the performance of

14  their powers and duties under this chapter shall be limited to

15  that as a public depositor.

16         Section 307.  Section 280.19, Florida Statutes, is

17  amended to read:

18         280.19  Rules.--The Chief Financial Officer Treasurer

19  shall adopt rules pursuant to ss. 120.536(1) and 120.54 to

20  administer the provisions of this chapter.

21         Section 308.  Paragraph (a) of subsection (2) of

22  section 282.1095, Florida Statutes, is amended to read:

23         282.1095  State agency law enforcement radio system.--

24         (2)(a)  The Joint Task Force on State Agency Law

25  Enforcement Communications shall consist of eight members, as

26  follows:

27         1.  A representative of the Division of Alcoholic

28  Beverages and Tobacco of the Department of Business and

29  Professional Regulation who shall be appointed by the

30  secretary of the department.

31  

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 1         2.  A representative of the Division of Florida Highway

 2  Patrol of the Department of Highway Safety and Motor Vehicles

 3  who shall be appointed by the executive director of the

 4  department.

 5         3.  A representative of the Department of Law

 6  Enforcement who shall be appointed by the executive director

 7  of the department.

 8         4.  A representative of the Fish and Wildlife

 9  Conservation Commission who shall be appointed by the

10  executive director of the commission.

11         5.  A representative of the Division of Law Enforcement

12  of the Department of Environmental Protection who shall be

13  appointed by the secretary of the department.

14         6.  A representative of the Department of Corrections

15  who shall be appointed by the secretary of the department.

16         7.  A representative of the Division of State Fire

17  Marshal of the Department of Financial Services Insurance who

18  shall be appointed by the State Fire Marshal.

19         8.  A representative of the Department of

20  Transportation who shall be appointed by the secretary of the

21  department.

22         Section 309.  Subsections (2) and (3) of section

23  284.02, Florida Statutes, are amended to read:

24         284.02  Payment of premiums by each agency; handling of

25  funds; payment of losses and expenses.--

26         (2)  All premiums paid into the fund and all moneys

27  received by the fund from investment or any other source

28  pursuant to said program shall be held by the Department of

29  Financial Services Insurance and used for the purpose of

30  paying losses, expenses incurred in adjustment of losses,

31  premiums for reinsurance, and operating expenses.

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 1         (3)  The Department of Financial Services Insurance is

 2  authorized to employ a director of the fund and necessary

 3  administrative and clerical personnel, actuaries, consultants,

 4  and adjusters to maintain, operate, and administer the fund

 5  and to underwrite all certificates of insurance issued by the

 6  fund.  All salaries and expenses of administration and

 7  operation shall be paid from the fund.

 8         Section 310.  Section 284.04, Florida Statutes, is

 9  amended to read:

10         284.04  Notice and information required by Department

11  of Financial Services Insurance of all newly erected or

12  acquired state property subject to insurance.--The Department

13  of Management Services and all agencies in charge of state

14  property shall notify the Department of Financial Services

15  Insurance of all newly erected or acquired property subject to

16  coverage as soon as erected or acquired, giving its value,

17  type of construction, location, whether inside or outside of

18  corporate limits, occupancy, and any other information the

19  Department of Financial Services Insurance may require in

20  connection with such property.  Such department or agency

21  shall also notify the Department of Financial Services

22  Insurance immediately of any change in value or occupancy of

23  any property covered by the fund.  Unless the above data is

24  submitted in writing within a reasonable time following such

25  erection, acquisition, or change, the Department of Financial

26  Services Insurance shall provide insurance coverage to the

27  extent shown by the last notification in writing to the fund

28  or in accordance with the last valuation shown by fund

29  records.  In case of disagreement between the Department of

30  Financial Services Insurance and the agency or person in

31  charge of any covered state property as to its true value, the

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 1  amount of the insurance to be carried thereon, the proper

 2  premium rate or rates, or amount of loss settlement, the

 3  matter in disagreement shall be determined by the Department

 4  of Management Services.

 5         Section 311.  Section 284.05, Florida Statutes, is

 6  amended to read:

 7         284.05  Inspection of insured state property.--The

 8  Department of Financial Services Insurance shall inspect all

 9  permanent buildings insured by the State Risk Management Trust

10  Fund, and whenever conditions are found to exist which, in the

11  opinion of the Department of Financial Services Insurance, are

12  hazardous from the standpoint of destruction by fire or other

13  loss, the Department of Financial Services Insurance may order

14  the same repaired or remedied, and the agency, board, or

15  person in charge of such property is required to have such

16  dangerous conditions immediately repaired or remedied upon

17  written notice from the Department of Financial Services

18  Insurance of such hazardous conditions.  Such amounts as may

19  be necessary to comply with such notice or notices shall be

20  paid by the Department of Management Services or by the

21  agency, board, or person in charge of such property out of any

22  moneys appropriated for the maintenance of the respective

23  agency or for the repairs or permanent improvement of such

24  properties or from any incidental or contingent funds they may

25  have on hand. In the event of a disagreement between the

26  Department of Financial Services Insurance and the agency,

27  board, or person having charge of such property as to the

28  necessity of the repairs or remedies ordered, the matter in

29  disagreement shall be determined by the Department of

30  Management Services.

31  

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 1         Section 312.  Section 284.06, Florida Statutes, is

 2  amended to read:

 3         284.06  Annual report to Governor.--The Department of

 4  Financial Services Insurance shall report annually to the

 5  Governor the investigations which have been made and the

 6  actions which have been taken to decrease the fire hazard of

 7  the various insurable properties of the state, together with

 8  its recommendations as to further safeguards and improvements.

 9         Section 313.  Section 284.08, Florida Statutes, is

10  amended to read:

11         284.08  Reinsurance on excess coverage and approval by

12  Department of Management Services.--The Department of

13  Financial Services Insurance shall determine what excess

14  coverage is necessary and may purchase reinsurance thereon

15  upon approval by the Department of Management Services.

16         Section 314.  Section 284.14, Florida Statutes, is

17  amended to read:

18         284.14  State Risk Management Trust Fund; leasehold

19  interest.--In the event the state or any department or agency

20  thereof has acquired or hereafter acquires a leasehold

21  interest in any improved real property and by the terms and

22  provisions of said lease it is obligated to insure such

23  premises against loss by fire or other hazard to such

24  premises, it shall insure such premises in the State Risk

25  Management Trust Fund as required by the terms of said lease

26  or as required by the provisions of this chapter.  No state

27  agency shall enter into or acquire any such leasehold interest

28  until the coverages required to be maintained by the

29  provisions of the lease are approved in writing by the

30  Department of Financial Services Insurance.

31  

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 1         Section 315.  Section 284.17, Florida Statutes, is

 2  amended to read:

 3         284.17  Rules.--The Department of Financial Services

 4  Insurance has authority to adopt rules pursuant to ss.

 5  120.536(1) and 120.54 to implement the provisions of this

 6  chapter.

 7         Section 316.  Section 284.30, Florida Statutes, is

 8  amended to read:

 9         284.30  State Risk Management Trust Fund; coverages to

10  be provided.--A state self-insurance fund, designated as the

11  "State Risk Management Trust Fund," is created to be set up by

12  the Department of Financial Services Insurance and

13  administered with a program of risk management, which fund is

14  to provide insurance, as authorized by s. 284.33, for workers'

15  compensation, general liability, fleet automotive liability,

16  federal civil rights actions under 42 U.S.C. s. 1983 or

17  similar federal statutes, and court-awarded attorney's fees in

18  other proceedings against the state except for such awards in

19  eminent domain or for inverse condemnation or for awards by

20  the Public Employees Relations Commission.  A party to a suit

21  in any court, to be entitled to have his or her attorney's

22  fees paid by the state or any of its agencies, must serve a

23  copy of the pleading claiming the fees on the Department of

24  Financial Services Insurance; and thereafter the department

25  shall be entitled to participate with the agency in the

26  defense of the suit and any appeal thereof with respect to

27  such fees.

28         Section 317.  Section 284.31, Florida Statutes, is

29  amended to read:

30         284.31  Scope and types of coverages; separate

31  accounts.--The Insurance Risk Management Trust Fund shall,

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 1  unless specifically excluded by the Department of Financial

 2  Services Insurance, cover all departments of the State of

 3  Florida and their employees, agents, and volunteers and shall

 4  provide separate accounts for workers' compensation, general

 5  liability, fleet automotive liability, federal civil rights

 6  actions under 42 U.S.C. s. 1983 or similar federal statutes,

 7  and court-awarded attorney's fees in other proceedings against

 8  the state except for such awards in eminent domain or for

 9  inverse condemnation or for awards by the Public Employees

10  Relations Commission.  Unless specifically excluded by the

11  Department of Financial Services Insurance, the insurance risk

12  management trust fund shall provide fleet automotive liability

13  coverage to motor vehicles titled to the state, or to any

14  department of the state, when such motor vehicles are used by

15  community transportation coordinators performing, under

16  contract to the appropriate department of the state, services

17  for the transportation disadvantaged under part I of chapter

18  427. Such fleet automotive liability coverage shall be primary

19  and shall be subject to the provisions of s. 768.28 and parts

20  II and III of chapter 284, and applicable rules adopted

21  thereunder, and the terms and conditions of the certificate of

22  coverage issued by the Department of Financial Services

23  Insurance.

24         Section 318.  Section 284.32, Florida Statutes, is

25  amended to read:

26         284.32  Department of Financial Services Insurance to

27  implement and consolidate.--The Department of Financial

28  Services Insurance is hereby authorized to effect a

29  consolidation and combination of all insurance coverages

30  provided herein into one insurance program in accordance with

31  the provisions of part I of chapter 287.

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 1         Section 319.  Subsection (1) of section 284.33, Florida

 2  Statutes, is amended to read:

 3         284.33  Purchase of insurance, reinsurance, and

 4  services.--

 5         (1)  The Department of Financial Services Insurance is

 6  authorized to provide insurance, specific excess insurance,

 7  and aggregate excess insurance through the Department of

 8  Management Services, pursuant to the provisions of part I of

 9  chapter 287, as necessary to provide insurance coverages

10  authorized by this part, consistent with market availability.

11  However, the Department of Financial Services Insurance may

12  directly purchase annuities by using a structured settlement

13  insurance consulting firm selected by the department to assist

14  in the settlement of claims being handled by the Division of

15  Risk Management. The selection of the structured settlement

16  insurance services consultant shall be made by using

17  competitive sealed proposals. The consulting firm shall act as

18  an agent of record for the department in procuring the best

19  annuity products available to facilitate structured settlement

20  of claims, considering price, insurer financial strength, and

21  the best interests of the state risk management program.

22  Purchase of annuities by the department using a structured

23  settlement method is excepted from competitive sealed bidding

24  or proposal requirements. The Department of Financial Services

25  Insurance is further authorized to purchase such risk

26  management services, including, but not limited to, risk and

27  claims control; safety management; and legal, investigative,

28  and adjustment services, as may be required and pay claims.

29  The department may contract with a service organization for

30  such services and advance money to such service organization

31  for deposit in a special checking account for paying claims

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 1  made against the state under the provisions of this part.  The

 2  special checking account shall be maintained in this state in

 3  a bank or savings association organized under the laws of this

 4  state or of the United States. The department may replenish

 5  such account as often as necessary upon the presentation by

 6  the service organization of documentation for payments of

 7  claims equal to the amount of the requested reimbursement.

 8         Section 320.  Section 284.34, Florida Statutes, is

 9  amended to read:

10         284.34  Professional medical liability of the

11  university boards of trustees and nuclear energy liability

12  excluded.--Unless specifically authorized by the Department of

13  Financial Services Insurance, no coverages shall be provided

14  by this fund for professional medical liability insurance for

15  the university boards of trustees or the physicians, officers,

16  employees, or agents of any board or for liability related to

17  nuclear energy which is ordinarily subject to the standard

18  nuclear energy liability exclusion of conventional liability

19  insurance policies.  This section does not affect the

20  self-insurance programs of the university boards of trustees

21  established pursuant to s. 1004.24.

22         Section 321.  Section 284.35, Florida Statutes, is

23  amended to read:

24         284.35  Administrative personnel; expenses to be paid

25  from fund.--The Department of Financial Services Insurance is

26  hereby authorized, in accordance with current budget and

27  personnel requirements, to employ necessary administrative and

28  clerical personnel and actuarial consultants, as necessary to

29  maintain, operate, and administer the fund.  All salaries and

30  expenses of administration and operation shall be paid from

31  the fund.

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 1         Section 322.  Section 284.37, Florida Statutes, is

 2  amended to read:

 3         284.37  Premium and investment accruals used for fund

 4  purposes.--All premiums paid into the fund and all moneys from

 5  investments or any other source pursuant to said program shall

 6  be held by the Department of Financial Services Insurance and

 7  used for the purpose of paying losses, premiums for insurance,

 8  risk and claims management services, and operating expenses.

 9         Section 323.  Section 284.385, Florida Statutes, is

10  amended to read:

11         284.385  Reporting and handling of claims.--All

12  departments covered by the State Risk Management Trust Fund

13  under this part shall immediately report all known or

14  potential claims to the Department of Financial Services

15  Insurance for handling, except employment complaints which

16  have not been filed with the Florida Human Relations

17  Commission, Equal Employment Opportunity Commission, or any

18  similar agency. When deemed necessary, the Department of

19  Financial Services Insurance shall assign or reassign the

20  claim to counsel.  The assigned counsel shall report regularly

21  to the Department of Financial Services Insurance or to the

22  covered department on the status of any such claims or

23  litigation as required by the Department of Financial Services

24  Insurance.  No such claim shall be compromised or settled for

25  monetary compensation without the prior approval of the

26  Department of Financial Services Insurance and prior

27  notification to the covered department.  All departments shall

28  cooperate with the Department of Financial Services Insurance

29  in its handling of claims. The Department of Financial

30  Services and Insurance, the Department of Management Services,

31  and the Department of Banking and Finance, with the

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 1  cooperation of the state attorneys and the clerks of the

 2  courts, shall develop a system to coordinate the exchange of

 3  information concerning claims for and against the state, its

 4  agencies, and its subdivisions, to assist in collection of

 5  amounts due to them. The covered department shall have the

 6  responsibility for the settlement of any claim for injunctive

 7  or affirmative relief under 42 U.S.C. s. 1983 or similar

 8  federal or state statutes.  The payment of a settlement or

 9  judgment for any claim covered and reported under this part

10  shall be made only from the State Risk Management Trust Fund.

11         Section 324.  Section 284.39, Florida Statutes, is

12  amended to read:

13         284.39  Adoption Promulgation of rules.--The Department

14  of Financial Services may adopt Insurance is authorized to

15  promulgate rules and regulations for the proper management and

16  maintenance of the fund.

17         Section 325.  Subsections (1) and (2) of section

18  284.40, Florida Statutes, are amended to read:

19         284.40  Division of Risk Management.--

20         (1)  It shall be the responsibility of the Division of

21  Risk Management of the Department of Financial Services

22  Insurance to administer this part and the provisions of s.

23  287.131.

24         (2)  The claim files maintained by the Division of Risk

25  Management shall be confidential, shall be only for the usage

26  by the Department of Financial Services Insurance in

27  fulfilling its duties and responsibilities under this part,

28  and shall be exempt from the provisions of s. 119.07(1).

29         Section 326.  Subsection (1) of section 284.41, Florida

30  Statutes, is amended to read:

31  

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 1         284.41  Transfer of personnel and funds to the Division

 2  of Risk Management.--

 3         (1)  All personnel and funds otherwise allocated to the

 4  Department of Financial Services Insurance for this purpose

 5  are transferred to the Division of Risk Management.

 6         Section 327.  Subsection (1) of section 284.42, Florida

 7  Statutes, is amended to read:

 8         284.42  Reports on state insurance program.--

 9         (1)  The Department of Financial Services Insurance,

10  with the Department of Management Services, shall make an

11  analysis of the state insurance program annually, which shall

12  include:

13         (a)  Complete underwriting information as to the nature

14  of the risks accepted for self-insurance and those risks that

15  are transferred to the insurance market.

16         (b)  The funds allocated to the Florida Casualty Risk

17  Management Trust Fund and premiums paid for insurance through

18  the market.

19         (c)  The method of handling legal matters and the cost

20  allocated.

21         (d)  The method and cost of handling inspection and

22  engineering of risks.

23         (e)  The cost of risk management service purchased.

24         (f)  The cost of managing the State Insurance Program

25  by the Department of Financial Services Insurance and the

26  Department of Management Services.

27         Section 328.  Subsections (4) and (7) of section

28  284.44, Florida Statutes, are amended to read:

29         284.44  Salary indemnification costs of state

30  agencies.--

31  

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 1         (4)  For the purpose of administering this section, the

 2  Division of Risk Management of the Department of Financial

 3  Services Insurance shall continue to pay all claims, but shall

 4  be periodically reimbursed from funds of state agencies for

 5  initial salary indemnification costs for which they are

 6  responsible.

 7         (7)  If a state agency fails to pay casualty increase

 8  premiums or salary indemnification reimbursements within 30

 9  days after being billed, the Division of Risk Management shall

10  advise the Chief Financial Officer Comptroller.  After

11  verifying the accuracy of the billing, the Chief Financial

12  Officer Comptroller shall transfer the appropriate amount from

13  any available funds of the delinquent state agency to the

14  State Risk Management Trust Fund.

15         Section 329.  Subsection (1) of section 284.50, Florida

16  Statutes, is amended to read:

17         284.50  Loss prevention program; safety coordinators;

18  Interagency Advisory Council on Loss Prevention; employee

19  recognition program.--

20         (1)  The head of each department of state government,

21  except the Legislature, shall designate a safety coordinator.

22  Such safety coordinator must be an employee of the department

23  and must hold a position which has responsibilities comparable

24  to those of an employee in the Senior Management System.  The

25  Department of Financial Services Insurance shall provide

26  appropriate training to the safety coordinators to permit them

27  to effectively perform their duties within their respective

28  departments.  Each safety coordinator shall, at the direction

29  of his or her department head:

30  

31  

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 1         (a)  Develop and implement the loss prevention program,

 2  a comprehensive departmental safety program which shall

 3  include a statement of safety policy and responsibility.

 4         (b)  Provide for regular and periodic facility and

 5  equipment inspections.

 6         (c)  Investigate job-related employee accidents of his

 7  or her department.

 8         (d)  Establish a program to promote increased safety

 9  awareness among employees.

10         Section 330.  Subsection (8) and paragraph (c) of

11  subsection (15) of section 287.042, Florida Statutes, are

12  amended to read:

13         287.042  Powers, duties, and functions.--The department

14  shall have the following powers, duties, and functions:

15         (8)  To provide any commodity and contractual service

16  purchasing rules to the Chief Financial Officer Comptroller

17  and all agencies through an electronic medium or other means.

18  Agencies may not approve any account or request any payment of

19  any account for the purchase of any commodity or the

20  procurement of any contractual service covered by a purchasing

21  or contractual service rule except as authorized therein.  The

22  department shall furnish copies of rules adopted by the

23  department to any county, municipality, or other local public

24  agency requesting them.

25         (15)

26         (c)  Agencies that sign such joint agreements are

27  financially obligated for their portion of the agreed-upon

28  funds. If any agency becomes more than 90 days delinquent in

29  paying such funds, the department shall certify to the Chief

30  Financial Officer Comptroller the amount due, and the Chief

31  Financial Officer Comptroller shall transfer the amount due to

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 1  the Grants and Donations Trust Fund of the department from any

 2  of the agency's available funds. The Chief Financial Officer

 3  Comptroller shall report all such transfers and the reasons

 4  for such transfers to the Executive Office of the Governor and

 5  the legislative appropriations committees.

 6         Section 331.  Paragraph (a) of subsection (5) of

 7  section 287.057, Florida Statutes, is amended to read:

 8         287.057  Procurement of commodities or contractual

 9  services.--

10         (5)  When the purchase price of commodities or

11  contractual services exceeds the threshold amount provided in

12  s. 287.017 for CATEGORY TWO, no purchase of commodities or

13  contractual services may be made without receiving competitive

14  sealed bids, competitive sealed proposals, or competitive

15  sealed replies unless:

16         (a)  The agency head determines in writing that an

17  immediate danger to the public health, safety, or welfare or

18  other substantial loss to the state requires emergency action.

19  After the agency head makes such a written determination, the

20  agency may proceed with the procurement of commodities or

21  contractual services necessitated by the immediate danger,

22  without receiving competitive sealed bids, competitive sealed

23  proposals, or competitive sealed replies. However, such

24  emergency procurement shall be made by obtaining pricing

25  information from at least two prospective vendors, which must

26  be retained in the contract file, unless the agency determines

27  in writing that the time required to obtain pricing

28  information will increase the immediate danger to the public

29  health, safety, or welfare or other substantial loss to the

30  state. The agency shall furnish copies of all written

31  determinations certified under oath and any other documents

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 1  relating to the emergency action to the department.  A copy of

 2  the statement shall be furnished to the Chief Financial

 3  Officer Comptroller with the voucher authorizing payment.  The

 4  individual purchase of personal clothing, shelter, or supplies

 5  which are needed on an emergency basis to avoid

 6  institutionalization or placement in a more restrictive

 7  setting is an emergency for the purposes of this paragraph,

 8  and the filing with the department of such statement is not

 9  required in such circumstances.  In the case of the emergency

10  purchase of insurance, the period of coverage of such

11  insurance shall not exceed a period of 30 days, and all such

12  emergency purchases shall be reported to the department.

13         Section 332.  Subsections (2) and (5) of section

14  287.058, Florida Statutes, are amended to read:

15         287.058  Contract document.--

16         (2)  The written agreement shall be signed by the

17  agency head and the contractor prior to the rendering of any

18  contractual service the value of which is in excess of the

19  threshold amount provided in s. 287.017 for CATEGORY TWO,

20  except in the case of a valid emergency as certified by the

21  agency head. The certification of an emergency shall be

22  prepared within 30 days after the contractor begins rendering

23  the service and shall state the particular facts and

24  circumstances which precluded the execution of the written

25  agreement prior to the rendering of the service.  If the

26  agency fails to have the contract signed by the agency head

27  and the contractor prior to rendering the contractual service,

28  and if an emergency does not exist, the agency head shall, no

29  later than 30 days after the contractor begins rendering the

30  service, certify the specific conditions and circumstances to

31  the department as well as describe actions taken to prevent

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 1  recurrence of such noncompliance. The agency head may delegate

 2  the certification only to other senior management agency

 3  personnel.  A copy of the certification shall be furnished to

 4  the Chief Financial Officer Comptroller with the voucher

 5  authorizing payment. The department shall report repeated

 6  instances of noncompliance by an agency to the Auditor

 7  General. Nothing in this subsection shall be deemed to

 8  authorize additional compensation prohibited by s. 215.425.

 9  The procurement of contractual services shall not be divided

10  so as to avoid the provisions of this section.

11         (5)  Unless otherwise provided in the General

12  Appropriations Act or the substantive bill implementing the

13  General Appropriations Act, the Chief Financial Officer

14  Comptroller may waive the requirements of this section for

15  services which are included in s. 287.057(5)(f).

16         Section 333.  Subsections (1) and (2) of section

17  287.063, Florida Statutes, are amended to read:

18         287.063  Deferred-payment commodity contracts; preaudit

19  review.--

20         (1)(a)  When any commodity contract requires deferred

21  payments and the payment of interest, such contract shall be

22  submitted to the Chief Financial Officer Comptroller for the

23  purpose of preaudit review and approval prior to acceptance by

24  the state.

25         (b)  Contracts executed pursuant to this subsection may

26  bear interest at a rate not to exceed an average net interest

27  cost rate which shall be computed by adding 150 basis points

28  to the 20 "bond buyer" average yield index published

29  immediately preceding the first day of the calendar month in

30  which the contract is submitted to the Chief Financial Officer

31  Comptroller for preaudit review and approval.

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 1         (2)(a)  No funds appropriated shall be used to acquire

 2  equipment through a lease or deferred-payment purchase

 3  arrangement unless approved by the Chief Financial Officer

 4  Comptroller as economically prudent and cost-effective.

 5         (b)  The Chief Financial Officer Comptroller shall

 6  establish, by rule, criteria for approving purchases made

 7  under deferred-payment contracts which require the payment of

 8  interest. Criteria shall include, but not be limited to, the

 9  following provisions:

10         1.  No contract shall be approved in which interest

11  exceeds the statutory ceiling contained in this section.

12  However, the interest component of any master equipment

13  financing agreement entered into for the purpose of

14  consolidated financing of a deferred-payment, installment

15  sale, or lease-purchase shall be deemed to comply with the

16  interest rate limitation of this section so long as the

17  interest component of every interagency agreement under such

18  master equipment financing agreement complies with the

19  interest rate limitation of this section.

20         2.  No deferred-payment purchase for less than $30,000

21  shall be approved, unless it can be satisfactorily

22  demonstrated and documented to the Chief Financial Officer

23  Comptroller that failure to make such deferred-payment

24  purchase would adversely affect an agency in the performance

25  of its duties.  However, the Chief Financial Officer

26  Comptroller may approve any deferred-payment purchase if the

27  Chief Financial Officer Comptroller determines that such

28  purchase is economically beneficial to the state.

29         3.  No agency shall obligate an annualized amount of

30  payments for deferred-payment purchases in excess of current

31  operating capital outlay appropriations, unless specifically

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 1  authorized by law or unless it can be satisfactorily

 2  demonstrated and documented to the Chief Financial Officer

 3  Comptroller that failure to make such deferred-payment

 4  purchase would adversely affect an agency in the performance

 5  of its duties.

 6         4.  No contract shall be approved which extends payment

 7  beyond 5 years, unless it can be satisfactorily demonstrated

 8  and documented to the Chief Financial Officer Comptroller that

 9  failure to make such deferred-payment purchase would adversely

10  affect an agency in the performance of its duties.

11         (c)  The Chief Financial Officer Comptroller shall

12  require written justification based on need, usage, size of

13  the purchase, and financial benefit to the state for

14  deferred-payment purchases made pursuant to this subsection.

15         Section 334.  Section 287.064, Florida Statutes, is

16  amended to read:

17         287.064  Consolidated financing of deferred-payment

18  purchases.--

19         (1)  The Division of Bond Finance of the State Board of

20  Administration and the Chief Financial Officer Comptroller

21  shall plan and coordinate deferred-payment purchases made by

22  or on behalf of the state or its agencies or by or on behalf

23  of state community colleges participating under this section

24  pursuant to s. 1001.64(26). The Division of Bond Finance shall

25  negotiate and the Chief Financial Officer Comptroller shall

26  execute agreements and contracts to establish master equipment

27  financing agreements for consolidated financing of

28  deferred-payment, installment sale, or lease purchases with a

29  financial institution or a consortium of financial

30  institutions. As used in this act, the term "deferred-payment"

31  includes installment sale and lease-purchase.

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 1         (a)  The period during which equipment may be acquired

 2  under any one master equipment financing agreement shall be

 3  limited to not more than 3 years.

 4         (b)  Repayment of the whole or a part of the funds

 5  drawn pursuant to the master equipment financing agreement may

 6  continue beyond the period established pursuant to paragraph

 7  (a).

 8         (c)  The interest rate component of any master

 9  equipment financing agreement shall be deemed to comply with

10  the interest rate limitation imposed in s. 287.063 so long as

11  the interest rate component of every interagency or community

12  college agreement entered into under such master equipment

13  financing agreement complies with the interest rate limitation

14  imposed in s. 287.063. Such interest rate limitation does not

15  apply when the payment obligation under the master equipment

16  financing agreement is rated by a nationally recognized rating

17  service in any one of the three highest classifications, which

18  rating services and classifications are determined pursuant to

19  rules adopted by the Chief Financial Officer Comptroller.

20         (2)  Unless specifically exempted by the Chief

21  Financial Officer Comptroller, all deferred-payment purchases,

22  including those made by a community college that is

23  participating under this section, shall be acquired by funding

24  through master equipment financing agreements. The Chief

25  Financial Officer Comptroller is authorized to exempt any

26  purchases from consolidated financing when, in his or her

27  judgment, alternative financing would be cost-effective or

28  otherwise beneficial to the state.

29         (3)  The Chief Financial Officer Comptroller may

30  require agencies to enter into interagency agreements and may

31  require participating community colleges to enter into

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 1  systemwide agreements for the purpose of carrying out the

 2  provisions of this act.

 3         (a)  The term of any interagency or systemwide

 4  agreement shall expire on June 30 of each fiscal year but

 5  shall automatically be renewed annually subject to

 6  appropriations and deferred-payment schedules.  The period of

 7  any interagency or systemwide agreement shall not exceed the

 8  useful life of the equipment for which the agreement was made

 9  as determined by the Chief Financial Officer Comptroller.

10         (b)  The interagency or systemwide agreements may

11  include, but are not limited to, equipment costs, terms, and a

12  pro rata share of program and issuance expenses.

13         (4)  Each community college may choose to have its

14  purchasing agreements involving administrative and

15  instructional materials consolidated under this section.

16         (5)  The Chief Financial Officer Comptroller is

17  authorized to automatically debit each agency's funds and each

18  community college's portion of the Community College Program

19  Fund consistently with the deferred-payment schedules.

20         (6)  There is created the Consolidated Payment Trust

21  Fund in the Chief Financial Officer's Comptroller's office for

22  the purpose of implementing the provisions of this act.  All

23  funds debited from each agency and each community college may

24  be deposited in the trust fund and shall be used to meet the

25  financial obligations incurred pursuant to this act.  Any

26  income from the investment of funds may be used to fund

27  administrative costs associated with this program.

28         (7)  The Chief Financial Officer Comptroller may borrow

29  sufficient amounts from trust funds to pay issuance expenses

30  for the purposes of administering this section. Such amounts

31  shall be subject to approval of the Executive Office of the

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 1  Governor and subject to the notice, review, and objection

 2  procedures of s. 216.177.  The amounts approved pursuant to

 3  this subsection are hereby appropriated for transfer to the

 4  Consolidated Payment Trust Fund and appropriated from the

 5  Consolidated Payment Trust Fund to pay issuance expenses.

 6  Amounts loaned shall be repaid as soon as practicable not to

 7  exceed the length of time obligations are issued to establish

 8  the master equipment financing agreement.

 9         (8)  The State Board of Administration and the Chief

10  Financial Officer Comptroller, individually, shall adopt rules

11  to implement their respective responsibilities under this

12  section.

13         (9)  For purposes of this section, deferred-payment

14  commodity contracts for replacing the state accounting and

15  cash management systems may include equipment, accounting

16  software, and implementation and project management services.

17         Section 335.  Paragraph (d) of subsection (4) of

18  section 287.09451, Florida Statutes, is amended to read:

19         287.09451  Office of Supplier Diversity; powers,

20  duties, and functions.--

21         (4)  The Office of Supplier Diversity shall have the

22  following powers, duties, and functions:

23         (d)  To monitor the degree to which agencies procure

24  services, commodities, and construction from minority business

25  enterprises in conjunction with the Department of Financial

26  Services Banking and Finance as specified in s. 17.11.

27         Section 336.  Section 287.115, Florida Statutes, is

28  amended to read:

29         287.115  Chief Financial Officer Comptroller; annual

30  report.--The Chief Financial Officer Comptroller shall submit

31  to the office of the Auditor General an annual report on those

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 1  contractual service contracts disallowed by the Chief

 2  Financial Officer Comptroller, which report shall include, but

 3  is not limited to, the name of the user agency, the name of

 4  the firm or individual from which the contractual service was

 5  to be acquired, a description of the contractual service, the

 6  financial terms of the contract, and the reason for rejection.

 7         Section 337.  Section 287.131, Florida Statutes, is

 8  amended to read:

 9         287.131  Assistance of Department of Financial Services

10  Insurance.--The Department of Financial Services Insurance

11  shall provide the Department of Management Services with

12  technical assistance in all matters pertaining to the purchase

13  of insurance for all agencies, and shall make surveys of the

14  insurance needs of the state and all departments thereof,

15  including the benefits, if any, of self-insurance.

16         Section 338.  Section 287.175, Florida Statutes, is

17  amended to read:

18         287.175  Penalties.--A violation of this part or a rule

19  adopted hereunder, pursuant to applicable constitutional and

20  statutory procedures, constitutes misuse of public position as

21  defined in s. 112.313(6), and is punishable as provided in s.

22  112.317.  The Chief Financial Officer Comptroller shall report

23  incidents of suspected misuse to the Commission on Ethics, and

24  the commission shall investigate possible violations of this

25  part or rules adopted hereunder when reported by the Chief

26  Financial Officer Comptroller, notwithstanding the provisions

27  of s. 112.324.  Any violation of this part or a rule adopted

28  hereunder shall be presumed to have been committed with

29  wrongful intent, but such presumption is rebuttable.  Nothing

30  in this section is intended to deny rights provided to career

31  service employees by s. 110.227.

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 1         Section 339.  Paragraph (f) of subsection (5) of

 2  section 288.1045, Florida Statutes, is amended to read:

 3         288.1045  Qualified defense contractor tax refund

 4  program.--

 5         (5)  ANNUAL CLAIM FOR REFUND FROM A QUALIFIED DEFENSE

 6  CONTRACTOR.--

 7         (f)  Upon approval of the tax refund pursuant to

 8  paragraphs (c) and (d), the Chief Financial Officer

 9  Comptroller shall issue a warrant for the amount included in

10  the written order. In the event of any appeal of the written

11  order, the Comptroller may not issue a warrant for a refund to

12  the qualified applicant until the conclusion of all appeals of

13  the written order.

14         Section 340.  Paragraph (h) of subsection (5) of

15  section 288.106, Florida Statutes, is amended to read:

16         288.106  Tax refund program for qualified target

17  industry businesses.--

18         (5)  ANNUAL CLAIM FOR REFUND.--

19         (h)  Upon approval of the tax refund under paragraphs

20  (c), (d), and (e), the Chief Financial Officer Comptroller

21  shall issue a warrant for the amount specified in the written

22  order. If the written order is appealed, the Chief Financial

23  Officer Comptroller may not issue a warrant for a refund to

24  the qualified target industry business until the conclusion of

25  all appeals of that order.

26         Section 341.  Subsection (5) of section 288.109,

27  Florida Statutes, is amended to read:

28         288.109  One-Stop Permitting System.--

29         (5)  By January 1, 2001, the following state agencies,

30  and the programs within such agencies which require the

31  

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 1  issuance of licenses, permits, and approvals to businesses,

 2  must also be integrated into the One-Stop Permitting System:

 3         (a)  The Department of Agriculture and Consumer

 4  Services.

 5         (b)  The Department of Business and Professional

 6  Regulation.

 7         (c)  The Department of Health.

 8         (d)  The Department of Financial Services Insurance.

 9         (e)  The Office of Insurance Regulation of the

10  Financial Services Commission.

11         (f)(e)  The Department of Labor.

12         (g)(f)  The Department of Revenue.

13         (h)(g)  The Department of State.

14         (i)(h)  The Fish and Wildlife Conservation Commission.

15         (j)(i)  Other state agencies.

16         Section 342.  Paragraphs (b) and (d) of subsection (1)

17  and subsection (2) of section 288.1253, Florida Statutes, are

18  amended to read:

19         288.1253  Travel and entertainment expenses.--

20         (1)  As used in this section:

21         (b)  "Entertainment expenses" means the actual,

22  necessary, and reasonable costs of providing hospitality for

23  business clients or guests, which costs are defined and

24  prescribed by rules adopted by the Office of Tourism, Trade,

25  and Economic Development, subject to approval by the Chief

26  Financial Officer Comptroller.

27         (d)  "Travel expenses" means the actual, necessary, and

28  reasonable costs of transportation, meals, lodging, and

29  incidental expenses normally incurred by a traveler, which

30  costs are defined and prescribed by rules adopted by the

31  

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 1  Office of Tourism, Trade, and Economic Development, subject to

 2  approval by the Chief Financial Officer Comptroller.

 3         (2)  Notwithstanding the provisions of s. 112.061, the

 4  Office of Tourism, Trade, and Economic Development shall adopt

 5  rules by which it may make expenditures by advancement or

 6  reimbursement, or a combination thereof, to:

 7         (a)  The Governor, the Lieutenant Governor, security

 8  staff of the Governor or Lieutenant Governor, the Commissioner

 9  of Film and Entertainment, or staff of the Office of Film and

10  Entertainment for travel expenses or entertainment expenses

11  incurred by such individuals solely and exclusively in

12  connection with the performance of the statutory duties of the

13  Office of Film and Entertainment.

14         (b)  The Governor, the Lieutenant Governor, security

15  staff of the Governor or Lieutenant Governor, the Commissioner

16  of Film and Entertainment, or staff of the Office of Film and

17  Entertainment for travel expenses or entertainment expenses

18  incurred by such individuals on behalf of guests, business

19  clients, or authorized persons as defined in s. 112.061(2)(e)

20  solely and exclusively in connection with the performance of

21  the statutory duties of the Office of Film and Entertainment.

22         (c)  Third-party vendors for the travel or

23  entertainment expenses of guests, business clients, or

24  authorized persons as defined in s. 112.061(2)(e) incurred

25  solely and exclusively while such persons are participating in

26  activities or events carried out by the Office of Film and

27  Entertainment in connection with that office's statutory

28  duties.

29  

30  The rules shall be subject to approval by the Chief Financial

31  Officer Comptroller prior to promulgation.  The rules shall

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 1  require the submission of paid receipts, or other proof of

 2  expenditure prescribed by the Chief Financial Officer

 3  Comptroller, with any claim for reimbursement and shall

 4  require, as a condition for any advancement of funds, an

 5  agreement to submit paid receipts or other proof of

 6  expenditure and to refund any unused portion of the

 7  advancement within 15 days after the expense is incurred or,

 8  if the advancement is made in connection with travel, within

 9  10 working days after the traveler's return to headquarters.

10  However, with respect to an advancement of funds made solely

11  for travel expenses, the rules may allow paid receipts or

12  other proof of expenditure to be submitted, and any unused

13  portion of the advancement to be refunded, within 10 working

14  days after the traveler's return to headquarters. Operational

15  or promotional advancements, as defined in s. 288.35(4),

16  obtained pursuant to this section shall not be commingled with

17  any other state funds.

18         Section 343.  Subsection (9) of section 288.709,

19  Florida Statutes, is amended to read:

20         288.709  Powers of the Florida Black Business

21  Investment Board, Inc.--The board shall have all the powers

22  necessary or convenient to carry out and effectuate the

23  purposes and provisions of ss. 288.707-288.714, including, but

24  not limited to, the power to:

25         (9)  Invest any funds held in reserves or sinking

26  funds, or any funds not required for immediate disbursement,

27  in such investments as may be authorized for trust funds under

28  s. 215.47; however, such investments will be made on behalf of

29  the board by the Chief Financial Officer Office of State

30  Treasurer or by another trustee appointed for that purpose.

31  

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 1         Section 344.  Paragraph (b) of subsection (4) of

 2  section 288.712, Florida Statutes, is amended to read:

 3         288.712  Florida guarantor funds.--

 4         (4)

 5         (b)  If the board of the corporation chooses to

 6  establish a loan guaranty program, it shall use the Black

 7  Business Loan Guaranty Trust Fund in the State Treasury,

 8  consisting of moneys deposited or credited to the Black

 9  Business Loan Guaranty Trust Fund pursuant to appropriation

10  made by law; any grants, gifts, and contributions received

11  pursuant to ss. 288.707-288.714; all moneys recovered

12  following defaults; and any other moneys obtained by the

13  corporation for this purpose.  The Black Business Loan

14  Guaranty Trust Fund shall be administered by the corporation

15  in trust for the purposes of this section and shall at no time

16  be part of general public funds under the following

17  procedures:

18         1.  The corporation shall utilize the Black Business

19  Loan Guaranty Program Administrative and Loss Reserve Fund in

20  the State Treasury, consisting of all premiums charged and

21  collected in accordance with this section and any income

22  earned from the moneys in the account.  All expenses of the

23  corporation in carrying out the purposes of this subsection

24  shall be paid from the Black Business Loan Guaranty Program

25  Administrative and Loss Reserve Fund.  Any moneys to the

26  credit of the Black Business Loan Guaranty Program

27  Administrative and Loss Reserve Fund in excess of the amount

28  necessary to fund the corporation's activity shall be held as

29  a loss reserve to pay claims arising from defaults on loans

30  underwritten in accordance with this section.

31  

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 1         2.  Any claims against the state arising from defaults

 2  shall be payable initially from the Black Business Loan

 3  Guaranty Program Administrative and Loss Reserve Fund and,

 4  secondarily, from the Black Business Loan Guaranty Trust Fund.

 5         3.  The corporation as loan guarantor may exercise all

 6  rights and powers of a company authorized by the Office of

 7  Insurance Regulation of the Financial Services Commission

 8  Department of Insurance to guarantee loans but shall not be

 9  subject to any requirements of an insurance company under the

10  Florida Insurance Code, nor to any rules of the Financial

11  Services Commission Department of Insurance; however, the

12  corporation shall refer to the insurance code and rules

13  thereunder when designing and administering such program. The

14  corporation shall follow sound actuarial principles when

15  administering this program. The corporation shall establish a

16  premium for the loan guaranty and such rules as may be

17  necessary to carry out the purposes of this section.

18         4.  The corporation may guarantee no more than 20

19  percent of the principal of a loan to a black business

20  enterprise.

21         Section 345.  Paragraph (a) of subsection (1) of

22  section 288.776, Florida Statutes, is amended to read:

23         288.776  Board of directors; powers and duties.--

24         (1)(a)  The corporation shall have a board of directors

25  consisting of 15 members representing all geographic areas of

26  the state. Minority and gender representation must be

27  considered when making appointments to the board. The board

28  membership must include:

29         1.  A representative of the following businesses, all

30  of which must be registered to do business in this state: a

31  foreign bank, a state bank, a federal bank, an insurance

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 1  company involved in covering trade financing risks, and a

 2  small or medium-sized exporter.

 3         2.  The following persons or their designee: the

 4  President of Enterprise Florida, Inc., the Chief Financial

 5  Officer Comptroller, the Secretary of State, a senior official

 6  of the United States Department of Commerce, and the chair of

 7  the Florida Black Business Investment Board.

 8         Section 346.  Section 288.778, Florida Statutes, is

 9  amended to read:

10         288.778  Office of Financial Institutions and

11  Securities Regulation Department of Banking and Finance.--The

12  Office of Financial Institutions and Securities Regulation

13  Department of Banking and Finance shall review the

14  corporation's activities once every 24 months to determine

15  compliance with this part and other related laws and rules and

16  to evaluate the corporation's operations.  The office

17  department shall prepare a report based on its review and

18  evaluation with recommendation for any corrective action.  The

19  president shall submit to the office department regular

20  reports on the corporation's activities.  The content and

21  frequency of such reports shall be determined by the office

22  department.  The office department shall charge a fee for

23  conducting the review and evaluation and preparing the related

24  report, which fee shall not be in excess of the examination

25  fee paid by financial institutions chartered or licensed under

26  the financial institutions code of this state.

27         Section 347.  Paragraphs (c) and (e) through (p) of

28  subsection (3), paragraphs (a), (b), (c), (d), (g), and (h) of

29  subsection (4), paragraph (b) of subsection (5), subsection

30  (7), paragraphs (a) and (c) of subsection (8), paragraph (b)

31  of subsection (9), paragraphs (a) through (e), (h), and (j) of

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 1  subsection (10), subsections (12), (13), and (14), paragraphs

 2  (a), (c), (d), (e), and (g) of subsection (15), and subsection

 3  (17) of section 288.99, Florida Statutes, are amended to read:

 4         288.99  Certified Capital Company Act.--

 5         (3)  DEFINITIONS.--As used in this section, the term:

 6         (c)  "Certified capital company" means a corporation,

 7  partnership, or limited liability company which:

 8         1.  Is certified by the office department in accordance

 9  with this act.

10         2.  Receives investments of certified capital from two

11  or more unaffiliated certified investors.

12         3.  Makes qualified investments as its primary

13  activity.

14         (e)  "Commission" means the Financial Services

15  Commission "Department" means the Department of Banking and

16  Finance.

17         (f)  "Director" means the director of the Office of

18  Tourism, Trade, and Economic Development.

19         (f)(g)  "Early stage technology business" means a

20  qualified business that is:

21         1.  Involved, at the time of the certified capital

22  company's initial investment in such business, in activities

23  related to developing initial product or service offerings,

24  such as prototype development or the establishment of initial

25  production or service processes;

26         2.  Less than 2 years old and has, together with its

27  affiliates, less than $3 million in annual revenues for the

28  fiscal year immediately preceding the initial investment by

29  the certified capital company on a consolidated basis, as

30  determined in accordance with generally accepted accounting

31  principles;

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 1         3.  The Florida Black Business Investment Board;

 2         4.  Any entity that is majority owned by the Florida

 3  Black Business Investment Board; or

 4         5.  Any entity in which the Florida Black Business

 5  Investment Board holds a majority voting interest on the board

 6  of directors.

 7         (g)(h)  "Office" means the Office of Financial

 8  Institutions and Securities Regulation of the commission

 9  Tourism, Trade, and Economic Development.

10         (h)(i)  "Premium tax liability" means any liability

11  incurred by an insurance company under the provisions of ss.

12  624.509 and 624.5091.

13         (i)(j)  "Principal" means an executive officer of a

14  corporation, partner of a partnership, manager of a limited

15  liability company, or any other person with equivalent

16  executive functions.

17         (j)(k)  "Qualified business" means the Digital Divide

18  Trust Fund established under the State of Florida Technology

19  Office or a business that meets the following conditions as

20  evidenced by documentation required by commission department

21  rule:

22         1.  The business is headquartered in this state and its

23  principal business operations are located in this state or at

24  least 75 percent of the employees are employed in the state.

25         2.  At the time a certified capital company makes an

26  initial investment in a business, the business would qualify

27  for investment under 13 C.F.R. s. 121.301(c), which is

28  involved in manufacturing, processing or assembling products,

29  conducting research and development, or providing services.

30  

31  

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 1         3.  At the time a certified capital company makes an

 2  initial investment in a business, the business certifies in an

 3  affidavit that:

 4         a.  The business is unable to obtain conventional

 5  financing, which means that the business has failed in an

 6  attempt to obtain funding for a loan from a bank or other

 7  commercial lender or that the business cannot reasonably be

 8  expected to qualify for such financing under the standards of

 9  commercial lending;

10         b.  The business plan for the business projects that

11  the business is reasonably expected to achieve in excess of

12  $25 million in sales revenue within 5 years after the initial

13  investment, or the business is located in a designated Front

14  Porch community, enterprise zone, urban high crime area, rural

15  job tax credit county, or nationally recognized historic

16  district;

17         c.  The business will maintain its headquarters in this

18  state for the next 10 years and any new manufacturing facility

19  financed by a qualified investment will remain in this state

20  for the next 10 years, or the business is located in a

21  designated Front Porch community, enterprise zone, urban high

22  crime area, rural job tax credit county, or nationally

23  recognized historic district; and

24         d.  The business has fewer than 200 employees and at

25  least 75 percent of the employees are employed in this state.

26  For purposes of this subsection, the term also includes the

27  Florida Black Business Investment Board, any entity majority

28  owned by the Florida Black Business Investment Board, or any

29  entity in which the Florida Black Business Investment Board

30  holds a majority voting interest on the board of directors.

31         4.  The term does not include:

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 1         a.  Any business predominantly engaged in retail sales,

 2  real estate development, insurance, banking, lending, or oil

 3  and gas exploration.

 4         b.  Any business predominantly engaged in professional

 5  services provided by accountants, lawyers, or physicians.

 6         c.  Any company that has no historical revenues and

 7  either has no specific business plan or purpose or has

 8  indicated that its business plan is solely to engage in a

 9  merger or acquisition with any unidentified company or other

10  entity.

11         d.  Any company that has a strategic plan to grow

12  through the acquisition of firms with substantially similar

13  business which would result in the planned net loss of

14  Florida-based jobs over a 12-month period after the

15  acquisition as determined by the office department.

16         (k)(l)  "Qualified debt instrument" means a debt

17  instrument, or a hybrid of a debt instrument, issued by a

18  certified capital company, at par value or a premium, with an

19  original maturity date of at least 5 years after the date of

20  issuance, a repayment schedule which is no faster than a level

21  principal amortization over a 5-year period, and interest,

22  distribution, or payment features which are not related to the

23  profitability of the certified capital company or the

24  performance of the certified capital company's investment

25  portfolio.

26         (l)(m)  "Qualified distribution" means any distribution

27  or payment by a certified capital company for:

28         1.  Reasonable costs and expenses, including, but not

29  limited to, professional fees, of forming and syndicating the

30  certified capital company, if no such costs or expenses are

31  paid to a certified investor, except as provided in

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 1  subparagraph (4)(f)2., and the total cash, cash equivalents,

 2  and other current assets permitted by sub-subparagraph

 3  (5)(b)3.g. that can be converted into cash within 5 business

 4  days available to the certified capital company at the time of

 5  receipt of certified capital from certified investors, after

 6  deducting the costs and expenses of forming and syndicating

 7  the certified capital company, including any payments made

 8  over time for obligations incurred at the time of receipt of

 9  certified capital but excluding other future qualified

10  distributions and payments made under paragraph (9)(a), are an

11  amount equal to or greater than 50 percent of the total

12  certified capital allocated to the certified capital pursuant

13  to subsection (7);

14         2.  Reasonable costs of managing and operating the

15  certified capital company, not exceeding 5 percent of the

16  certified capital in any single year, including an annual

17  management fee in an amount that does not exceed 2.5 percent

18  of the certified capital of the certified capital company;

19         3.  Reasonable and necessary fees in accordance with

20  industry custom for professional services, including, but not

21  limited to, legal and accounting services, related to the

22  operation of the certified capital company; or

23         4.  Any projected increase in federal or state taxes,

24  including penalties and interest related to state and federal

25  income taxes, of the equity owners of a certified capital

26  company resulting from the earnings or other tax liability of

27  the certified capital company to the extent that the increase

28  is related to the ownership, management, or operation of a

29  certified capital company.

30         (m)(n)1.  "Qualified investment" means the investment

31  of cash by a certified capital company in a qualified business

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 1  for the purchase of any debt, equity, or hybrid security,

 2  including a debt instrument or security that has the

 3  characteristics of debt but which provides for conversion into

 4  equity or equity participation instruments such as options or

 5  warrants.

 6         2.  The term does not include:

 7         a.  Any investment made after the effective date of

 8  this act the contractual terms of which require the repayment

 9  of any portion of the principal in instances, other than

10  default as determined by commission department rule, within 12

11  months following the initial investment by the certified

12  capital company unless such investment has a repayment

13  schedule no faster than a level principal amortization of at

14  least 2 years;

15         b.  Any "follow-on" or "add-on" investment except for

16  the amount by which the new investment is in addition to the

17  amount of the certified capital company's initial investment

18  returned to it other than in the form of interest, dividends,

19  or other types of profit participation or distributions; or

20         c.  Any investment in a qualified business or affiliate

21  of a qualified business that exceeds 15 percent of certified

22  capital.

23         (n)(o)  "Program One" means the $150 million in premium

24  tax credits issued under this section in 1999, the allocation

25  of such credits under this section, and the regulation of

26  certified capital companies and investments made by them

27  hereunder.

28         (o)(p)  "Program Two" means the $150 million in premium

29  tax credits to be issued under subsection (17), the allocation

30  of such credits under this section, and the regulation of

31  

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 1  certified capital companies and investments made by them

 2  hereunder.

 3         (4)  CERTIFICATION; GROUNDS FOR DENIAL OR

 4  DECERTIFICATION.--

 5         (a)  To operate as a certified capital company, a

 6  corporation, partnership, or limited liability company must be

 7  certified by the Department of Banking and Finance or the

 8  office pursuant to this act.

 9         (b)  An applicant for certification as a certified

10  capital company must file a verified application with the

11  Department of Banking and Finance on or before December 1,

12  1998, a date determined in rules adopted pursuant to

13  subsection (17) in the case of applicants for Program Two, in

14  a form which the commission department may prescribe by rule.

15  The applicant shall submit a nonrefundable application fee of

16  $7,500 to the office department. The applicant shall provide:

17         1.  The name of the applicant and the address of its

18  principal office and each office in this state.

19         2.  The applicant's form and place of organization and

20  the relevant organizational documents, bylaws, and amendments

21  or restatements of such documents, bylaws, or amendments.

22         3.  Evidence from the Department of State that the

23  applicant is registered with the Department of State as

24  required by law, maintains an active status with the

25  Department of State, and has not been dissolved or had its

26  registration revoked, canceled, or withdrawn.

27         4.  The applicant's proposed method of doing business.

28         5.  The applicant's financial condition and history,

29  including an audit report on the financial statements prepared

30  in accordance with generally accepted accounting principles.

31  The applicant must have, at the time of application for

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 1  certification, an equity capitalization of at least $500,000

 2  in the form of cash or cash equivalents. The applicant must

 3  maintain this equity capitalization until the applicant

 4  receives an allocation of certified capital pursuant to this

 5  act. If the date of the application is more than 90 days after

 6  preparation of the applicant's fiscal year-end financial

 7  statements, the applicant may file financial statements

 8  reviewed by an independent certified public accountant for the

 9  period subsequent to the audit report, together with the

10  audited financial statement for the most recent fiscal year.

11  If the applicant has been in business less than 12 months, and

12  has not prepared an audited financial statement, the applicant

13  may file a financial statement reviewed by an independent

14  certified public accountant.

15         6.  Copies of any offering materials used or proposed

16  to be used by the applicant in soliciting investments of

17  certified capital from certified investors.

18         (c)  Within 60 days after receipt of a verified

19  application, the office department shall grant or deny

20  certification as a certified capital company. If the office

21  department denies certification within the time period

22  specified, the office department shall inform the applicant of

23  the grounds for the denial. If the office department has not

24  granted or denied certification within the time specified, the

25  application shall be deemed approved. The office department

26  shall approve the application if the office department finds

27  that:

28         1.  The applicant satisfies the requirements of

29  paragraph (b).

30         2.  No evidence exists that the applicant has committed

31  any act specified in paragraph (d).

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 1         3.  At least two of the principals have a minimum of 5

 2  years of experience making venture capital investments out of

 3  private equity funds, with not less than $20 million being

 4  provided by third-party investors for investment in the early

 5  stage of operating businesses. At least one full-time manager

 6  or principal of the certified capital company who has such

 7  experience must be primarily located in an office of the

 8  certified capital company which is based in this state.

 9         4.  The applicant's proposed method of doing business

10  and raising certified capital as described in its offering

11  materials and other materials submitted to the office

12  department conforms with the requirements of this section.

13         (d)  The office department may deny certification or

14  decertify a certified capital company if the grounds for

15  decertification are not removed or corrected within 90 days

16  after the notice of such grounds is received by the certified

17  capital company. The office department may deny certification

18  or decertify a certified capital company if the certified

19  capital company fails to maintain common stock or paid-in

20  capital of at least $500,000, or if the office department

21  determines that the applicant, or any principal or director of

22  the certified capital company, has:

23         1.  Violated any provision of this section;

24         2.  Made a material misrepresentation or false

25  statement or concealed any essential or material fact from any

26  person during the application process or with respect to

27  information and reports required of certified capital

28  companies under this section;

29         3.  Been convicted of, or entered a plea of guilty or

30  nolo contendere to, a crime against the laws of this state or

31  any other state or of the United States or any other country

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 1  or government, including a fraudulent act in connection with

 2  the operation of a certified capital company, or in connection

 3  with the performance of fiduciary duties in another capacity;

 4         4.  Been adjudicated liable in a civil action on

 5  grounds of fraud, embezzlement, misrepresentation, or deceit;

 6  or

 7         5.a.  Been the subject of any decision, finding,

 8  injunction, suspension, prohibition, revocation, denial,

 9  judgment, or administrative order by any court of competent

10  jurisdiction, administrative law judge, or any state or

11  federal agency, national securities, commodities, or option

12  exchange, or national securities, commodities, or option

13  association, involving a material violation of any federal or

14  state securities or commodities law or any rule or regulation

15  adopted under such law, or any rule or regulation of any

16  national securities, commodities, or options exchange, or

17  national securities, commodities, or options association; or

18         b.  Been the subject of any injunction or adverse

19  administrative order by a state or federal agency regulating

20  banking, insurance, finance or small loan companies, real

21  estate, mortgage brokers, or other related or similar

22  industries.

23         (g)  On or before December 31 of each year, each

24  certified capital company shall pay to the office department

25  an annual, nonrefundable renewal certification fee of $5,000.

26  If a certified capital company fails to pay its renewal fee by

27  the specified deadline, the company must pay a late fee of

28  $5,000 in addition to the renewal fee on or by January 31 of

29  each year in order to continue its certification in the

30  program. On or before April 30 of each year, each certified

31  capital company shall file audited financial statements with

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 1  the office department.  No renewal fees shall be required

 2  within 6 months after the date of initial certification.

 3         (h)  The commission and office department shall

 4  administer and provide for the enforcement of certification

 5  requirements for certified capital companies as provided in

 6  this act. The commission department may adopt any rules

 7  necessary to carry out its duties, obligations, and powers

 8  related to certification, renewal of certification, or

 9  decertification of certified capital companies and the

10  commission and office may perform any other acts necessary for

11  the proper administration and enforcement of such duties,

12  obligations, and powers.

13         (5)  INVESTMENTS BY CERTIFIED CAPITAL COMPANIES.--

14         (b)  All capital not invested in qualified investments

15  by the certified capital company:

16         1.  Must be held in a financial institution as defined

17  by s. 655.005(1)(h) or held by a broker-dealer registered

18  under s. 517.12, except as set forth in sub-subparagraph 3.g.

19         2.  Must not be invested in a certified investor of the

20  certified capital company or any affiliate of the certified

21  investor of the certified capital company, except for an

22  investment permitted by sub-subparagraph 3.g., provided

23  repayment terms do not permit the obligor to directly or

24  indirectly manage or control the investment decisions of the

25  certified capital company.

26         3.  Must be invested only in:

27         a.  Any United States Treasury obligations;

28         b.  Certificates of deposit or other obligations,

29  maturing within 3 years after acquisition of such certificates

30  or obligations, issued by any financial institution or trust

31  company incorporated under the laws of the United States;

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 1         c.  Marketable obligations, maturing within 10 years or

 2  less after the acquisition of such obligations, which are

 3  rated "A" or better by any nationally recognized credit rating

 4  agency;

 5         d.  Mortgage-backed securities, with an average life of

 6  5 years or less, after the acquisition of such securities,

 7  which are rated "A" or better by any nationally recognized

 8  credit rating agency;

 9         e.  Collateralized mortgage obligations and real estate

10  mortgage investment conduits that are direct obligations of an

11  agency of the United States Government; are not private-label

12  issues; are in book-entry form; and do not include the classes

13  of interest only, principal only, residual, or zero;

14         f.  Interests in money market funds, the portfolio of

15  which is limited to cash and obligations described in

16  sub-subparagraphs a.-d.; or

17         g.  Obligations that are issued by an insurance company

18  that is not a certified investor of the certified capital

19  company making the investment, that has provided a guarantee

20  indemnity bond, insurance policy, or other payment undertaking

21  in favor of the certified capital company's certified

22  investors as permitted by subparagraph (3)(l)1. (3)(m)1. or an

23  affiliate of such insurance company as defined by subparagraph

24  (3)(a)3. that is not a certified investor of the certified

25  capital company making the investment, provided that such

26  obligations are:

27         (I)  Issued or guaranteed as to principal by an entity

28  whose senior debt is rated "AA" or better by Standard & Poor's

29  Ratings Group or such other nationally recognized credit

30  rating agency as the commission department may by rule

31  determine.

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 1         (II)  Not subordinated to other unsecured indebtedness

 2  of the issuer or the guarantor.

 3         (III)  Invested by such issuing entity in accordance

 4  with sub-subparagraphs 3.a.-f.

 5         (IV)  Readily convertible into cash within 5 business

 6  days for the purpose of making a qualified investment unless

 7  such obligations are held to provide a guarantee, indemnity

 8  bond, insurance policy, or other payment undertaking in favor

 9  of the certified capital company's certified investors as

10  permitted by subparagraph (3)(l)1. (3)(m)1.

11         (7)  ANNUAL TAX CREDIT; MAXIMUM AMOUNT; ALLOCATION

12  PROCESS.--

13         (a)  The total amount of tax credits which may be

14  allocated by the Office of Tourism, Trade, and Economic

15  Development shall not exceed $150 million with respect to

16  Program One and $150 million with respect to Program Two. The

17  total amount of tax credits which may be used by certified

18  investors under this act shall not exceed $15 million annually

19  with respect to credits earned under Program One and $15

20  million annually with respect to credits earned under Program

21  Two.

22         (b)  The Office of Tourism, Trade, and Economic

23  Development shall be responsible for allocating premium tax

24  credits as provided for in this act to certified capital

25  companies.

26         (c)  Each certified capital company must apply to the

27  Office of Tourism, Trade, and Economic Development for an

28  allocation of premium tax credits for potential certified

29  investors on a form developed by the Office of Tourism, Trade,

30  and Economic Development with the cooperation of the

31  Department of Revenue. The form shall be accompanied by an

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 1  affidavit from each potential certified investor confirming

 2  that the potential certified investor has agreed to make an

 3  investment of certified capital in a certified capital company

 4  up to a specified amount, subject only to the receipt of a

 5  premium tax credit allocation pursuant to this subsection. No

 6  certified capital company shall submit premium tax allocation

 7  claims on behalf of certified investors that in the aggregate

 8  would exceed the total dollar amount appropriated by the

 9  Legislature for the specific program. No allocation shall be

10  made to the potential investors of a certified capital company

11  under Program Two unless such certified capital company has

12  filed premium tax allocation claims of not less than $15

13  million in the aggregate.

14         (d)  The Office of Tourism, Trade, and Economic

15  Development shall inform each certified capital company of its

16  share of total premium tax credits available for allocation to

17  each of its potential investors.

18         (e)  If a certified capital company does not receive

19  certified capital equaling the amount of premium tax credits

20  allocated to a potential certified investor for which the

21  investor filed a premium tax allocation claim within 10

22  business days after the investor received a notice of

23  allocation, the certified capital company shall notify the

24  Office of Tourism, Trade, and Economic Development by

25  overnight common carrier delivery service of the company's

26  failure to receive the capital. That portion of the premium

27  tax credits allocated to the certified capital company shall

28  be forfeited. If the Office of Tourism, Trade, and Economic

29  Development must make a pro rata allocation under paragraph

30  (f), that the office shall reallocate such available credits

31  

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 1  among the other certified capital companies on the same pro

 2  rata basis as the initial allocation.

 3         (f)  If the total amount of capital committed by all

 4  certified investors to certified capital companies in premium

 5  tax allocation claims under Program Two exceeds the aggregate

 6  cap on the amount of credits that may be awarded under Program

 7  Two, the premium tax credits that may be allowed to any one

 8  certified investor under Program Two shall be allocated using

 9  the following ratio:

10  

11                      A/B = X/>$150,000,000

12  

13  where the letter "A" represents the total amount of certified

14  capital certified investors have agreed to invest in any one

15  certified capital company under Program Two, the letter "B"

16  represents the aggregate amount of certified capital that all

17  certified investors have agreed to invest in all certified

18  capital companies under Program Two, the letter "X" is the

19  numerator and represents the total amount of premium tax

20  credits and certified capital that may be allocated to a

21  certified capital company on a date determined by rule adopted

22  by the commission department pursuant to subsection (17), and

23  $150 million is the denominator and represents the total

24  amount of premium tax credits and certified capital that may

25  be allocated to all certified investors under Program Two. Any

26  such premium tax credits are not first available for

27  utilization until annual filings are made in 2001 for calendar

28  year 2000 in the case of Program One, and the tax credits may

29  be used at a rate not to exceed 10 percent annually per

30  program.

31  

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 1         (g)  The maximum amount of certified capital for which

 2  premium tax allocation claims may be filed on behalf of any

 3  certified investor and its affiliates by one or more certified

 4  capital companies may not exceed $15 million for Program One

 5  and $22.5 million for Program Two.

 6         (h)  To the extent that less than $150 million in

 7  certified capital is raised in connection with the procedure

 8  set forth in paragraphs (c)-(g), the commission department may

 9  adopt rules to allow a subsequent allocation of the remaining

10  premium tax credits authorized under this section.

11         (i)  The Office of Tourism, Trade, and Economic

12  Development shall issue a certification letter for each

13  certified investor, showing the amount invested in the

14  certified capital company under each program.  The applicable

15  certified capital company shall attest to the validity of the

16  certification letter.

17         (8)  ANNUAL TAX CREDIT; CLAIM PROCESS.--

18         (a)  On an annual basis, on or before January 31, each

19  certified capital company shall file with the office

20  department and the Office of Tourism, Trade, and Economic

21  Development, in consultation with the office department, on a

22  form prescribed by the Office of Tourism, Trade, and Economic

23  Development, for each calendar year:

24         1.  The total dollar amount the certified capital

25  company received from certified investors, the identity of the

26  certified investors, and the amount received from each

27  certified investor during the immediately preceding calendar

28  year.

29         2.  The total dollar amount the certified capital

30  company invested and the amount invested in qualified

31  businesses, together with the identity and location of those

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 1  businesses and the amount invested in each qualified business

 2  during the immediately preceding calendar year.

 3         3.  For informational purposes only, the total number

 4  of permanent, full-time jobs either created or retained by the

 5  qualified business during the immediately preceding calendar

 6  year, the average wage of the jobs created or retained, the

 7  industry sectors in which the qualified businesses operate,

 8  and any additional capital invested in qualified businesses

 9  from sources other than certified capital companies.

10         (c)  The Office of Tourism, Trade, and Economic

11  Development shall review the form, and any supplemental

12  documentation, submitted by each certified capital company for

13  the purpose of verifying:

14         1.  That the businesses in which certified capital has

15  been invested by the certified capital company are in fact

16  qualified businesses, and that the amount of certified capital

17  invested by the certified capital company is as represented in

18  the form.

19         2.  The amount of certified capital invested in the

20  certified capital company by the certified investors.

21         3.  The amount of premium tax credit available to

22  certified investors.

23         (9)  REQUIREMENT FOR 100 PERCENT INVESTMENT; STATE

24  PARTICIPATION.--

25         (b)  Cumulative distributions from a certified capital

26  company from funds related to a particular program to its

27  certified investors and equity holders under such program,

28  other than qualified distributions, in excess of the certified

29  capital company's original certified capital raised under such

30  program and any additional capital contributions to the

31  certified capital company with respect to such program may be

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 1  audited by a nationally recognized certified public accounting

 2  firm acceptable to the office department, at the expense of

 3  the certified capital company, if the office department

 4  directs such audit be conducted. The audit shall determine

 5  whether aggregate cumulative distributions from the funds

 6  related to a particular program made by the certified capital

 7  company to all certified investors and equity holders under

 8  such program, other than qualified distributions, have equaled

 9  the sum of the certified capital company's original certified

10  capital raised under such program and any additional capital

11  contributions to the certified capital company with respect to

12  such program.  If at the time of any such distribution made by

13  the certified capital company, such distribution taken

14  together with all other such distributions from the funds

15  related to such program made by the certified capital company,

16  other than qualified distributions, exceeds in the aggregate

17  the sum of the certified capital company's original certified

18  capital raised under such program and any additional capital

19  contributions to the certified capital company with respect to

20  such program, as determined by the audit, the certified

21  capital company shall pay to the Department of Revenue 10

22  percent of the portion of such distribution in excess of such

23  amount. Payments to the Department of Revenue by a certified

24  capital company pursuant to this paragraph shall not exceed

25  the aggregate amount of tax credits used by all certified

26  investors in such certified capital company for such program.

27         (10)  DECERTIFICATION.--

28         (a)  The office department shall conduct an annual

29  review of each certified capital company to determine if the

30  certified capital company is abiding by the requirements of

31  certification, to advise the certified capital company as to

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 1  the eligibility status of its qualified investments, and to

 2  ensure that no investment has been made in violation of this

 3  act. The cost of the annual review shall be paid by each

 4  certified capital company.

 5         (b)  Nothing contained in this subsection shall be

 6  construed to limit the Chief Financial Officer's or the

 7  office's Comptroller's authority to conduct audits of

 8  certified capital companies as deemed appropriate and

 9  necessary.

10         (c)  Any material violation of this section, or a

11  finding that the certified capital company or any principal or

12  director thereof has committed any act specified in paragraph

13  (4)(d), shall be grounds for decertification of the certified

14  capital company. If the office department determines that a

15  certified capital company is no longer in compliance with the

16  certification requirements of this act, the office department

17  shall, by written notice, inform the officers of such company

18  that the company may be subject to decertification 90 days

19  after the date of mailing of the notice, unless the

20  deficiencies are corrected and such company is again found to

21  be in compliance with all certification requirements.

22         (d)  At the end of the 90-day grace period, if the

23  certified capital company is still not in compliance with the

24  certification requirements, the office department may issue a

25  notice to revoke or suspend the certification or to impose an

26  administrative fine. The office department shall advise each

27  respondent of the right to an administrative hearing under

28  chapter 120 prior to final action by the office department.

29         (e)  If the office department revokes a certification,

30  such revocation shall also deny, suspend, or revoke the

31  

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 1  certifications of all affiliates of the certified capital

 2  company.

 3         (h)  The Office of Tourism, Trade, and Economic

 4  Development shall send written notice to the address of each

 5  certified investor whose premium tax credit has been subject

 6  to recapture or forfeiture, using the address last shown on

 7  the last premium tax filing.

 8         (j)  The certified investor shall file with the

 9  Department of Revenue an amended return or such other report

10  as the commission department may prescribe by rule regulation

11  and pay any required tax, not later than 60 days after such

12  decertification has been agreed to or finally determined,

13  whichever shall first occur.

14         (12)  REPORTING REQUIREMENTS.--The Office of Tourism,

15  Trade, and Economic Development shall report on an annual

16  basis to the Governor, the President of the Senate, and the

17  Speaker of the House of Representatives on or before April 1:

18         (a)  The total dollar amount each certified capital

19  company received from all certified investors and any other

20  investor, the identity of the certified investors, and the

21  total amount of premium tax credit used by each certified

22  investor for the previous calendar year.

23         (b)  The total dollar amount invested by each certified

24  capital company and that portion invested in qualified

25  businesses, the identity and location of those businesses, the

26  amount invested in each qualified business, and the total

27  number of permanent, full-time jobs created or retained by

28  each qualified business.

29         (c)  The return for the state as a result of the

30  certified capital company investments, including the extent to

31  which:

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 1         1.  Certified capital company investments have

 2  contributed to employment growth.

 3         2.  The wage level of businesses in which certified

 4  capital companies have invested exceed the average wage for

 5  the county in which the jobs are located.

 6         3.  The investments of the certified capital companies

 7  in qualified businesses have contributed to expanding or

 8  diversifying the economic base of the state.

 9         (13)  FEES.--All fees and charges of any nature

10  collected by the office department pursuant to this act shall

11  be paid into the State Treasury and credited to the General

12  Revenue Fund.

13         (14)  RULEMAKING AUTHORITY.--

14         (a)  The Department of Revenue may by rule prescribe

15  forms and procedures for the tax credit filings, audits, and

16  forfeiture of premium tax credits described in this section,

17  and for certified capital company payments under paragraph

18  (9)(b).

19         (b)  The commission and the Office of Tourism, Trade,

20  and Economic Development may adopt any rules necessary to

21  carry out their respective its duties, obligations, and powers

22  related to the administration, review, and reporting

23  provisions of this section and may perform any other acts

24  necessary for the proper administration and enforcement of

25  such duties, obligations, and powers.

26         (15)(a)  CONFIDENTIALITY OF INVESTIGATION AND REVIEW

27  INFORMATION.--Except as otherwise provided by this section,

28  any information relating to an investigation or office

29  department review of a certified capital company, including

30  any consumer complaint, is confidential and exempt from the

31  provisions of s. 119.07(1) and s. 24(a), Art. I of the State

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 1  Constitution until the investigation or review is complete or

 2  ceases to be active.  Such information shall remain

 3  confidential and exempt from the provisions of s. 119.07(1)

 4  and s. 24(a), Art. I of the State Constitution after the

 5  investigation or review is complete or ceases to be active if

 6  the information is submitted to any law enforcement or

 7  administrative agency for further investigation, and shall

 8  remain confidential and exempt from the provisions of s.

 9  119.07(1) and s. 24(a), Art. I of the State Constitution until

10  that agency's investigation is complete or ceases to be

11  active. For purposes of this subsection, an investigation or

12  review shall be considered "active" so long as the office

13  department, a law enforcement agency, or an administrative

14  agency is proceeding with reasonable dispatch and has a

15  reasonable good faith belief that the investigation may lead

16  to the filing of an administrative, civil, or criminal

17  proceeding. This section shall not be construed to prohibit

18  disclosure of information which is required by law to be filed

19  with the office department and which, but for the

20  investigation, would otherwise be subject to s. 119.07(1).

21         (c)  Nothing in this section shall be construed to

22  prohibit the office department from providing information to

23  any law enforcement or administrative agency. Any law

24  enforcement or administrative agency receiving confidential

25  information in connection with its official duties shall

26  maintain the confidentiality of the information so long as it

27  would otherwise be confidential.

28         (d)  In the event office department personnel are or

29  have been involved in an investigation or review of such

30  nature as to endanger their lives or physical safety or that

31  of their families, the home addresses, telephone numbers,

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 1  places of employment, and photographs of such personnel,

 2  together with the home addresses, telephone numbers,

 3  photographs, and places of employment of spouses and children

 4  of such personnel and the names and locations of schools and

 5  day care facilities attended by the children of such personnel

 6  are confidential and exempt from s. 119.07(1).

 7         (e)  All information obtained by the office department

 8  from any person which is only made available to the office

 9  department on a confidential or similarly restricted basis

10  shall be confidential and exempt from s. 119.07(1).  This

11  exemption shall not be construed to prohibit disclosure of

12  information which is specifically required by law to be filed

13  with the office department or which is otherwise subject to s.

14  119.07(1).

15         (g)  A privilege against civil liability is granted to

16  a person with regard to information or evidence furnished to

17  the office department, unless such person acts in bad faith or

18  with malice in providing such information or evidence.

19         (17)  Notwithstanding the limitations set forth in

20  paragraph (7)(a), in the first fiscal year in which the total

21  insurance premium tax collections as determined by the Revenue

22  Estimating Conference exceed collections for fiscal year

23  2000-2001 by more than the total amount of tax credits issued

24  pursuant to this section which were used by certified

25  investors in that year, the Office of Tourism, Trade, and

26  Economic Development may allocate to certified investors in

27  accordance with paragraph (7)(a) tax credits for Program Two.

28  The commission department shall establish, by rule, a date and

29  procedures by which certified capital companies must file

30  applications for allocations of such additional premium tax

31  credits, which date shall be no later than 180 days from the

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 1  date of determination by the Revenue Estimating Conference.

 2  With respect to new certified capital invested and premium tax

 3  credits earned pursuant to this subsection, the schedule

 4  specified in subparagraphs (5)(a)1.-4. is satisfied by

 5  investments by December 31 of the 2nd, 3rd, 4th, and 5th

 6  calendar year, respectively, after the date established by the

 7  commission department for applications of additional premium

 8  tax credits. The commission department shall adopt rules by

 9  which an entity not already certified as a certified capital

10  company may apply for certification as a certified capital

11  company for participation in this additional allocation. The

12  insurance premium tax credit authorized by Program Two may not

13  be used by certified investors until the annual return due

14  March 1, 2004, and may be used on all subsequent returns and

15  estimated payments; however, notwithstanding the provisions of

16  s. 624.5092(2)(b), the installments of taxes due and payable

17  on April 15, 2004, and June 15, 2004, shall be based on the

18  net tax due in 2003 not taking into account credits granted

19  pursuant to this section for Program Two.

20         Section 348.  Paragraph (c) of subsection (1) of

21  section 289.051, Florida Statutes, is amended to read:

22         289.051  Membership of financial institutions; loans to

23  corporation, limitations.--

24         (1)  Any financial institution may request membership

25  in the corporation by making application to the board of

26  directors on such form and in such manner as said board of

27  directors may require, and membership shall become effective

28  upon acceptance of such application by said board.  Each

29  member of the corporation shall make loans to the corporation

30  as and when called upon by it to do so, on such terms and

31  

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 1  other conditions as shall be approved from time to time by the

 2  board of directors, subject to the following conditions:

 3         (c)  The total amount outstanding on loans to the

 4  corporation made by any member at any one time, when added to

 5  the amount of the investment in the capital stock of the

 6  corporation then held by such member, shall not exceed:

 7         1.  Twenty percent of the total amount then outstanding

 8  on loans to the corporation by all members, including, in said

 9  total amount outstanding, amounts validly called for loan but

10  not yet loaned.

11         2.  The following limit, to be determined as of the

12  time such member becomes a member on the basis of the audited

13  balance sheet of such member at the close of its fiscal year

14  immediately preceding its application for membership, or, in

15  the case of an insurance company, its last annual statement to

16  the Office of Insurance Regulation of the Financial Services

17  Commission Department of Insurance: 2.5 percent of the capital

18  and surplus of commercial banks and trust companies; 0.5

19  percent of the total outstanding loans made by savings and

20  loan associations and building and loan associations; 2.5

21  percent of the capital and unassigned surplus of stock

22  insurance companies, except fire insurance companies; 2.5

23  percent of the unassigned surplus of mutual insurance

24  companies, except fire insurance companies; 0.1 percent of the

25  assets of fire insurance companies; and such limits as may be

26  approved by the board of directors of the corporation for

27  other financial institutions.

28         Section 349.  Subsection (1) of section 289.081,

29  Florida Statutes, is amended to read:

30         289.081  Amendments to articles of incorporation.--

31  

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 1         (1)  The articles of incorporation may be amended by

 2  the votes of the stockholders and the members of the

 3  corporation, voting separately by classes, and such amendments

 4  shall require approval by the affirmative vote of two-thirds

 5  of the votes to which the stockholders shall be entitled and

 6  two-thirds of the votes to which the members shall be

 7  entitled. No amendment of the articles of incorporation which

 8  is inconsistent with the general purposes expressed herein, or

 9  which authorizes any additional class of capital stock to be

10  issued, or which eliminates or curtails the right of the

11  Office of Financial Institutions and Securities Regulation of

12  the Financial Services Commission Department of Banking and

13  Finance to examine the corporation or the obligation of the

14  corporation to make reports as provided in s. 289.121, shall

15  be made.  No amendment of the articles of incorporation which

16  increases the obligation of a member to make loans to the

17  corporation, or makes any change in the principal amount,

18  interest rate, maturity date, or in the security or credit

19  position of any outstanding loan of a member to the

20  corporation, or affects a member's right to withdraw from

21  membership as provided herein, or affects a member's voting

22  rights as provided herein, shall be made without the consent

23  of each member affected by such amendment.

24         Section 350.  Section 289.121, Florida Statutes, is

25  amended to read:

26         289.121  Periodic examinations; reports.--The

27  corporation shall be examined at least once annually by the

28  Office of Financial Institutions and Securities Regulation of

29  the Financial Services Commission Department of Banking and

30  Finance and shall make reports of its condition not less than

31  annually to that office said department and more frequently

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 1  upon call of the office department, which in turn shall make

 2  copies of such reports available to the Office of Insurance

 3  Regulation of the Financial Services Commission Department of

 4  Insurance and the Governor; and the corporation shall also

 5  furnish such other information as may from time to time be

 6  required by the Office of Financial Institutions and

 7  Securities Regulation Department of Banking and Finance and

 8  Department of State. The corporation shall pay the actual cost

 9  of said examinations. The office Department of Banking and

10  Finance shall exercise the same power and authority over

11  corporations organized under this act as is exercised over

12  financial institutions under the provisions of the financial

13  institutions codes, when such codes are not in conflict with

14  this act.

15         Section 351.  Section 292.085, Florida Statutes, is

16  amended to read:

17         292.085  Department of Veterans' Affairs Tobacco

18  Settlement Trust Fund.--

19         (1)  The Department of Veterans' Affairs Tobacco

20  Settlement Trust Fund is created within that department. Funds

21  to be credited to the trust fund shall consist of funds

22  disbursed, by nonoperating transfer, from the Department of

23  Financial Services Banking and Finance Tobacco Settlement

24  Clearing Trust Fund in amounts equal to the annual

25  appropriations made from this trust fund.

26         (2)  Notwithstanding the provisions of s. 216.301 and

27  pursuant to s. 216.351, any unencumbered balance in the trust

28  fund at the end of any fiscal year and any encumbered balance

29  remaining undisbursed on December 31 of the same calendar year

30  shall revert to the Department of Financial Services Banking

31  and Finance Tobacco Settlement Clearing Trust Fund.

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 1         Section 352.  Section 313.02, Florida Statutes, is

 2  amended to read:

 3         313.02  Bond.--Every harbormaster appointed for any

 4  port shall give an approved bond in the sum of $500, payable

 5  to the Governor of the state, for the faithful performance of

 6  the harbormaster's duty, such bond to be approved by the

 7  county commissioners of the county in which the port is

 8  situated, and by the Department of Financial Services Banking

 9  and Finance, and to be filed with the Department of State.

10         Section 353.  Section 314.02, Florida Statutes, is

11  amended to read:

12         314.02  Bond.--Each harbormaster so appointed shall

13  enter into a bond in the penal sum of $2,000, with two or more

14  sureties, payable to the Governor of the state and the

15  Governor's successors in office, conditioned for the faithful

16  discharge of the duties of the harbormaster's office, by the

17  harbormaster and his or her deputies, and for the payment of

18  any damage any person may sustain in consequence of any

19  wrongful act of such officer or deputy under color of the

20  harbormaster's office; such bond to be approved by the county

21  commissioners of the county in which is situated said port and

22  by the Department of Financial Services Banking and Finance,

23  and to be filed with the Department of State.

24         Section 354.  Paragraph (b) of subsection (5) of

25  section 316.3025, Florida Statutes, is amended to read:

26         316.3025  Penalties.--

27         (5)

28         (b)  All penalties imposed and collected under this

29  section by any state agency having jurisdiction shall be paid

30  to the Chief Financial Officer Treasurer, who shall credit the

31  

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 1  total amount collected to the State Transportation Trust Fund

 2  for use in repairing and maintaining the roads of this state.

 3         Section 355.  Subsection (6) of section 316.545,

 4  Florida Statutes, is amended to read:

 5         316.545  Weight and load unlawful; special fuel and

 6  motor fuel tax enforcement; inspection; penalty; review.--

 7         (6)  Any officer or agent collecting the penalties

 8  herein imposed shall give to the owner or driver of the

 9  vehicle an official receipt for all penalties collected. Such

10  officers or agents of the state departments shall cooperate

11  with the owners or drivers of motor vehicles so as not to

12  delay unduly the vehicles. All penalties imposed and collected

13  under this section by any state agency having jurisdiction

14  shall be paid to the Chief Financial Officer Treasurer, who

15  shall credit the total amount thereof to the State

16  Transportation Trust Fund, which shall be used to repair and

17  maintain the roads of this state and to enforce this section.

18         Section 356.  Paragraph (c) of subsection (5) of

19  section 320.02, Florida Statutes, is amended to read:

20         320.02  Registration required; application for

21  registration; forms.--

22         (5)

23         (c)  For purposes of providing proof of purchase of

24  required insurance coverage under this subsection, the Office

25  of Insurance Regulation of the Financial Services Commission

26  Department of Insurance shall require that uniform

27  proof-of-purchase cards specified by the Department of Highway

28  Safety and Motor Vehicles be furnished by insurers writing

29  motor vehicle liability insurance in this state.  Any person

30  altering or counterfeiting such a card or making a false

31  affidavit in order to furnish false proof or to knowingly

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 1  permit another person to furnish false proof is guilty of a

 2  misdemeanor of the first degree, punishable as provided in s.

 3  775.082 or s. 775.083.

 4         Section 357.  Subsection (5) of section 320.081,

 5  Florida Statutes, is amended to read:

 6         320.081  Collection and distribution of annual license

 7  tax imposed on the following type units.--

 8         (5)  The department shall keep records showing the

 9  total number of stickers issued to each type unit governed by

10  this section, the total amount of license taxes collected, and

11  the county or city wherein each such unit is located and shall

12  from month to month certify to the Chief Financial Officer

13  Comptroller the amount derived from license taxes in each

14  county and each city within the county. Such amount, less the

15  amount of $1.50 collected on each license, shall be paid to

16  the counties and cities within the counties wherein the unit

17  or units are located as follows: one-half to the district

18  school board and the remainder either to the board of county

19  commissioners, for units which are located within the

20  unincorporated areas of the county, or to any city within such

21  county, for units which are located within its corporate

22  limits. Payment shall be by warrant drawn by the Chief

23  Financial Officer Comptroller upon the treasury, which amount

24  is hereby appropriated monthly out of the License Tax

25  Collection Trust Fund.

26         Section 358.  Paragraphs (b) and (c) of subsection (5)

27  of section 320.20, Florida Statutes, are amended to read:

28         320.20  Disposition of license tax moneys.--The revenue

29  derived from the registration of motor vehicles, including any

30  delinquent fees and excluding those revenues collected and

31  

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 1  distributed under the provisions of s. 320.081, must be

 2  distributed monthly, as collected, as follows:

 3         (5)

 4         (b)  The Chief Financial Officer State Comptroller each

 5  month shall deposit in the State Transportation Trust Fund an

 6  amount, drawn from other funds in the State Treasury which are

 7  not immediately needed or are otherwise in excess of the

 8  amount necessary to meet the requirements of the State

 9  Treasury, which when added to such remaining revenues each

10  month will equal one-twelfth of the amount of the anticipated

11  annual revenues to be deposited in the State Transportation

12  Trust Fund under paragraph (a) as estimated by the most recent

13  revenue estimating conference held pursuant to s. 216.136(3).

14  The transfers required hereunder may be suspended by action of

15  the Legislative Budget Commission in the event of a

16  significant shortfall of state revenues.

17         (c)  In any month in which the remaining revenues

18  derived from the registration of motor vehicles exceed

19  one-twelfth of those anticipated annual remaining revenues as

20  determined by the revenue estimating conference, the excess

21  shall be credited to those state funds in the State Treasury

22  from which the amount was originally drawn, up to the amount

23  which was deposited in the State Transportation Trust Fund

24  under paragraph (b).  A final adjustment must be made in the

25  last months of a fiscal year so that the total revenue

26  deposited in the State Transportation Trust Fund each year

27  equals the amount derived from the registration of motor

28  vehicles, less the amount distributed under subsection (1).

29  For the purposes of this paragraph and paragraph (b), the term

30  "remaining revenues" means all revenues deposited into the

31  State Transportation Trust Fund under paragraph (a) and

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 1  subsections (2) and (3). In order that interest earnings

 2  continue to accrue to the General Revenue Fund, the Department

 3  of Transportation may not invest an amount equal to the

 4  cumulative amount of funds deposited in the State

 5  Transportation Trust Fund under paragraph (b) less funds

 6  credited under this paragraph as computed on a monthly basis.

 7  The amounts to be credited under this and the preceding

 8  paragraph must be calculated and certified to the Chief

 9  Financial Officer Comptroller by the Executive Office of the

10  Governor.

11         Section 359.  Subsection (1) of section 320.71, Florida

12  Statutes, is amended to read:

13         320.71  Nonresident motor vehicle, mobile home, or

14  recreational vehicle dealer's license.--

15         (1)  Any person who is a nonresident of the state, who

16  does not have a dealer's contract from the manufacturer or

17  manufacturer's distributor of motor vehicles, mobile homes, or

18  recreational vehicles authorizing the sale thereof in definite

19  Florida territory, and who sells or engages in the business of

20  selling said vehicles at retail within the state shall

21  register with the Department of Revenue for a sales tax dealer

22  registration number and comply with chapter 212, and pay a

23  license tax of $2,000 per annum in each county where such

24  sales are made; $1,250 of said tax shall be transmitted to the

25  Department of Financial Services Banking and Finance to be

26  deposited in the General Revenue Fund of the state, and $750

27  thereof shall be returned to the county.  The license tax

28  shall cover the period from January 1 to the following

29  December 31, and no such license shall be issued for any

30  fractional part of a year.

31  

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 1         Section 360.  Subsection (2) of section 320.781,

 2  Florida Statutes, is amended to read:

 3         320.781  Mobile Home and Recreational Vehicle

 4  Protection Trust Fund.--

 5         (2)  Beginning October 1, 1990, the department shall

 6  charge and collect an additional fee of $1 for each new mobile

 7  home and new recreational vehicle title transaction for which

 8  it charges a fee.  This additional fee shall be deposited into

 9  the trust fund.  The Department of Highway Safety and Motor

10  Vehicles shall charge a fee of $40 per annual dealer and

11  manufacturer license and license renewal, which shall be

12  deposited into the trust fund. The sums deposited in the trust

13  fund shall be used exclusively for carrying out the purposes

14  of this section.  These sums may be invested and reinvested by

15  the Chief Financial Officer Treasurer under the same

16  limitations as apply to investment of other state funds, with

17  all interest from these investments deposited to the credit of

18  the trust fund.

19         Section 361.  Subsection (5) of section 322.21, Florida

20  Statutes, is amended to read:

21         322.21  License fees; procedure for handling and

22  collecting fees.--

23         (5)  The department shall collect and transmit all fees

24  received by it under this section to the Chief Financial

25  Officer Treasurer to be placed in the General Revenue Fund of

26  the state, and sufficient funds for the necessary expenses of

27  the department shall be included in the appropriations act.

28  The fees shall be used for the maintenance and operation of

29  the department.

30         Section 362.  Paragraph (b) of subsection (1) of

31  section 324.032, Florida Statutes, is amended to read:

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 1         324.032  Manner of proving financial responsibility;

 2  for-hire passenger transportation vehicles.--

 3         (1)  Notwithstanding the provisions of s. 324.031, a

 4  person who is either the owner or a lessee required to

 5  maintain insurance under s. 324.021(9)(b) and who operates at

 6  least 300 taxicabs, limousines, jitneys, or any other for-hire

 7  passenger transportation vehicles may prove financial

 8  responsibility by satisfying the following:

 9         (b)  Complying with the provisions of s. 324.171, such

10  compliance to be demonstrated by maintaining at its principal

11  place of business an audited financial statement, prepared in

12  accordance with generally accepted accounting principles, and

13  providing to the department a certification issued by a

14  certified public accountant that the applicant's net worth is

15  at least equal to the requirements of s. 324.171 as determined

16  by the Office of Insurance Regulation of the Financial

17  Services Commission Department of Insurance, including claims

18  liabilities in an amount certified as adequate by a Fellow of

19  the Casualty Actuarial Society.

20  

21  Upon request by the department, the applicant must provide the

22  department at the applicant's principal place of business in

23  this state access to the applicant's underlying financial

24  information and financial statements that provide the basis of

25  the certified public accountant's certification.  The

26  applicant shall reimburse the requesting department for all

27  reasonable costs incurred by it in reviewing the supporting

28  information.  The maximum amount of self-insurance permissible

29  under this subsection is $300,000 and must be stated on a

30  per-occurrence basis, and the applicant shall maintain

31  adequate excess insurance issued by an authorized or eligible

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 1  insurer licensed or approved by the Office of Insurance

 2  Regulation Department of Insurance.  All risks self-insured

 3  shall remain with the owner or lessee providing it, and the

 4  risks are not transferable to any other person, unless a

 5  policy complying with paragraph (a) is obtained.

 6         Section 363.  Paragraph (b) of subsection (1) of

 7  section 324.171, Florida Statutes, is amended to read:

 8         324.171  Self-insurer.--

 9         (1)  Any person may qualify as a self-insurer by

10  obtaining a certificate of self-insurance from the department

11  which may, in its discretion and upon application of such a

12  person, issue said certificate of self-insurance when such

13  person has satisfied the requirements of this section to

14  qualify as a self-insurer under this section:

15         (b)  A person, including any firm, partnership,

16  association, corporation, or other person, other than a

17  natural person, shall:

18         1.  Possess a net unencumbered worth of at least

19  $40,000 for the first motor vehicle and $20,000 for each

20  additional motor vehicle; or

21         2.  Maintain sufficient net worth, as determined

22  annually by the department, pursuant to rules promulgated by

23  the department, with the assistance of the Office of Insurance

24  Regulation of the Financial Services Commission Department of

25  Insurance, to be financially responsible for potential losses.

26  The rules shall take into consideration excess insurance

27  carried by the applicant.  The department's determination

28  shall be based upon reasonable actuarial principles

29  considering the frequency, severity, and loss development of

30  claims incurred by casualty insurers writing coverage on the

31  

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 1  type of motor vehicles for which a certificate of

 2  self-insurance is desired.

 3         Section 364.  Paragraph (d) of subsection (2) of

 4  section 326.006, Florida Statutes, is amended to read:

 5         326.006  Powers and duties of division.--

 6         (2)  The division has the power to enforce and ensure

 7  compliance with the provisions of this chapter and rules

 8  adopted under this chapter relating to the sale and ownership

 9  of yachts and ships.  In performing its duties, the division

10  has the following powers and duties:

11         (d)  Notwithstanding any remedies available to a yacht

12  or ship purchaser, if the division has reasonable cause to

13  believe that a violation of any provision of this chapter or

14  rule adopted under this chapter has occurred, the division may

15  institute enforcement proceedings in its own name against any

16  broker or salesperson or any of his or her assignees or

17  agents, or against any unlicensed person or any of his or her

18  assignees or agents, as follows:

19         1.  The division may permit a person whose conduct or

20  actions are under investigation to waive formal proceedings

21  and enter into a consent proceeding whereby orders, rules, or

22  letters of censure or warning, whether formal or informal, may

23  be entered against the person.

24         2.  The division may issue an order requiring the

25  broker or salesperson or any of his or her assignees or

26  agents, or requiring any unlicensed person or any of his or

27  her assignees or agents, to cease and desist from the unlawful

28  practice and take such affirmative action as in the judgment

29  of the division will carry out the purposes of this chapter.

30  

31  

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 1         3.  The division may bring an action in circuit court

 2  on behalf of a class of yacht or ship purchasers for

 3  declaratory relief, injunctive relief, or restitution.

 4         4.  The division may impose a civil penalty against a

 5  broker or salesperson or any of his or her assignees or

 6  agents, or against an unlicensed person or any of his or her

 7  assignees or agents, for any violation of this chapter or a

 8  rule adopted under this chapter.  A penalty may be imposed for

 9  each day of continuing violation, but in no event may the

10  penalty for any offense exceed $10,000.  All amounts collected

11  must be deposited with the Chief Financial Officer Treasurer

12  to the credit of the Division of Florida Land Sales,

13  Condominiums, and Mobile Homes Trust Fund.  If a broker,

14  salesperson, or unlicensed person working for a broker, fails

15  to pay the civil penalty, the division shall thereupon issue

16  an order suspending the broker's license until such time as

17  the civil penalty is paid or may pursue enforcement of the

18  penalty in a court of competent jurisdiction. The order

19  imposing the civil penalty or the order of suspension may not

20  become effective until 20 days after the date of such order.

21  Any action commenced by the division must be brought in the

22  county in which the division has its executive offices or in

23  the county where the violation occurred.

24         Section 365.  Subsections (8) and (25) of section

25  331.303, Florida Statutes, are amended to read:

26         331.303  Definitions.--

27         (8)  "Entertainment expenses" means the actual,

28  necessary, and reasonable costs of providing hospitality for

29  business clients or guests, which costs are defined and

30  prescribed by rules adopted by the authority, subject to

31  approval by the Chief Financial Officer Comptroller.

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 1         (25)  "Travel expenses" means the actual, necessary,

 2  and reasonable costs of transportation, meals, lodging, and

 3  incidental expenses normally incurred by a traveler, which

 4  costs are defined and prescribed by rules adopted by the

 5  authority, subject to approval by the Chief Financial Officer

 6  Comptroller.

 7         Section 366.  Subsection (2) of section 331.309,

 8  Florida Statutes, is amended to read:

 9         331.309  Treasurer; depositories; fiscal agent.--

10         (2)  The board is authorized to select as depositories

11  in which the funds of the board and of the authority shall be

12  deposited any qualified public depository as defined in s.

13  280.02, upon such terms and conditions as to the payment of

14  interest by such depository upon the funds so deposited as the

15  board may deem just and reasonable. Funds of the authority may

16  also be deposited with the Florida Commercial Space Financing

17  Corporation created by s. 331.407. The funds of the authority

18  may be kept in or removed from the State Treasury upon written

19  notification from the chair of the board to the Chief

20  Financial Officer State Comptroller.

21         Section 367.  Subsection (2) of section 331.3101,

22  Florida Statutes, is amended to read:

23         331.3101  Florida Space Authority; travel and

24  entertainment expenses.--

25         (2)  The rules shall be subject to approval by the

26  Chief Financial Officer Comptroller prior to promulgation.

27  The rules shall require the submission of paid receipts, or

28  other proof prescribed by the Chief Financial Officer

29  Comptroller, with any claim for reimbursement, and shall

30  require, as a condition for any advancement, an agreement to

31  submit paid receipts or other proof and to refund any unused

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 1  portion of the advancement within 15 days after the expense is

 2  incurred or, if the advancement is made in connection with

 3  travel, within 15 days after completion of the travel.

 4  However, with respect to an advancement made solely for travel

 5  expenses, the rules may allow paid receipts or other proof to

 6  be submitted, and any unused portion of the advancement to be

 7  refunded, within 30 days after completion of the travel.

 8         Section 368.  Section 331.348, Florida Statutes, is

 9  amended to read:

10         331.348  Investment of funds.--The board may in its

11  discretion invest funds of the authority through the Chief

12  Financial Officer Treasurer or in:

13         (1)  Direct obligations of or obligations guaranteed by

14  the United States or for the payment of the principal and

15  interest of which the faith and credit of the United States is

16  pledged;

17         (2)  Bonds or notes issued by any of the following

18  federal agencies:  Bank for Cooperatives; federal intermediate

19  credit banks; federal home loan bank system; federal land

20  banks; or the Federal National Mortgage Association (including

21  debentures or participating certificates issued by such

22  association);

23         (3)  Public housing bonds issued by public housing

24  authorities and secured by a pledge or annual contributions

25  under an annual contribution contract or contracts with the

26  United States;

27         (4)  Bonds or other interest-bearing obligations of any

28  county, district, city, or town located in the state for which

29  the full faith and credit of such political subdivision is

30  pledged;

31  

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 1         (5)  Any investment authorized for insurers by ss.

 2  625.306-625.316 and amendments thereto; or

 3         (6)  Any investment authorized under s. 17.57 s. 18.10

 4  and amendments thereto.

 5         Section 369.  Subsection (3) of section 331.419,

 6  Florida Statutes, is amended to read:

 7         331.419  Reports and audits.--

 8         (3)  The Office of Financial Institutions and

 9  Securities Regulation of the Financial Services Commission

10  Division of Banking of the Department of Banking and Finance

11  shall review the corporation's activities once every 24 months

12  to determine compliance with this part and related laws and

13  rules and to evaluate the corporation's operations. The office

14  division shall prepare a report based on its review and

15  evaluation with recommendation for any corrective action. The

16  president shall submit to the office division regular reports

17  on the corporation's activities. The content and frequency of

18  such reports shall be determined by the office division. The

19  office division may charge a fee for conducting the review and

20  evaluation and preparing the related report, which fee shall

21  not be in excess of the examination fee paid by chartered or

22  licensed financial institutions.

23         Section 370.  Subsection (1) of section 336.022,

24  Florida Statutes, is amended to read:

25         336.022  County transportation trust fund; controls and

26  administrative remedies.--

27         (1)  Each county shall establish and maintain a

28  transportation trust fund for all transportation-related

29  revenues and expenditures.  All funds received by a county for

30  transportation shall be deposited into this fund.  No

31  expenditures other than transportation expenditures authorized

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 1  by law shall be made from such fund.  Each county shall use a

 2  uniform accounts classification system approved by the Chief

 3  Financial Officer Comptroller.

 4         Section 371.  Subsection (9) of section 337.25, Florida

 5  Statutes, is amended to read:

 6         337.25  Acquisition, lease, and disposal of real and

 7  personal property.--

 8         (9)  The department, with the approval of the Chief

 9  Financial Officer State Comptroller, is authorized to disburse

10  state funds for real estate closings in a manner consistent

11  with good business practices and in a manner minimizing costs

12  and risks to the state.

13         Section 372.  Section 339.035, Florida Statutes, is

14  amended to read:

15         339.035  Expenditures.--All expenditures by the

16  department shall be made upon vouchers issued and certified by

17  the department in such manner as the department may, by rule

18  or internal management memorandum as required by chapter 120,

19  provide and shall be paid by warrants issued by the Chief

20  Financial Officer Comptroller upon the Treasurer.

21         Section 373.  Section 339.081, Florida Statutes, is

22  amended to read:

23         339.081  Department trust funds.--The Chief Financial

24  Officer Comptroller shall maintain within the State Treasury

25  the following trust funds for the department:

26         (1)  The State Transportation Trust Fund, to which

27  shall be credited the proceeds of the gas tax as authorized by

28  chapter 83-3, Laws of Florida, and such other funds which

29  accrue to the department which are not required to be

30  maintained in separate trust funds.

31  

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 1         (2)  Such other funds as may be authorized by bond

 2  resolutions or agreements with any other public bodies or

 3  agencies.

 4         Section 374.  Section 344.17, Florida Statutes, is

 5  amended to read:

 6         344.17  Depositories and investments.--All moneys

 7  received by the Chief Financial Officer as treasurer of the

 8  State Board of Administration, a body corporate under s. 9,

 9  Art. XII of the State Constitution, shall be deposited by the

10  treasurer in a solvent bank or banks, to be approved and

11  accepted for such purposes by the board. In making such

12  deposits, he or she shall follow the method for the deposit of

13  state funds.  Each bank receiving any portion of such funds

14  shall be required to deposit with such treasurer satisfactory

15  bonds or treasury certificates of the United States; bonds of

16  the several states; special tax school district bonds; bonds

17  of any municipality eligible to secure state deposits as

18  provided by law; bonds of any county or special road and

19  bridge district of this state entitled to participate under

20  the provisions of s. 16, Art. IX of the State Constitution of

21  1885, as adopted by the 1968 revised constitution, and of s.

22  9, Art. XII of that revision; bonds issued under the

23  provisions of s. 18, Art. XII of the State Constitution of

24  1885, as adopted by s. 9, Art. XII of the 1968 revised

25  constitution; or bonds, notes, or certificates issued by the

26  Florida State Improvement Commission or its successors, the

27  Florida Development Commission and the Division of Bond

28  Finance of the State Board of Administration, which contain a

29  pledge of the 80-percent surplus 2-cent constitutional

30  gasoline tax accruing under s. 16, Art. IX of the State

31  Constitution of 1885, as adopted by the 1968 revised

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 1  constitution, and under s. 9, Art. XII of that revision, which

 2  shall be equal to the amount deposited with such bank. Such

 3  security shall be in the possession of such treasurer; or the

 4  treasurer is authorized to accept, in lieu of the actual

 5  depositing with him or her of such security, trust or

 6  safekeeping receipts issued by any Federal Reserve Bank, or

 7  member bank thereof, or by any bank incorporated under the

 8  laws of the United States; provided the member bank or bank

 9  incorporated under the laws of the United States has been

10  previously approved and accepted for such purposes by the

11  State Board of Administration and the trust or safekeeping

12  receipts are in substantially the same form as that which the

13  Chief Financial Officer State Treasurer is authorized to

14  accept in lieu of securities given to cover deposits of state

15  funds.

16         Section 375.  Subsections (2) and (9) of section

17  350.06, Florida Statutes, are amended to read:

18         350.06  Place of meeting; expenditures; employment of

19  personnel; records availability and fees.--

20         (2)  All sums of money authorized to be paid on account

21  of said commissioners shall be paid out of the State Treasury

22  only on the order of the Chief Financial Officer Comptroller.

23         (9)  The commission shall keep a book in which all fees

24  collected by it as provided for herein shall be recorded,

25  together with the amount and purpose for which collected.

26  This book shall be a public record.  The commission shall

27  prepare a statement of these fees in duplicate each month and

28  remit one copy of the statement, together with all fees

29  collected by it, to the Chief Financial Officer Treasurer.

30  All moneys collected pursuant to this section by the

31  

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 1  commission shall be deposited in the State Treasury to the

 2  credit of the Florida Public Service Regulatory Trust Fund.

 3         Section 376.  Section 354.03, Florida Statutes, is

 4  amended to read:

 5         354.03  Bond.--Before entering into the performance of

 6  his or her duties every such special officer shall enter into

 7  a good and sufficient bond payable to the Governor of Florida,

 8  and the Governor's successors, in the penal sum of $5,000,

 9  with some surety company authorized to do business in this

10  state as surety thereon, conditioned for the faithful

11  performance of his or her duties, and to pay any and all

12  damage done by any illegal act committed by him or her, to be

13  approved by the Department of Financial Services Banking and

14  Finance.

15         Section 377.  Subsection (1) of section 365.173,

16  Florida Statutes, is amended to read:

17         365.173  Wireless Emergency Telephone System Fund.--

18         (1)  All revenues derived from the E911 fee levied on

19  subscribers under s. 365.172 must be paid into the State

20  Treasury on or before the 15th day of each month. Such moneys

21  must be accounted for in a special fund to be designated as

22  the Wireless Emergency Telephone System Fund, a fund created

23  in the State Technology Office and must be invested by the

24  Chief Financial Officer State Treasurer pursuant to s. 17.61

25  s. 18.125. All moneys in such fund are to be expended by the

26  State Technology Office for the purposes provided in this

27  section and s. 365.172. These funds are not subject to s.

28  215.20.

29         Section 378.  Subsection (8) of section 370.06, Florida

30  Statutes, is amended to read:

31         370.06  Licenses.--

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 1         (8)  COLLECTION OF LICENSES, FEES.--Unless otherwise

 2  provided by law, all license taxes or fees provided for in

 3  this chapter shall be collected by the commission or its duly

 4  authorized agents or deputies to be deposited by the Chief

 5  Financial Officer Comptroller in the Marine Resources

 6  Conservation Trust Fund. The commission may by rule establish

 7  a reasonable processing fee for any free license or permit

 8  required under this chapter. The commission is authorized to

 9  accept payment by credit card for fees, fines, and civil

10  penalties levied pursuant to this chapter.

11         Section 379.  Subsection (6) of section 370.16, Florida

12  Statutes, is amended to read:

13         370.16  Noncultured shellfish harvesting.--

14         (6)  SEIZURE OF VESSELS AND CARGOES VIOLATING OYSTER

15  AND CLAM LAWS, ETC.--Vessels, with their cargoes, violating

16  the provisions of the laws relating to oysters and clams may

17  be seized by anyone duly and lawfully authorized to make

18  arrests under this section or by any sheriff or the sheriff's

19  deputies, and taken into custody, and when not arrested by the

20  sheriff or the sheriff's deputies, delivered to the sheriff of

21  the county in which the seizure is made, and shall be liable

22  to forfeiture, on appropriate proceedings being instituted by

23  the Fish and Wildlife Conservation Commission, before the

24  courts of that county.  In such case the cargo shall at once

25  be disposed of by the sheriff, for account of whom it may

26  concern. Should the master or any of the crew of said vessel

27  be found guilty of using dredges or other instruments in

28  fishing oysters on natural reefs contrary to law, or fishing

29  on the natural oyster or clam reefs out of season, or

30  unlawfully taking oysters or clams belonging to a lessee, such

31  vessel shall be declared forfeited by the court, and ordered

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 1  sold and the proceeds of the sale shall be deposited with the

 2  Chief Financial Officer Treasurer to the credit of the General

 3  Revenue Fund; any person guilty of such violations shall not

 4  be permitted to have any license provided for in this chapter

 5  within a period of 1 year from the date of conviction.

 6  Pending proceedings such vessel may be released upon the owner

 7  furnishing bond, with good and solvent security in double the

 8  value of the vessel, conditioned upon its being returned in

 9  good condition to the sheriff to abide the judgment of the

10  court.

11         Section 380.  Paragraph (b) of subsection (5) and

12  subsection (6) of section 370.19, Florida Statutes, are

13  amended to read:

14         370.19  Atlantic States Marine Fisheries Compact;

15  implementing legislation.--

16         (5)  ACCOUNTS TO BE KEPT BY COMMISSION; EXAMINATION.--

17         (b)  The Department of Financial Services Banking and

18  Finance is hereby authorized and empowered from time to time

19  to examine the accounts and books of the commission, including

20  its receipts, disbursements and such other items referring to

21  its financial standing as such department deems may deem

22  proper and to report the results of such examination to the

23  governor of such state.

24         (6)  APPROPRIATION FOR EXPENSES OF COMMISSION.--The sum

25  of $600, annually, or so much thereof as may be necessary, is

26  hereby appropriated out of any moneys in the State Treasury

27  not otherwise appropriated, for the expenses of the commission

28  created by the compact authorized by this law.  The moneys

29  hereby appropriated shall be paid out of the State Treasury on

30  the audit and warrant of the Chief Financial Officer

31  

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 1  Comptroller upon vouchers certified by the chair of the

 2  commission in the manner prescribed by law.

 3         Section 381.  Subsection (5) of section 370.20, Florida

 4  Statutes, is amended to read:

 5         370.20  Gulf States Marine Fisheries Compact;

 6  implementing legislation.--

 7         (5)  ACCOUNTS TO BE KEPT BY COMMISSION;

 8  EXAMINATION.--The commission shall keep accurate accounts of

 9  all receipts and disbursements and shall report to the

10  Governor and the Legislature of the State of Florida on or

11  before the 10th day of December in each year, setting forth in

12  detail the transactions conducted by it during the 12 months

13  preceding December 1 of that year and shall make

14  recommendations for any legislative action deemed by it

15  advisable, including amendments to the statutes of the State

16  of Florida which may be necessary to carry out the intent and

17  purposes of the compact between the signatory states.

18         The Department of Financial Services Banking and

19  Finance is hereby authorized and empowered from time to time

20  to examine the accounts and books of the commission, including

21  its receipts, disbursements and such other items referring to

22  its financial standing as such department deems may deem

23  proper and to report the results of such examination to the

24  governor of such state.

25         Section 382.  Subsection (5) of section 373.503,

26  Florida Statutes, is amended to read:

27         373.503  Manner of taxation.--

28         (5)  Each water management district created under this

29  chapter which does not receive state shared revenues under

30  part II of chapter 218 shall, before January 1 of each year,

31  certify compliance or noncompliance with s. 200.065 to the

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 1  Department of Financial Services Banking and Finance.

 2  Specific grounds for noncompliance shall be stated in the

 3  certification. In its annual report required by s. 218.32(2),

 4  the Department of Financial Services Banking and Finance shall

 5  report to the Governor and the Legislature those water

 6  management districts certifying noncompliance or not

 7  reporting.

 8         Section 383.  Paragraph (e) of subsection (10) of

 9  section 373.59, Florida Statutes, is amended to read:

10         373.59  Water Management Lands Trust Fund.--

11         (10)

12         (e)  Payment in lieu of taxes pursuant to this

13  subsection shall be made annually to qualifying counties and

14  local governments after certification by the Department of

15  Revenue that the amounts applied for are reasonably

16  appropriate, based on the amount of actual taxes paid on the

17  eligible property, and after the water management districts

18  have provided supporting documents to the Chief Financial

19  Officer Comptroller and have requested that payment be made in

20  accordance with the requirements of this section.

21         Section 384.  Subsection (2) of section 373.6065,

22  Florida Statutes, is amended to read:

23         373.6065  Adoption benefits for water management

24  district employees.--

25         (2)  The Chief Financial Officer Comptroller and the

26  Department of Management Services shall transfer funds to

27  water management districts to pay eligible water management

28  district employees for these child adoption monetary benefits

29  in accordance with s. 215.32(1)(c)5., as long as funds remain

30  available for the program described under s. 110.152.

31  

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 1         Section 385.  Subsection (2) of section 374.983,

 2  Florida Statutes, is amended to read:

 3         374.983  Governing body.--

 4         (2)  The present board of commissioners of the district

 5  shall continue to hold office until their respective terms

 6  shall expire. Thereafter the members of the board shall

 7  continue to be appointed by the Governor for a term of 4 years

 8  and until their successors shall be duly appointed.

 9  Specifically, commencing on January 10, 1997, the Governor

10  shall appoint the commissioners from Broward, Indian River,

11  Martin, St. Johns, and Volusia Counties and on January 10,

12  1999, the Governor shall appoint the commissioners from

13  Brevard, Dade, Duval, Flagler, Palm Beach, and St. Lucie

14  Counties. Each new appointee must be confirmed by the Senate.

15  Whenever a vacancy occurs among the commissioners, the person

16  appointed to fill such vacancy shall hold office for the

17  unexpired portion of the term of the commissioner whose place

18  he or she is selected to fill. Each commissioner under this

19  act before he or she assumes office shall be required to give

20  a good and sufficient surety bond in the sum of $10,000

21  payable to the Governor and his or her successors in office,

22  conditioned upon the faithful performance of the duties of his

23  or her office, such said bond to be approved by and filed with

24  the Chief Financial Officer Comptroller. Any and all premiums

25  upon such said surety bonds shall be paid by the board of

26  commissioners of such said district as a necessary expense of

27  the district.

28         Section 386.  Subsection (2) of section 374.986,

29  Florida Statutes, is amended to read:

30         374.986  Taxing authority.--

31  

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 1         (2)  The board may annually assess and levy against the

 2  taxable property in the district a tax not to exceed one-tenth

 3  mill on the dollar for each year, and the proceeds from such

 4  tax shall be used by the district for all expenses of the

 5  district including the purchase price of right-of-way and

 6  other property. The board shall, on or before the 31st day of

 7  July of each year, prepare a tentative annual written budget

 8  of the district's expected income and expenditures. In

 9  addition, the board shall compute a proposed millage rate to

10  be levied as taxes for that year upon the taxable property in

11  the district for the purposes of said district. The proposed

12  budget shall be submitted to the Department of Environmental

13  Protection for its approval. Prior to adopting a final budget,

14  the district shall comply with the provisions of s. 200.065,

15  relating to the method of fixing millage, and shall fix the

16  final millage rate by resolution of the district and shall

17  also, by resolution, adopt a final budget pursuant to chapter

18  200.  Copies of such resolutions executed in the name of the

19  board by its chair, and attested by its secretary, shall be

20  made and delivered to the county officials specified in s.

21  200.065 of each and every county in the district, to the

22  Department of Revenue, and to the Chief Financial Officer

23  Comptroller. Thereupon, it shall be the duty of the property

24  assessor of each of said counties to assess, and the tax

25  collector of each of said counties to collect, a tax at the

26  rate fixed by said resolution of the board upon all of the

27  real and personal taxable property in said counties for said

28  year (and such officers shall perform such duty) and said levy

29  shall be included in the warrant of the tax assessors of each

30  of said counties and attached to the assessment roll of taxes

31  for each of said counties. The tax collectors of each of said

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 1  counties shall collect such taxes so levied by the board in

 2  the same manner as other taxes are collected, and shall pay

 3  the same within the time and in the manner prescribed by law,

 4  to the treasurer of the board. It shall be the duty of the

 5  Chief Financial Officer Comptroller to assess and levy on all

 6  railroad lines and railroad property and telegraph lines and

 7  telegraph property in the district a tax at the rate

 8  prescribed by resolution of the board, and to collect the tax

 9  thereon in the same manner as he or she is required by law to

10  assess and collect taxes for state and county purposes and to

11  remit the same to the treasurer of the board. All such taxes

12  shall be held by the treasurer of the district for the credit

13  of the district and paid out by him or her as provided herein.

14  The tax assessor and property appraiser of each of said

15  counties shall be entitled to payment as provided for by

16  general laws.

17         Section 387.  Subsection (3) of section 376.11, Florida

18  Statutes, is amended to read:

19         376.11  Florida Coastal Protection Trust Fund.--

20         (3)  Moneys in the fund that are not needed currently

21  to meet the obligations of the department in the exercise of

22  its responsibilities under ss. 376.011-376.21 shall be

23  deposited with the Chief Financial Officer Treasurer to the

24  credit of the fund and may be invested in such manner as is

25  provided for by statute. Interest received on such investment

26  shall be credited to the fund, except as otherwise specified

27  herein.

28         Section 388.  Subsection (5) of section 376.123,

29  Florida Statutes, is amended to read:

30         376.123  Claims against the Florida Coastal Protection

31  Trust Fund.--

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 1         (5)  The secretary shall establish the amount to be

 2  awarded and shall certify the amount of the award and the name

 3  of the claimant to the Chief Financial Officer State

 4  Treasurer, who shall pay the award from the fund, subject to

 5  the provisions of subsection (12).  If the claimant agrees

 6  with the established amount of award, the settlement shall be

 7  binding upon both parties as to all issues and cannot be

 8  further attacked, collaterally or by separate action, in the

 9  future.

10         Section 389.  Subsection (6) of section 376.307,

11  Florida Statutes, is amended to read:

12         376.307  Water Quality Assurance Trust Fund.--

13         (6)  Moneys in the fund which are not needed currently

14  to meet the obligations of the department in the exercise of

15  its responsibilities under this section shall be deposited

16  with the Chief Financial Officer Treasurer to the credit of

17  the fund and may be invested in such manner as is provided for

18  by statute.  The interest received on such investment shall be

19  credited to the fund.  Any provisions of law to the contrary

20  notwithstanding, such interest may be freely transferred

21  between this trust fund and the Inland Protection Trust Fund,

22  in the discretion of the department.

23         Section 390.  Subsection (8) and paragraph (k) of

24  subsection (12) of section 376.3071, Florida Statutes, are

25  amended to read:

26         376.3071  Inland Protection Trust Fund; creation;

27  purposes; funding.--

28         (8)  INVESTMENTS; INTEREST.--Moneys in the fund which

29  are not needed currently to meet the obligations of the

30  department in the exercise of its responsibilities under this

31  section and s. 376.3073 shall be deposited with the Chief

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 1  Financial Officer Treasurer to the credit of the fund and may

 2  be invested in such manner as is provided for by statute.  The

 3  interest received on such investment shall be credited to the

 4  fund.  Any provisions of law to the contrary notwithstanding,

 5  such interest may be freely transferred between this trust

 6  fund and the Water Quality Assurance Trust Fund, in the

 7  discretion of the department.

 8         (12)  REIMBURSEMENT FOR CLEANUP EXPENSES.--Except as

 9  provided in s. 2(3), chapter 95-2, Laws of Florida, this

10  subsection shall not apply to any site rehabilitation program

11  task initiated after March 29, 1995. Effective August 1, 1996,

12  no further site rehabilitation work on sites eligible for

13  state-funded cleanup from the Inland Protection Trust Fund

14  shall be eligible for reimbursement pursuant to this

15  subsection.  The person responsible for conducting site

16  rehabilitation may seek reimbursement for site rehabilitation

17  program task work conducted after March 28, 1995, in

18  accordance with s. 2(2) and (3), chapter 95-2, Laws of

19  Florida, regardless of whether the site rehabilitation program

20  task is completed.  A site rehabilitation program task shall

21  be considered to be initiated when actual onsite work or

22  engineering design, pursuant to chapter 62-770, Florida

23  Administrative Code, which is integral to performing a site

24  rehabilitation program task has begun and shall not include

25  contract negotiation and execution, site research, or project

26  planning.  All reimbursement applications pursuant to this

27  subsection must be submitted to the department by January 3,

28  1997.  The department shall not accept any applications for

29  reimbursement or pay any claims on applications for

30  reimbursement received after that date; provided, however if

31  an application filed on or prior to January 3, 1997, was

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 1  returned by the department on the grounds of untimely filing,

 2  it shall be refiled within 30 days after the effective date of

 3  this act in order to be processed.

 4         (k)  Audits.--

 5         1.  The department is authorized to perform financial

 6  and technical audits in order to certify site restoration

 7  costs and ensure compliance with this chapter.  The department

 8  shall seek recovery of any overpayments based on the findings

 9  of these audits. The department must commence any audit within

10  5 years after the date of reimbursement, except in cases where

11  the department alleges specific facts indicating fraud.

12         2.  Upon determination by the department that any

13  portion of costs which have been reimbursed are disallowed,

14  the department shall give written notice to the applicant

15  setting forth with specificity the allegations of fact which

16  justify the department's proposed action and ordering

17  repayment of disallowed costs within 60 days of notification

18  of the applicant.

19         3.  In the event the applicant does not make payment to

20  the department within 60 days of receipt of such notice, the

21  department shall seek recovery in a court of competent

22  jurisdiction to recover reimbursement overpayments made to the

23  person responsible for conducting site rehabilitation, unless

24  the department finds the amount involved too small or the

25  likelihood of recovery too uncertain.

26         4.  In addition to the amount of any overpayment, the

27  applicant shall be liable to the department for interest of 1

28  percent per month or the prime rate, whichever is less, on the

29  amount of overpayment, from the date of overpayment by the

30  department until the applicant satisfies the department's

31  request for repayment pursuant to this paragraph.  The

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 1  calculation of interest shall be tolled during the pendency of

 2  any litigation.

 3         5.  Financial and technical audits frequently are

 4  conducted under this section many years after the site

 5  rehabilitation activities were performed and the costs

 6  examined in the course of the audit were incurred by the

 7  person responsible for site rehabilitation.  During the

 8  intervening span of years, the department's rule requirements

 9  and its related guidance and other nonrule policy directives

10  may have changed significantly.  The Legislature finds that it

11  may be appropriate for the department to provide relief to

12  persons subject to such requirements in financial and

13  technical audits conducted pursuant to this section.

14         a.  The department is authorized to grant variances and

15  waivers from the documentation requirements of subparagraph

16  (e)2. and from the requirements of rules applicable in

17  technical and financial audits conducted under this section.

18  Variances and waivers shall be granted when the person

19  responsible for site rehabilitation demonstrates to the

20  department that application of a financial or technical

21  auditing requirement would create a substantial hardship or

22  would violate principles of fairness.  For purposes of this

23  subsection, "substantial hardship" means a demonstrated

24  economic, technological, legal, or other type of hardship to

25  the person requesting the variance or waiver.  For purposes of

26  this subsection, "principles of fairness" are violated when

27  the application of a requirement affects a particular person

28  in a manner significantly different from the way it affects

29  other similarly situated persons who are affected by the

30  requirement or when the requirement is being applied

31  retroactively without due notice to the affected parties.

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 1         b.  A person whose reimbursed costs are subject to a

 2  financial and technical audit under this section may file a

 3  written request to the department for grant of a variance or

 4  waiver.  The request shall specify:

 5         (I)  The requirement from which a variance or waiver is

 6  requested.

 7         (II)  The type of action requested.

 8         (III)  The specific facts which would justify a waiver

 9  or variance.

10         (IV)  The reason or reasons why the requested variance

11  or waiver would serve the purposes of this section.

12         c.  Within 90 days after receipt of a written request

13  for variance or waiver under this subsection, the department

14  shall grant or deny the request. If the request is not granted

15  or denied within 90 days of receipt, the request shall be

16  deemed approved.  An order granting or denying the request

17  shall be in writing and shall contain a statement of the

18  relevant facts and reasons supporting the department's action.

19  The department's decision to grant or deny the petition shall

20  be supported by competent substantial evidence and is subject

21  to ss. 120.569 and 120.57.  Once adopted, model rules

22  promulgated by the Administration Commission under s. 120.542

23  shall govern the processing of requests under this provision.

24         6.  The Chief Financial Officer Comptroller may audit

25  the records of persons who receive or who have received

26  payments pursuant to this chapter in order to verify site

27  restoration costs, ensure compliance with this chapter, and

28  verify the accuracy and completeness of audits performed by

29  the department pursuant to this paragraph.  The Chief

30  Financial Officer Comptroller may contract with entities or

31  persons to perform audits pursuant to this subparagraph.  The

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 1  Chief Financial Officer Comptroller shall commence any audit

 2  within 1 year after the department's completion of an audit

 3  conducted pursuant to this paragraph, except in cases where

 4  the department or the Chief Financial Officer Comptroller

 5  alleges specific facts indicating fraud.

 6         Section 391.  Paragraphs (b) and (c) of subsection (5)

 7  of section 376.3072, Florida Statutes, are amended to read:

 8         376.3072  Florida Petroleum Liability and Restoration

 9  Insurance Program.--

10         (5)

11         (b)  The Office of Insurance Regulation of the

12  Financial Services Commission Department of Insurance shall

13  offer assistance as requested by the department to implement

14  the program.

15         (c)  Any insurance company, reinsurance company, or

16  other entity contracted with by the department shall be

17  subject to the same rules and regulations of the Office of

18  Insurance Regulation Department of Insurance applicable to

19  other insurers, reinsurers, and other entities.

20         Section 392.  Subsection (2) of section 376.3075,

21  Florida Statutes, is amended to read:

22         376.3075  Inland Protection Financing Corporation.--

23         (2)  The corporation shall be governed by a board of

24  directors consisting of the Governor or the Governor's

25  designee, the Chief Financial Officer Comptroller or the Chief

26  Financial Officer's Comptroller's designee, the Treasurer or

27  the Treasurer's designee, the chair of the Florida Black

28  Business Investment Board, and the secretary of the Department

29  of Environmental Protection.  The executive director of the

30  State Board of Administration shall be the chief executive

31  officer of the corporation and shall direct and supervise the

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 1  administrative affairs of the corporation and shall control,

 2  direct, and supervise the operation of the corporation.  The

 3  corporation shall also have such other officers as may be

 4  determined by the board of directors.

 5         Section 393.  Subsection (10) of section 376.3078,

 6  Florida Statutes, is amended to read:

 7         376.3078  Drycleaning facility restoration; funds;

 8  uses; liability; recovery of expenditures.--

 9         (10)  INSURANCE REQUIREMENTS.--The owner or operator of

10  an operating drycleaning facility or wholesale supply facility

11  shall, by January 1, 1999, have purchased third-party

12  liability insurance for $1 million of coverage for each

13  operating facility.  The owner or operator shall maintain such

14  insurance while operating as a drycleaning facility or

15  wholesale supply facility and provide proof of such insurance

16  to the department upon registration renewal each year

17  thereafter. Such requirement applies only if such insurance

18  becomes available to the owner or operator at a reasonable

19  rate and covers liability for contamination subsequent to the

20  effective date of the policy and prior to the effective date,

21  retroactive to the commencement of operations at the

22  drycleaning facility or wholesale supply facility. Such

23  insurance may be offered in group coverage policies with a

24  minimum coverage of $1 million for each member of the group

25  per year. For the purposes of this subsection, reasonable rate

26  means the rate developed based on exposure to loss and

27  underwriting and administrative costs as determined by the

28  Office of Insurance Regulation of the Financial Services

29  Commission Department of Insurance, in consultation with

30  representatives of the drycleaning industry.

31  

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 1         Section 394.  Paragraphs (b) and (c) of subsection (4)

 2  of section 376.3079, Florida Statutes, are amended to read:

 3         376.3079  Third-party liability insurance.--

 4         (4)

 5         (b)  The Office of Insurance Regulation of the

 6  Financial Services Commission Department of Insurance shall

 7  offer assistance as requested by the department to implement

 8  the program.

 9         (c)  Any insurance company, reinsurance company, or

10  other entity contracted with by the department shall be

11  subject to the same rules of the Office of Insurance

12  Regulation Department of Insurance applicable to other

13  insurers, reinsurers, and other entities.

14         Section 395.  Subsection (6) of section 376.40, Florida

15  Statutes, is amended to read:

16         376.40  Petroleum exploration and production; purposes;

17  funding.--

18         (6)  INVESTMENTS; INTEREST.--Moneys in the trust fund

19  which are not needed currently to meet the obligations of the

20  department in the exercise of its responsibilities under this

21  section shall be deposited with the Chief Financial Officer

22  Treasurer to the credit of the trust fund and may be invested

23  as provided by law.

24         Section 396.  Section 377.23, Florida Statutes, is

25  amended to read:

26         377.23  Monthly reports to division.--Every producer of

27  oil or gas in the state shall submit to the division, on forms

28  prescribed by the division, a monthly report of the actual

29  production from each and every oil and gas well operated by

30  him or her.  Such Said producer shall submit a duplicate copy

31  of such said report at the same time to the Department of

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 1  Financial Services Banking and Finance; and such said reports

 2  shall be submitted through the medium of the United States

 3  mails, and it shall be unlawful for the same to be transmitted

 4  or received in any other way.

 5         Section 397.  Paragraph (a) of subsection (1) of

 6  section 377.2425, Florida Statutes, is amended to read:

 7         377.2425  Manner of providing security for geophysical

 8  exploration, drilling, and production.--

 9         (1)  Prior to granting a permit to conduct geophysical

10  operations; drilling of exploratory, injection, or production

11  wells; producing oil and gas from a wellhead; or transporting

12  oil and gas through a field-gathering system, the department

13  shall require the applicant or operator to provide surety that

14  these operations will be conducted in a safe and

15  environmentally compatible manner.

16         (a)  The applicant for a drilling, production, or

17  injection well permit or a geophysical permit may provide the

18  following types of surety to the department for this purpose:

19         1.  A deposit of cash or other securities made payable

20  to the Minerals Trust Fund. Such cash or securities so

21  deposited shall be held at interest by the Chief Financial

22  Officer Comptroller to satisfy safety and environmental

23  performance provisions of this chapter.  The interest shall be

24  credited to the Minerals Trust Fund.  Such cash or other

25  securities shall be released by the Chief Financial Officer

26  Comptroller upon request of the applicant and certification by

27  the department that all safety and environmental performance

28  provisions established by the department for permitted

29  activities have been fulfilled.

30         2.  A bond of a surety company authorized to do

31  business in the state in an amount as provided by rule.

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 1         3.  A surety in the form of an irrevocable letter of

 2  credit in an amount as provided by rule guaranteed by an

 3  acceptable financial institution.

 4         Section 398.  Paragraph (c) of subsection (4) of

 5  section 377.705, Florida Statutes, is amended to read:

 6         377.705  Solar Energy Center; development of solar

 7  energy standards.--

 8         (4)  FLORIDA SOLAR ENERGY CENTER TO SET STANDARDS,

 9  REQUIRE DISCLOSURE, SET TESTING FEES.--

10         (c)  The center shall be entitled to receive a testing

11  fee sufficient to cover the costs of such testing.  All

12  testing fees shall be transmitted by the center to the Chief

13  Financial Officer State Treasurer to be deposited in the Solar

14  Energy Center Testing Trust Fund, which is hereby created in

15  the State Treasury, and disbursed for the payment of expenses

16  incurred in testing solar energy systems.

17         Section 399.  Paragraph (a) of subsection (2) of

18  section 378.035, Florida Statutes, is amended to read:

19         378.035  Department responsibilities and duties with

20  respect to Nonmandatory Land Reclamation Trust Fund.--

21         (2)(a)  The department shall verify that reclamation

22  activities or portions thereof have been accomplished in

23  accordance with the reclamation contract and shall certify the

24  cost of such reclamation activities to the Chief Financial

25  Officer Comptroller for reimbursement.

26         Section 400.  Section 378.037, Florida Statutes, is

27  amended to read:

28         378.037  Chief Financial Officer Comptroller;

29  responsibilities and duties with respect to reimbursement of

30  reclamation costs.--

31  

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 1         (1)  The Chief Financial Officer Comptroller shall

 2  reimburse approved reclamation costs, less any amount

 3  reasonably retained to ensure completion of the approved

 4  reclamation program, subject to the following limitations:

 5         (a)  A landowner shall not be entitled to payments in

 6  excess of the funds available in the Nonmandatory Land

 7  Reclamation Trust Fund.

 8         (b)  Cost reimbursement shall not exceed the least of:

 9         1.  The amount actually expended and reasonably

10  necessary to effect the reclamation consistent with the

11  standards of the approved master reclamation plan;

12         2.  The reclamation contract amount; or

13         3.  The amount allowed based on prereclamation land

14  form, to include mined-out areas at $4,000 per reclaimed acre

15  and clay settling areas and other land forms at $2,500 per

16  reclaimed acre adjusted annually by the appropriate

17  inflationary index for construction.

18         (2)  The Chief Financial Officer Comptroller shall

19  adopt rules to implement the payment provisions of the master

20  reclamation plan and this section, including, but not limited

21  to, periodic reimbursements and competitive procurement of

22  services and commodities to the extent practicable, unless a

23  landowner elects to utilize his or her own personnel and

24  equipment.  The landowner may select a method of reimbursement

25  from the alternatives adopted by the Chief Financial Officer

26  Comptroller.

27         Section 401.  Subsection (3) of section 378.208,

28  Florida Statutes, is amended to read:

29         378.208  Financial responsibility.--

30         (3)  The amount of financial responsibility shall be

31  established by the secretary and shall not exceed $4,000 per

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 1  acre for each reclamation program, adjusted annually by the

 2  appropriate inflationary index for construction. The Office of

 3  Insurance Regulation of the Financial Services Commission

 4  Department of Insurance shall be available to assist the

 5  secretary in making this determination. In establishing the

 6  amount of financial responsibility, the secretary shall

 7  consider:

 8         (a)  The amount and type of reclamation involved.

 9         (b)  The probable cost of proper reclamation.

10         (c)  Inflation rates.

11         (d)  Changes in mining operations.

12         Section 402.  Subsection (2) of section 381.765,

13  Florida Statutes, is amended to read:

14         381.765  Retention of title to and disposal of

15  equipment.--

16         (2)  The department may offer for sale any surplus

17  items acquired in operating the brain and spinal cord injury

18  program when they are no longer necessary or exchange them for

19  necessary items that may be used to greater advantage. When

20  any such surplus equipment is sold or exchanged, a receipt for

21  the equipment shall be taken from the purchaser showing the

22  consideration given for such equipment and forwarded to the

23  Chief Financial Officer Treasurer, and any funds received by

24  the brain and spinal cord injury program pursuant to any such

25  transaction shall be deposited in the Brain and Spinal Cord

26  Injury Rehabilitation Trust Fund and shall be available for

27  expenditure for any purpose consistent with this part.

28         Section 403.  Subsection (3) of section 381.90, Florida

29  Statutes, is amended to read:

30         381.90  Health Information Systems Council; legislative

31  intent; creation, appointment, duties.--

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 1         (3)  The council shall be composed of the following

 2  members or their senior executive-level designees:

 3         (a)  The secretary of the Department of Health;

 4         (b)  The secretary of the Department of Business and

 5  Professional Regulation;

 6         (c)  The secretary of the Department of Children and

 7  Family Services;

 8         (d)  The Secretary of Health Care Administration;

 9         (e)  The secretary of the Department of Corrections;

10         (f)  The Attorney General;

11         (g)  The executive director of the Correctional Medical

12  Authority;

13         (h)  Two members representing county health

14  departments, one from a small county and one from a large

15  county, appointed by the Governor;

16         (i)  A representative from the Florida Association of

17  Counties;

18         (j)  The Chief Financial Officer State Treasurer and

19  Insurance Commissioner;

20         (k)  A representative from the Florida Healthy Kids

21  Corporation;

22         (l)  A representative from a school of public health

23  chosen by the Board of Regents;

24         (m)  The Commissioner of Education;

25         (n)  The secretary of the Department of Elderly

26  Affairs; and

27         (o)  The secretary of the Department of Juvenile

28  Justice.

29  

30  Representatives of the Federal Government may serve without

31  voting rights.

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 1         Section 404.  Effective July 1, 2003, subsection (3) of

 2  section 385.207, Florida Statutes, is amended to read:

 3         385.207  Care and assistance of persons with epilepsy;

 4  establishment of programs in epilepsy control.--

 5         (3)  Revenue for statewide implementation of programs

 6  for epilepsy prevention and education pursuant to this section

 7  shall be derived pursuant to the provisions of s. 318.21(6)

 8  and shall be deposited in the Epilepsy Services Trust Fund,

 9  which is hereby established to be administered by the

10  Department of Health. All funds deposited into the trust fund

11  shall be invested pursuant to the provisions of s. 17.61 s.

12  18.125. Interest income accruing to such invested funds shall

13  increase the total funds available under this subsection.

14         Section 405.  Subsection (5) of section 388.201,

15  Florida Statutes, is amended to read:

16         388.201  District budgets; hearing.--

17         (5)  County commissioners' mosquito and arthropod

18  control budgets shall be made and adopted as prescribed by

19  subsections (1) and (2); summary figures shall be incorporated

20  into the county budgets as prescribed by the Department of

21  Financial Services Banking and Finance.

22         Section 406.  Section 388.301, Florida Statutes, is

23  amended to read:

24         388.301  Payment of state funds; supplies and

25  services.--State funds shall be payable quarterly, in

26  accordance with the rules of the department, upon requisition

27  by the department to the Chief Financial Officer Comptroller.

28  The department is authorized to furnish insecticides,

29  chemicals, materials, equipment, vehicles, and personnel in

30  lieu of state funds where mass purchasing may save funds for

31  the state, or where it would be more practical and economical

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 1  to use equipment, supplies, and services between two or more

 2  counties or districts.

 3         Section 407.  Subsection (3) of section 391.025,

 4  Florida Statutes, is amended to read:

 5         391.025  Applicability and scope.--

 6         (3)  The Children's Medical Services program shall not

 7  be deemed an insurer and is not subject to the licensing

 8  requirements of the Florida Insurance Code or the rules

 9  adopted thereunder of the Department of Insurance, when

10  providing services to children who receive Medicaid benefits,

11  other Medicaid-eligible children with special health care

12  needs, and children participating in the Florida Kidcare

13  program.

14         Section 408.  Subsection (2) of section 391.221,

15  Florida Statutes, is amended to read:

16         391.221  Statewide Children's Medical Services Network

17  Advisory Council.--

18         (2)  The council shall be composed of 12 members

19  representing the private health care provider sector, families

20  with children who have special health care needs, the Agency

21  for Health Care Administration, the Office of Insurance

22  Regulation of the Financial Services Commission Department of

23  Insurance, the Florida Chapter of the American Academy of

24  Pediatrics, an academic health center pediatric program, and

25  the health insurance industry. Members shall be appointed for

26  4-year, staggered terms.  In no case shall an employee of the

27  Department of Health serve as a member or as an ex officio

28  member of the advisory council.  A vacancy shall be filled for

29  the remainder of the unexpired term in the same manner as the

30  original appointment.  A member may not be appointed to more

31  

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 1  than two consecutive terms.  However, a member may be

 2  reappointed after being off the council for at least 2 years.

 3         Section 409.  Subsection (2) of section 392.69, Florida

 4  Statutes, is amended to read:

 5         392.69  Appropriation, sinking, and maintenance trust

 6  funds; additional powers of the department.--

 7         (2)  All moneys required to be paid by the several

 8  counties and patients for the care and maintenance of patients

 9  hospitalized by the department for tuberculosis shall be paid

10  to the department, and the department shall immediately

11  transmit these moneys to the Chief Financial Officer

12  Treasurer, who shall deposit the moneys in the Operations and

13  Maintenance Trust Fund, which shall contain all moneys

14  appropriated by the Legislature or received from patients or

15  other third parties and shall be expended for the operation

16  and maintenance of the state-operated tuberculosis hospital.

17         Section 410.  Subsection (5) of section 393.002,

18  Florida Statutes, is amended to read:

19         393.002  Transfer of Florida Developmental Disabilities

20  Council as formerly created in this chapter to private

21  nonprofit corporation.--

22         (5)  Pursuant to the applicable provisions of chapter

23  284, the Division of Risk Management of the Department of

24  Financial Services Insurance is authorized to insure this

25  nonprofit corporation under the same general terms and

26  conditions as the Florida Developmental Disabilities Council

27  was insured in the Department of Children and Family Services

28  by the division prior to the transfer of its functions

29  authorized by this section.

30         Section 411.  Subsection (2) of section 393.075,

31  Florida Statutes, is amended to read:

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 1         393.075  General liability coverage.--

 2         (2)  The Division of Risk Management of the Department

 3  of Financial Services Insurance shall provide coverage through

 4  the Department of Children and Family Services to any person

 5  who owns or operates a foster care facility or group home

 6  facility solely for the Department of Children and Family

 7  Services, who cares for children placed by developmental

 8  services staff of the department, and who is licensed pursuant

 9  to s. 393.067 to provide such supervision and care in his or

10  her place of residence. The coverage shall be provided from

11  the general liability account of the State Risk Management

12  Trust Fund.  The coverage is limited to general liability

13  claims arising from the provision of supervision and care of

14  children in a foster care facility or group home facility

15  pursuant to an agreement with the department and pursuant to

16  guidelines established through policy, rule, or statute.

17  Coverage shall be subject to the limits provided in ss. 284.38

18  and 284.385, and the exclusions set forth therein, together

19  with other exclusions as may be set forth in the certificate

20  of coverage issued by the trust fund. A person covered under

21  the general liability account pursuant to this subsection

22  shall immediately notify the Division of Risk Management of

23  the Department of Financial Services Insurance of any

24  potential or actual claim.

25         Section 412.  Section 394.482, Florida Statutes, is

26  amended to read:

27         394.482  Payment of financial obligations imposed by

28  compact.--The compact administrator, subject to the approval

29  of the Chief Financial Officer Comptroller, may make or

30  arrange for any payments necessary to discharge any financial

31  

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 1  obligations imposed upon this state by the compact or by any

 2  supplementary agreement entered into thereunder.

 3         Section 413.  Paragraphs (a) and (c) of subsection (4)

 4  of section 400.0238, Florida Statutes, are amended to read:

 5         400.0238  Punitive damages; limitation.--

 6         (4)  Notwithstanding any other law to the contrary, the

 7  amount of punitive damages awarded pursuant to this section

 8  shall be equally divided between the claimant and the Quality

 9  of Long-Term Care Facility Improvement Trust Fund, in

10  accordance with the following provisions:

11         (a)  The clerk of the court shall transmit a copy of

12  the jury verdict to the Chief Financial Officer State

13  Treasurer by certified mail. In the final judgment, the court

14  shall order the percentages of the award, payable as provided

15  herein.

16         (c)  The Department of Financial Services Banking and

17  Finance shall collect or cause to be collected all payments

18  due the state under this section. Such payments are made to

19  the Chief Financial Officer Comptroller and deposited in the

20  appropriate fund specified in this subsection.

21         Section 414.  Subsection (2) of section 400.063,

22  Florida Statutes, is amended to read:

23         400.063  Resident Protection Trust Fund.--

24         (2)  The agency is authorized to establish for each

25  facility, subject to intervention by the agency, a separate

26  bank account for the deposit to the credit of the agency of

27  any moneys received from the Resident Protection Trust Fund or

28  any other moneys received for the maintenance and care of

29  residents in the facility, and the agency is authorized to

30  disburse moneys from such account to pay obligations incurred

31  for the purposes of this section.  The agency is authorized to

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 1  requisition moneys from the Resident Protection Trust Fund in

 2  advance of an actual need for cash on the basis of an estimate

 3  by the agency of moneys to be spent under the authority of

 4  this section. Any bank account established under this section

 5  need not be approved in advance of its creation as required by

 6  s. 17.58 s. 18.101, but shall be secured by depository

 7  insurance equal to or greater than the balance of such account

 8  or by the pledge of collateral security in conformance with

 9  criteria established in s. 18.11. The agency shall notify the

10  Chief Financial Officer Treasurer and the Comptroller of any

11  such account so established and shall make a quarterly

12  accounting to the Chief Financial Officer Comptroller for all

13  moneys deposited in such account.

14         Section 415.  Paragraph (c) of subsection (4) of

15  section 400.071, Florida Statutes, is amended to read:

16         400.071  Application for license.--

17         (4)  Each applicant for licensure must comply with the

18  following requirements:

19         (c)  Proof of compliance with the level 2 background

20  screening requirements of chapter 435 which has been submitted

21  within the previous 5 years in compliance with any other

22  health care or assisted living licensure requirements of this

23  state is acceptable in fulfillment of paragraph (a). Proof of

24  compliance with background screening which has been submitted

25  within the previous 5 years to fulfill the requirements of the

26  Financial Services Commission and the Office of Insurance

27  Regulation Department of Insurance pursuant to chapter 651 as

28  part of an application for a certificate of authority to

29  operate a continuing care retirement community is acceptable

30  in fulfillment of the Department of Law Enforcement and

31  Federal Bureau of Investigation background check.

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 1         Section 416.  Paragraph (b) of subsection (1) of

 2  section 400.4174, Florida Statutes, is amended to read:

 3         400.4174  Background screening; exemptions.--

 4         (1)

 5         (b)  Proof of compliance with level 2 screening

 6  standards which has been submitted within the previous 5 years

 7  to meet any facility or professional licensure requirements of

 8  the agency or the Department of Health satisfies the

 9  requirements of this subsection, provided that such proof is

10  accompanied, under penalty of perjury, by an affidavit of

11  compliance with the provisions of chapter 435. Proof of

12  compliance with the background screening requirements of the

13  Financial Services Commission and the Office of Insurance

14  Regulation Department of Insurance for applicants for a

15  certificate of authority to operate a continuing care

16  retirement community under chapter 651, submitted within the

17  last 5 years, satisfies the Department of Law Enforcement and

18  Federal Bureau of Investigation portions of a level 2

19  background check.

20         Section 417.  Paragraphs (a) and (c) of subsection (4)

21  of section 400.4298, Florida Statutes, are amended to read:

22         400.4298  Punitive damages; limitation.--

23         (4)  Notwithstanding any other law to the contrary, the

24  amount of punitive damages awarded pursuant to this section

25  shall be equally divided between the claimant and the Quality

26  of Long-Term Care Facility Improvement Trust Fund, in

27  accordance with the following provisions:

28         (a)  The clerk of the court shall transmit a copy of

29  the jury verdict to the Chief Financial Officer State

30  Treasurer by certified mail. In the final judgment, the court

31  

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 1  shall order the percentages of the award, payable as provided

 2  herein.

 3         (c)  The Department of Financial Services Banking and

 4  Finance shall collect or cause to be collected all payments

 5  due the state under this section. Such payments are made to

 6  the Chief Financial Officer Comptroller and deposited in the

 7  appropriate fund specified in this subsection.

 8         Section 418.  Paragraph (c) of subsection (4) of

 9  section 400.471, Florida Statutes, is amended to read:

10         400.471  Application for license; fee; provisional

11  license; temporary permit.--

12         (4)  Each applicant for licensure must comply with the

13  following requirements:

14         (c)  Proof of compliance with the level 2 background

15  screening requirements of chapter 435 which has been submitted

16  within the previous 5 years in compliance with any other

17  health care or assisted living licensure requirements of this

18  state is acceptable in fulfillment of paragraph (a). Proof of

19  compliance with background screening which has been submitted

20  within the previous 5 years to fulfill the requirements of the

21  Financial Services Commission and the Office of Insurance

22  Regulation Department of Insurance pursuant to chapter 651 as

23  part of an application for a certificate of authority to

24  operate a continuing care retirement community is acceptable

25  in fulfillment of the Department of Law Enforcement and

26  Federal Bureau of Investigation background check.

27         Section 419.  Paragraph (c) of subsection (10) of

28  section 400.962, Florida Statutes, is amended to read:

29         400.962  License required; license application.--

30         (10)

31  

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 1         (c)  Proof of compliance with the level 2 background

 2  screening requirements of chapter 435 which has been submitted

 3  within the previous 5 years in compliance with any other

 4  licensure requirements under this chapter satisfies the

 5  requirements of paragraph (a). Proof of compliance with

 6  background screening which has been submitted within the

 7  previous 5 years to fulfill the requirements of the Financial

 8  Services Commission and the Office of Insurance Regulation

 9  Department of Insurance under chapter 651 as part of an

10  application for a certificate of authority to operate a

11  continuing care retirement community satisfies the

12  requirements for the Department of Law Enforcement and Federal

13  Bureau of Investigation background checks.

14         Section 420.  Paragraph (b) of subsection (2) of

15  section 401.245, Florida Statutes, is amended to read:

16         401.245  Emergency Medical Services Advisory Council.--

17         (2)

18         (b)  Representation on the Emergency Medical Services

19  Advisory Council shall include:  two licensed physicians who

20  are "medical directors" as defined in s. 401.23(15) or whose

21  medical practice is closely related to emergency medical

22  services; two emergency medical service administrators, one of

23  whom is employed by a fire service; two certified paramedics,

24  one of whom is employed by a fire service; two certified

25  emergency medical technicians, one of whom is employed by a

26  fire service; one emergency medical services educator; one

27  emergency nurse; one hospital administrator; one

28  representative of air ambulance services; one representative

29  of a commercial ambulance operator; and two laypersons who are

30  in no way connected with emergency medical services, one of

31  whom is a representative of the elderly. Ex officio members of

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 1  the advisory council from state agencies shall include, but

 2  shall not be limited to, representatives from the Department

 3  of Education, the Department of Management Services, the

 4  Office of Insurance Regulation of the Financial Services

 5  Commission Department of Insurance, the Department of Highway

 6  Safety and Motor Vehicles, the Department of Transportation,

 7  and the Department of Community Affairs.

 8         Section 421.  Paragraph (c) of subsection (2) of

 9  section 401.25, Florida Statutes, is amended to read:

10         401.25  Licensure as a basic life support or an

11  advanced life support service.--

12         (2)  The department shall issue a license for operation

13  to any applicant who complies with the following requirements:

14         (c)  The applicant has furnished evidence of adequate

15  insurance coverage for claims arising out of injury to or

16  death of persons and damage to the property of others

17  resulting from any cause for which the owner of such business

18  or service would be liable.  The applicant must provide

19  insurance in such sums and under such terms as required by the

20  department.  In lieu of such insurance, the applicant may

21  furnish a certificate of self-insurance evidencing that the

22  applicant has established an adequate self-insurance plan to

23  cover such risks and that the plan has been approved by the

24  Office of Insurance Regulation of the Financial Services

25  Commission Department of Insurance.

26         Section 422.  Section 402.04, Florida Statutes, is

27  amended to read:

28         402.04  Award of scholarships and stipends;

29  disbursement of funds; administration.--The award of

30  scholarships or stipends provided for herein shall be made by

31  the Department of Children and Family Services, hereinafter

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 1  referred to as the department. The department shall handle the

 2  administration of the scholarship or stipend and the

 3  Department of Education shall, for and on behalf of the

 4  department, handle the notes issued for the payment of the

 5  scholarships or stipends provided for herein and the

 6  collection of same.  The department shall prescribe

 7  regulations governing the payment of scholarships or stipends

 8  to the school, college, or university for the benefit of the

 9  scholarship or stipend holders. All scholarship awards,

10  expenses and costs of administration shall be paid from moneys

11  appropriated by the Legislature and shall be paid upon

12  vouchers approved by the department and properly certified by

13  the Chief Financial Officer Comptroller.

14         Section 423.  Paragraph (b) of subsection (1) and

15  subsection (4) of section 402.17, Florida Statutes, are

16  amended to read:

17         402.17  Claims for care and maintenance; trust

18  property.--The Department of Children and Family Services

19  shall protect the financial interest of the state with respect

20  to claims which the state may have for the care and

21  maintenance of clients of the department. The department

22  shall, as trustee, hold in trust and administer money of

23  clients and property designated for the personal benefit of

24  clients. The department shall act as trustee of clients' money

25  and property entrusted to it in accordance with the usual

26  fiduciary standards applicable generally to trustees, and

27  shall act to protect both the short-term and long-term

28  interests of the clients for whose benefit it is holding such

29  money and property.

30         (1)  CLAIMS FOR CARE AND MAINTENANCE.--

31  

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 1         (b)  The Department of Children and Family Services may

 2  charge off accounts if it certifies that the accounts are

 3  uncollectible after diligent efforts have been made to collect

 4  them.  If the department certifies an account to the

 5  Department of Financial Services Banking and Finance, setting

 6  forth the circumstances upon which it predicates the

 7  uncollectibility, and if, pursuant to s. 17.04, the Department

 8  of Financial Services Banking and Finance concurs, the account

 9  shall be charged off.

10         (4)  DISPOSITION OF UNCLAIMED TRUST FUNDS.--Upon the

11  death of any client affected by the provisions of this

12  section, any unclaimed money held in trust by the department

13  or by the Chief Financial Officer Treasurer for him or her

14  shall be applied first to the payment of any unpaid claim of

15  the state against the client, and any balance remaining

16  unclaimed for a period of 1 year shall escheat to the state as

17  unclaimed funds held by fiduciaries.

18         Section 424.  Paragraph (a) of subsection (8) of

19  section 402.33, Florida Statutes, is amended to read:

20         402.33  Department authority to charge fees for

21  services provided.--

22         (8)(a)  Unpaid fees for services provided by the

23  department to a client constitute a lien on any property owned

24  by the client or the client's responsible party which property

25  is not exempt by s. 4, Art. X of the State Constitution.  If

26  fees are not paid within 6 months after they are billed, the

27  department shall charge interest on the unpaid balance at a

28  rate equal to the average rate of interest earned by the State

29  Treasury on state funds deposited in commercial banks as

30  reported by the Chief Financial Officer Treasurer for the

31  previous year. The department is authorized to negotiate and

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 1  settle any delinquent account, and to charge off any

 2  delinquent account even though the claim of the department may

 3  be against the client, a responsible party, or a payor of

 4  third-party benefits, either directly for the department or as

 5  a fiduciary for the client or responsible party.

 6         Section 425.  Paragraph (a) of subsection (8) of

 7  section 403.1835, Florida Statutes, is amended to read:

 8         403.1835  Water pollution control financial

 9  assistance.--

10         (8)(a)  If a local governmental agency becomes

11  delinquent on its loan, the department shall so certify to the

12  Chief Financial Officer Comptroller, who shall forward the

13  amount delinquent to the department from any unobligated funds

14  due to the local governmental agency under any revenue-sharing

15  or tax-sharing fund established by the state, except as

16  otherwise provided by the State Constitution. Certification of

17  delinquency shall not limit the department from pursuing other

18  remedies available for default on a loan. The department may

19  impose a penalty for delinquent loan payments in an amount not

20  to exceed an interest rate of 18 percent per annum on the

21  amount due in addition to charging the cost to handle and

22  process the debt. Penalty interest shall accrue on any amount

23  due and payable beginning on the 30th day following the date

24  upon which payment is due.

25         Section 426.  Subsection (2) of section 403.1837,

26  Florida Statutes, is amended to read:

27         403.1837  Florida Water Pollution Control Financing

28  Corporation.--

29         (2)  The corporation shall be governed by a board of

30  directors consisting of the Governor's Budget Director or the

31  budget director's designee, the Chief Financial Officer

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 1  Comptroller or the Chief Financial Officer's Comptroller's

 2  designee, the Treasurer or the Treasurer's designee, and the

 3  Secretary of Environmental Protection or the secretary's

 4  designee, until January 7, 2003, at which time the board shall

 5  include the Chief Financial Officer or the Chief Financial

 6  Officer's designee in place of the Treasurer and Comptroller.

 7  The executive director of the State Board of Administration

 8  shall be the chief executive officer of the corporation; shall

 9  direct and supervise the administrative affairs of the

10  corporation; and shall control, direct, and supervise

11  operation of the corporation. The corporation shall have such

12  other officers as may be determined by the board of directors.

13         Section 427.  Subsection (20) of section 403.706,

14  Florida Statutes, is amended to read:

15         403.706  Local government solid waste

16  responsibilities.--

17         (20)  In addition to any other penalties provided by

18  law, a local government that does not comply with the

19  requirements of subsections (2) and (4) shall not be eligible

20  for grants from the Solid Waste Management Trust Fund, and the

21  department may notify the Chief Financial Officer State

22  Treasurer to withhold payment of all or a portion of funds

23  payable to the local government by the department from the

24  General Revenue Fund or by the department from any other state

25  fund, to the extent not pledged to retire bonded indebtedness,

26  unless the local government demonstrates that good faith

27  efforts to meet the requirements of subsections (2) and (4)

28  have been made or that the funds are being or will be used to

29  finance the correction of a pollution control problem that

30  spans jurisdictional boundaries.

31  

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 1         Section 428.  Subsection (3) of section 403.724,

 2  Florida Statutes, is amended to read:

 3         403.724  Financial responsibility.--

 4         (3)  The amount of financial responsibility required

 5  shall be approved by the department upon each issuance,

 6  renewal, or modification of a hazardous waste facility permit.

 7  Such factors as inflation rates and changes in operation may

 8  be considered when approving financial responsibility for the

 9  duration of the permit. The Office of Insurance Regulation of

10  the Financial Services Commission Department of Insurance

11  shall be available to assist the department in making this

12  determination. In approving or modifying the amount of

13  financial responsibility, the department shall consider:

14         (a)  The amount and type of hazardous waste involved;

15         (b)  The probable damage to human health and the

16  environment;

17         (c)  The danger and probable damage to private and

18  public property near the facility;

19         (d)  The probable time that the hazardous waste and

20  facility involved will endanger the public health, safety, and

21  welfare or the environment; and

22         (e)  The probable costs of properly closing the

23  facility.

24         Section 429.  Paragraph (a) of subsection (15) of

25  section 403.8532, Florida Statutes, is amended to read:

26         403.8532  Drinking water state revolving loan fund;

27  use; rules.--

28         (15)(a)  If a local governmental agency defaults under

29  the terms of its loan agreement, the department shall so

30  certify to the Chief Financial Officer Comptroller, who shall

31  forward the amount delinquent to the department from any

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 1  unobligated funds due to the local governmental agency under

 2  any revenue-sharing or tax-sharing fund established by the

 3  state, except as otherwise provided by the State Constitution.

 4  Certification of delinquency shall not limit the department

 5  from pursuing other remedies available for default on a loan,

 6  including accelerating loan repayments, eliminating all or

 7  part of the interest rate subsidy on the loan, and court

 8  appointment of a receiver to manage the public water system.

 9         Section 430.  Paragraphs (a), (b), (c), and (e) of

10  subsection (2) of section 404.111, Florida Statutes, are

11  amended to read:

12         404.111  Surety requirements.--

13         (2)  In lieu of posting a bond as required under

14  subsection (1), a licensee may:

15         (a)  Deposit with the Chief Financial Officer Treasurer

16  securities of the type eligible for deposit by insurers under

17  s. 625.52, which securities must have at all times a market

18  value of not less than the amount of the bond required under

19  subsection (1).

20         (b)  Whenever the market value of the securities

21  deposited with the Chief Financial Officer Treasurer is less

22  than 95 percent of the amount required by the department, the

23  licensee shall deposit additional securities or otherwise

24  increase the deposit to the amount required.

25         (c)  The state is responsible for the safekeeping of

26  all securities deposited with the Chief Financial Officer

27  Treasurer under this section. Such securities are not, on

28  account of being in this state, subject to taxation but shall

29  be held exclusively and solely to guarantee the faithful

30  performance by the licensee of its obligations.

31  

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 1         (e)  Such deposit shall be maintained unimpaired so

 2  long as the licensee continues in business in this state.

 3  Whenever the licensee ceases to do business in this state and

 4  furnishes the department satisfactory proof that it has

 5  discharged or otherwise adequately provided for all its

 6  obligations in this state, the Chief Financial Officer

 7  Treasurer shall release the deposit securities to the parties

 8  entitled thereto, on the receipt of authorization from the

 9  department.

10         Section 431.  Subsection (2) of section 406.58, Florida

11  Statutes, is amended to read:

12         406.58  Fees; authority to accept additional funds;

13  annual audit.--

14         (2)  The anatomical board is hereby empowered to

15  receive money from public or private sources in addition to

16  the fees collected from the institution or association to

17  which the bodies are distributed to be used to defray the

18  costs of embalming, handling, shipping, storage, cremation,

19  and other costs relating to the obtaining and use of such

20  bodies as described in this chapter; the anatomical board is

21  empowered to pay the reasonable expenses incurred by any

22  person delivering the bodies as described in this chapter to

23  the anatomical board and is further empowered to enter into

24  contracts and perform such other acts as are necessary to the

25  proper performance of its duties; a complete record of all

26  fees and other financial transactions of said anatomical board

27  shall be kept and audited annually by the Department of

28  Financial Services Banking and Finance, and a report of such

29  audit shall be made annually to the University of Florida.

30         Section 432.  Paragraph (b) of subsection (2) of

31  section 408.040, Florida Statutes, is amended to read:

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 1         408.040  Conditions and monitoring.--

 2         (2)

 3         (b)  A certificate of need issued to an applicant

 4  holding a provisional certificate of authority under chapter

 5  651 shall terminate 1 year after the applicant receives a

 6  valid certificate of authority from the Office of Insurance

 7  Regulation of the Financial Services Commission Department of

 8  Insurance.

 9         Section 433.  Paragraph (a) of subsection (8) of

10  section 408.05, Florida Statutes, is amended to read:

11         408.05  State Center for Health Statistics.--

12         (8)  STATE COMPREHENSIVE HEALTH INFORMATION SYSTEM

13  ADVISORY COUNCIL.--

14         (a)  There is established in the agency the State

15  Comprehensive Health Information System Advisory Council to

16  assist the center in reviewing the comprehensive health

17  information system and to recommend improvements for such

18  system. The council shall consist of the following members:

19         1.  An employee of the Executive Office of the

20  Governor, to be appointed by the Governor.

21         2.  An employee of the Department of Financial Services

22  Department of Insurance, to be appointed by the Chief

23  Financial Officer Insurance Commissioner.

24         3.  An employee of the Department of Education, to be

25  appointed by the Commissioner of Education.

26         4.  Ten persons, to be appointed by the Secretary of

27  Health Care Administration, representing other state and local

28  agencies, state universities, the Florida Association of

29  Business/Health Coalitions, local health councils,

30  professional health-care-related associations, consumers, and

31  purchasers.

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 1         Section 434.  Subsection (4) of section 408.08, Florida

 2  Statutes, is amended to read:

 3         408.08  Inspections and audits; violations; penalties;

 4  fines; enforcement.--

 5         (4)  If a health insurer does not comply with the

 6  requirements of s. 408.061, the agency shall report a health

 7  insurer's failure to comply to the Office of Insurance

 8  Regulation of the Financial Services Commission Department of

 9  Insurance, which shall take into account the failure by the

10  health insurer to comply in conjunction with its approval

11  authority under s. 627.410.  The agency shall adopt any rules

12  necessary to carry out its responsibilities required by this

13  subsection.

14         Section 435.  Paragraph (a) of subsection (4) and

15  subsection (9) of section 408.18, Florida Statutes, are

16  amended to read:

17         408.18  Health Care Community Antitrust Guidance Act;

18  antitrust no-action letter; market-information collection and

19  education.--

20         (4)(a)  Members of the health care community who seek

21  antitrust guidance may request a review of their proposed

22  business activity by the Attorney General's office.  In

23  conducting its review, the Attorney General's office may seek

24  whatever documentation, data, or other material it deems

25  necessary from the Agency for Health Care Administration, the

26  State Center for Health Statistics, and the Office of

27  Insurance Regulation of the Financial Services Commission

28  Department of Insurance.

29         (9)  When the member of the health care community

30  seeking the no-action letter is regulated by the Office of

31  Insurance Regulation Department of Insurance, the office

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 1  Department of Insurance shall make available to the Attorney

 2  General's office, as needed, any information it maintains in

 3  its regulatory capacity.

 4         Section 436.  Subsection (1) of section 408.50, Florida

 5  Statutes, is amended to read:

 6         408.50  Prospective payment arrangements.--

 7         (1)  Hospitals as defined in s. 395.002, and health

 8  insurers regulated pursuant to parts VI and VII of chapter

 9  627, shall establish prospective payment arrangements that

10  provide hospitals with financial incentives to contain costs.

11  Each hospital shall enter into a rate agreement with each

12  health insurer which represents 10 percent or more of the

13  private-pay patients of the hospital to establish a

14  prospective payment arrangement. Hospitals and health insurers

15  regulated pursuant to this section shall report annually the

16  results of each specific prospective payment arrangement

17  adopted by each hospital and health insurer to the board. The

18  agency shall report a health insurer's failure to comply to

19  the Office of Insurance Regulation of the Financial Services

20  Commission Department of Insurance, which shall take into

21  account the failure by the health insurer to comply in

22  conjunction with its approval authority under s. 627.410. The

23  agency shall adopt any rules necessary to carry out its

24  responsibilities required by this section.

25         Section 437.  Section 408.7056, Florida Statutes, is

26  amended to read:

27         408.7056  Statewide Provider and Subscriber Assistance

28  Program.--

29         (1)  As used in this section, the term:

30         (a)  "Agency" means the Agency for Health Care

31  Administration.

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 1         (b)  "Department" means the Department of Insurance.

 2         (b)(c)  "Grievance procedure" means an established set

 3  of rules that specify a process for appeal of an

 4  organizational decision.

 5         (c)(d)  "Health care provider" or "provider" means a

 6  state-licensed or state-authorized facility, a facility

 7  principally supported by a local government or by funds from a

 8  charitable organization that holds a current exemption from

 9  federal income tax under s. 501(c)(3) of the Internal Revenue

10  Code, a licensed practitioner, a county health department

11  established under part I of chapter 154, a prescribed

12  pediatric extended care center defined in s. 400.902, a

13  federally supported primary care program such as a migrant

14  health center or a community health center authorized under s.

15  329 or s. 330 of the United States Public Health Services Act

16  that delivers health care services to individuals, or a

17  community facility that receives funds from the state under

18  the Community Alcohol, Drug Abuse, and Mental Health Services

19  Act and provides mental health services to individuals.

20         (d)(e)  "Managed care entity" means a health

21  maintenance organization or a prepaid health clinic certified

22  under chapter 641, a prepaid health plan authorized under s.

23  409.912, or an exclusive provider organization certified under

24  s. 627.6472.

25         (e)  "Office" means the Office of Insurance Regulation

26  of the Financial Services Commission.

27         (f)  "Panel" means a statewide provider and subscriber

28  assistance panel selected as provided in subsection (11).

29         (2)  The agency shall adopt and implement a program to

30  provide assistance to subscribers and providers, including

31  those whose grievances are not resolved by the managed care

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 1  entity to the satisfaction of the subscriber or provider. The

 2  program shall consist of one or more panels that meet as often

 3  as necessary to timely review, consider, and hear grievances

 4  and recommend to the agency or the office department any

 5  actions that should be taken concerning individual cases heard

 6  by the panel. The panel shall hear every grievance filed by

 7  subscribers and providers on behalf of subscribers, unless the

 8  grievance:

 9         (a)  Relates to a managed care entity's refusal to

10  accept a provider into its network of providers;

11         (b)  Is part of an internal grievance in a Medicare

12  managed care entity or a reconsideration appeal through the

13  Medicare appeals process which does not involve a quality of

14  care issue;

15         (c)  Is related to a health plan not regulated by the

16  state such as an administrative services organization,

17  third-party administrator, or federal employee health benefit

18  program;

19         (d)  Is related to appeals by in-plan suppliers and

20  providers, unless related to quality of care provided by the

21  plan;

22         (e)  Is part of a Medicaid fair hearing pursued under

23  42 C.F.R. ss. 431.220 et seq.;

24         (f)  Is the basis for an action pending in state or

25  federal court;

26         (g)  Is related to an appeal by nonparticipating

27  providers, unless related to the quality of care provided to a

28  subscriber by the managed care entity and the provider is

29  involved in the care provided to the subscriber;

30         (h)  Was filed before the subscriber or provider

31  completed the entire internal grievance procedure of the

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 1  managed care entity, the managed care entity has complied with

 2  its timeframes for completing the internal grievance

 3  procedure, and the circumstances described in subsection (6)

 4  do not apply;

 5         (i)  Has been resolved to the satisfaction of the

 6  subscriber or provider who filed the grievance, unless the

 7  managed care entity's initial action is egregious or may be

 8  indicative of a pattern of inappropriate behavior;

 9         (j)  Is limited to seeking damages for pain and

10  suffering, lost wages, or other incidental expenses, including

11  accrued interest on unpaid balances, court costs, and

12  transportation costs associated with a grievance procedure;

13         (k)  Is limited to issues involving conduct of a health

14  care provider or facility, staff member, or employee of a

15  managed care entity which constitute grounds for disciplinary

16  action by the appropriate professional licensing board and is

17  not indicative of a pattern of inappropriate behavior, and the

18  agency or office department has reported these grievances to

19  the appropriate professional licensing board or to the health

20  facility regulation section of the agency for possible

21  investigation; or

22         (l)  Is withdrawn by the subscriber or provider.

23  Failure of the subscriber or the provider to attend the

24  hearing shall be considered a withdrawal of the grievance.

25         (3)  The agency shall review all grievances within 60

26  days after receipt and make a determination whether the

27  grievance shall be heard.  Once the agency notifies the panel,

28  the subscriber or provider, and the managed care entity that a

29  grievance will be heard by the panel, the panel shall hear the

30  grievance either in the network area or by teleconference no

31  later than 120 days after the date the grievance was filed.

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 1  The agency shall notify the parties, in writing, by facsimile

 2  transmission, or by phone, of the time and place of the

 3  hearing. The panel may take testimony under oath, request

 4  certified copies of documents, and take similar actions to

 5  collect information and documentation that will assist the

 6  panel in making findings of fact and a recommendation. The

 7  panel shall issue a written recommendation, supported by

 8  findings of fact, to the provider or subscriber, to the

 9  managed care entity, and to the agency or the office

10  department no later than 15 working days after hearing the

11  grievance.  If at the hearing the panel requests additional

12  documentation or additional records, the time for issuing a

13  recommendation is tolled until the information or

14  documentation requested has been provided to the panel.  The

15  proceedings of the panel are not subject to chapter 120.

16         (4)  If, upon receiving a proper patient authorization

17  along with a properly filed grievance, the agency requests

18  medical records from a health care provider or managed care

19  entity, the health care provider or managed care entity that

20  has custody of the records has 10 days to provide the records

21  to the agency.  Failure to provide requested medical records

22  may result in the imposition of a fine of up to $500.  Each

23  day that records are not produced is considered a separate

24  violation.

25         (5)  Grievances that the agency determines pose an

26  immediate and serious threat to a subscriber's health must be

27  given priority over other grievances. The panel may meet at

28  the call of the chair to hear the grievances as quickly as

29  possible but no later than 45 days after the date the

30  grievance is filed, unless the panel receives a waiver of the

31  time requirement from the subscriber.  The panel shall issue a

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 1  written recommendation, supported by findings of fact, to the

 2  office department or the agency within 10 days after hearing

 3  the expedited grievance.

 4         (6)  When the agency determines that the life of a

 5  subscriber is in imminent and emergent jeopardy, the chair of

 6  the panel may convene an emergency hearing, within 24 hours

 7  after notification to the managed care entity and to the

 8  subscriber, to hear the grievance.  The grievance must be

 9  heard notwithstanding that the subscriber has not completed

10  the internal grievance procedure of the managed care entity.

11  The panel shall, upon hearing the grievance, issue a written

12  emergency recommendation, supported by findings of fact, to

13  the managed care entity, to the subscriber, and to the agency

14  or the office department for the purpose of deferring the

15  imminent and emergent jeopardy to the subscriber's life.

16  Within 24 hours after receipt of the panel's emergency

17  recommendation, the agency or office department may issue an

18  emergency order to the managed care entity. An emergency order

19  remains in force until:

20         (a)  The grievance has been resolved by the managed

21  care entity;

22         (b)  Medical intervention is no longer necessary; or

23         (c)  The panel has conducted a full hearing under

24  subsection (3) and issued a recommendation to the agency or

25  the office department, and the agency or office department has

26  issued a final order.

27         (7)  After hearing a grievance, the panel shall make a

28  recommendation to the agency or the office department which

29  may include specific actions the managed care entity must take

30  to comply with state laws or rules regulating managed care

31  entities.

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 1         (8)  A managed care entity, subscriber, or provider

 2  that is affected by a panel recommendation may within 10 days

 3  after receipt of the panel's recommendation, or 72 hours after

 4  receipt of a recommendation in an expedited grievance, furnish

 5  to the agency or office department written evidence in

 6  opposition to the recommendation or findings of fact of the

 7  panel.

 8         (9)  No later than 30 days after the issuance of the

 9  panel's recommendation and, for an expedited grievance, no

10  later than 10 days after the issuance of the panel's

11  recommendation, the agency or the office department may adopt

12  the panel's recommendation or findings of fact in a proposed

13  order or an emergency order, as provided in chapter 120, which

14  it shall issue to the managed care entity.  The agency or

15  office department may issue a proposed order or an emergency

16  order, as provided in chapter 120, imposing fines or

17  sanctions, including those contained in ss. 641.25 and 641.52.

18  The agency or the office department may reject all or part of

19  the panel's recommendation. All fines collected under this

20  subsection must be deposited into the Health Care Trust Fund.

21         (10)  In determining any fine or sanction to be

22  imposed, the agency and the office department may consider the

23  following factors:

24         (a)  The severity of the noncompliance, including the

25  probability that death or serious harm to the health or safety

26  of the subscriber will result or has resulted, the severity of

27  the actual or potential harm, and the extent to which

28  provisions of chapter 641 were violated.

29         (b)  Actions taken by the managed care entity to

30  resolve or remedy any quality-of-care grievance.

31  

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 1         (c)  Any previous incidents of noncompliance by the

 2  managed care entity.

 3         (d)  Any other relevant factors the agency or office

 4  department considers appropriate in a particular grievance.

 5         (11)  The panel shall consist of members employed by

 6  the agency, and members employed by the office department, and

 7  members employed by the Department of Financial Services,

 8  chosen by their respective agencies; a consumer appointed by

 9  the Governor; a physician appointed by the Governor, as a

10  standing member; and physicians who have expertise relevant to

11  the case to be heard, on a rotating basis. The agency may

12  contract with a medical director and a primary care physician

13  who shall provide additional technical expertise to the panel.

14  The medical director shall be selected from a health

15  maintenance organization with a current certificate of

16  authority to operate in Florida.

17         (12)  Every managed care entity shall submit a

18  quarterly report to the agency and the office department

19  listing the number and the nature of all subscribers' and

20  providers' grievances which have not been resolved to the

21  satisfaction of the subscriber or provider after the

22  subscriber or provider follows the entire internal grievance

23  procedure of the managed care entity. The agency shall notify

24  all subscribers and providers included in the quarterly

25  reports of their right to file an unresolved grievance with

26  the panel.

27         (13)  Any information which would identify a subscriber

28  or the spouse, relative, or guardian of a subscriber and which

29  is contained in a report obtained by the office Department of

30  Insurance pursuant to this section is confidential and exempt

31  

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 1  from the provisions of s. 119.07(1) and s. 24(a), Art. I of

 2  the State Constitution.

 3         (14)  A proposed order issued by the agency or office

 4  department which only requires the managed care entity to take

 5  a specific action under subsection (7) is subject to a summary

 6  hearing in accordance with s. 120.574, unless all of the

 7  parties agree otherwise. If the managed care entity does not

 8  prevail at the hearing, the managed care entity must pay

 9  reasonable costs and attorney's fees of the agency or the

10  office department incurred in that proceeding.

11         (15)(a)  Any information which would identify a

12  subscriber or the spouse, relative, or guardian of a

13  subscriber which is contained in a document, report, or record

14  prepared or reviewed by the panel or obtained by the agency

15  pursuant to this section is confidential and exempt from the

16  provisions of s. 119.07(1) and s. 24(a), Art. I of the State

17  Constitution.

18         (b)  Meetings of the panel shall be open to the public

19  unless the provider or subscriber whose grievance will be

20  heard requests a closed meeting or the agency or the office

21  Department of Insurance determines that information of a

22  sensitive personal nature which discloses the subscriber's

23  medical treatment or history; or information which constitutes

24  a trade secret as defined by s. 812.081; or information

25  relating to internal risk management programs as defined in s.

26  641.55(5)(c), (6), and (8) may be revealed at the panel

27  meeting, in which case that portion of the meeting during

28  which such sensitive personal information, trade secret

29  information, or internal risk management program information

30  is discussed shall be exempt from the provisions of s. 286.011

31  

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 1  and s. 24(b), Art. I of the State Constitution.  All closed

 2  meetings shall be recorded by a certified court reporter.

 3  

 4  This subsection is subject to the Open Government Sunset

 5  Review Act of 1995 in accordance with s. 119.15, and shall

 6  stand repealed on October 2, 2003, unless reviewed and saved

 7  from repeal through reenactment by the Legislature.

 8         Section 438.  Subsection (1) of section 408.902,

 9  Florida Statutes, is amended to read:

10         408.902  MedAccess program; creation; program title.--

11         (1)  Effective July 1, 1994, there is hereby created

12  the MedAccess program to be administered by the Agency for

13  Health Care Administration.  The MedAccess program shall not

14  be subject to the requirements of the Office of Insurance

15  Regulation of the Financial Services Commission Department of

16  Insurance or chapter 627. The secretary of the agency shall

17  appoint an administrator of the MedAccess program.

18         Section 439.  Paragraph (b) of subsection (2) and

19  subsections (3), (6), and (9) of section 408.909, Florida

20  Statutes, are amended to read:

21         408.909  Health flex plans.--

22         (2)  DEFINITIONS.--As used in this section, the term:

23         (b)  "Office" means the Office of Insurance Regulation

24  of the Financial Services Commission "Department" means the

25  Department of Insurance.

26         (3)  PILOT PROGRAM.--The agency and the office

27  department shall each approve or disapprove health flex plans

28  that provide health care coverage for eligible participants

29  who reside in the three areas of the state that have the

30  highest number of uninsured persons, as identified in the

31  Florida Health Insurance Study conducted by the agency and in

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 1  Indian River County. A health flex plan may limit or exclude

 2  benefits otherwise required by law for insurers offering

 3  coverage in this state, may cap the total amount of claims

 4  paid per year per enrollee, may limit the number of enrollees,

 5  or may take any combination of those actions.

 6         (a)  The agency shall develop guidelines for the review

 7  of applications for health flex plans and shall disapprove or

 8  withdraw approval of plans that do not meet or no longer meet

 9  minimum standards for quality of care and access to care.

10         (b)  The office department shall develop guidelines for

11  the review of health flex plan applications and shall

12  disapprove or shall withdraw approval of plans that:

13         1.  Contain any ambiguous, inconsistent, or misleading

14  provisions or any exceptions or conditions that deceptively

15  affect or limit the benefits purported to be assumed in the

16  general coverage provided by the health flex plan;

17         2.  Provide benefits that are unreasonable in relation

18  to the premium charged or contain provisions that are unfair

19  or inequitable or contrary to the public policy of this state,

20  that encourage misrepresentation, or that result in unfair

21  discrimination in sales practices; or

22         3.  Cannot demonstrate that the health flex plan is

23  financially sound and that the applicant is able to underwrite

24  or finance the health care coverage provided.

25         (c)  The agency and the Financial Services Commission

26  department may adopt rules as needed to administer this

27  section.

28         (6)  RECORDS.--Each health flex plan shall maintain

29  enrollment data and reasonable records of its losses,

30  expenses, and claims experience and shall make those records

31  reasonably available to enable the office department to

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 1  monitor and determine the financial viability of the health

 2  flex plan, as necessary. Provider networks and total

 3  enrollment by area shall be reported to the agency biannually

 4  to enable the agency to monitor access to care.

 5         (9)  PROGRAM EVALUATION.--The agency and the office

 6  department shall evaluate the pilot program and its effect on

 7  the entities that seek approval as health flex plans, on the

 8  number of enrollees, and on the scope of the health care

 9  coverage offered under a health flex plan; shall provide an

10  assessment of the health flex plans and their potential

11  applicability in other settings; and shall, by January 1,

12  2004, jointly submit a report to the Governor, the President

13  of the Senate, and the Speaker of the House of

14  Representatives.

15         Section 440.  Paragraph (f) of subsection (6) and

16  paragraph (a) of subsection (15) of section 409.175, Florida

17  Statutes, are amended to read:

18         409.175  Licensure of family foster homes, residential

19  child-caring agencies, and child-placing agencies.--

20         (6)

21         (f)  All residential child-caring agencies must meet

22  firesafety standards for such agencies adopted by the Division

23  of State Fire Marshal of the Department of Financial Services

24  Insurance and must be inspected annually.  At the request of

25  the department, firesafety inspections shall be conducted by

26  the Division of State Fire Marshal or a local fire department

27  official who has been certified by the division as having

28  completed the training requirements for persons inspecting

29  such agencies.  Inspection reports shall be furnished to the

30  department within 30 days of a request.

31  

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 1         (15)(a)  The Division of Risk Management of the

 2  Department of Financial Services Insurance shall provide

 3  coverage through the Department of Children and Family

 4  Services to any person who owns or operates a family foster

 5  home solely for the Department of Children and Family Services

 6  and who is licensed to provide family foster home care in her

 7  or his place of residence.  The coverage shall be provided

 8  from the general liability account of the State Risk

 9  Management Trust Fund, and the coverage shall be primary.  The

10  coverage is limited to general liability claims arising from

11  the provision of family foster home care pursuant to an

12  agreement with the department and pursuant to guidelines

13  established through policy, rule, or statute. Coverage shall

14  be limited as provided in ss. 284.38 and 284.385, and the

15  exclusions set forth therein, together with other exclusions

16  as may be set forth in the certificate of coverage issued by

17  the trust fund, shall apply. A person covered under the

18  general liability account pursuant to this subsection shall

19  immediately notify the Division of Risk Management of the

20  Department of Financial Services Insurance of any potential or

21  actual claim.

22         Section 441.  Subsection (10) of section 409.25656,

23  Florida Statutes, is amended to read:

24         409.25656  Garnishment.--

25         (10)  The department shall provide notice to the Chief

26  Financial Officer Comptroller, in electronic or other form

27  specified by the Chief Financial Officer Comptroller, listing

28  the obligors for whom warrants are outstanding. Pursuant to

29  subsection (1), the Chief Financial Officer Comptroller shall,

30  upon notice from the department, withhold all payments to any

31  obligor who provides commodities or services to the state,

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 1  leases real property to the state, or constructs a public

 2  building or public work for the state. The department may levy

 3  upon the withheld payments in accordance with subsection (3).

 4  Section 215.422 does not apply from the date the notice is

 5  filed with the Chief Financial Officer Comptroller until the

 6  date the department notifies the Chief Financial Officer

 7  Comptroller of its consent to make payment to the person or 60

 8  days after receipt of the department's notice in accordance

 9  with subsection (1), whichever occurs earlier.

10         Section 442.  Subsections (1), (2), (3), and (4) of

11  section 409.25658, Florida Statutes, are amended to read:

12         409.25658  Use of unclaimed property for past due

13  support.--

14         (1)  In a joint effort to facilitate the collection and

15  payment of past due support, the Department of Revenue, in

16  cooperation with the Department of Financial Services Banking

17  and Finance, shall identify persons owing support collected

18  through a court who are presumed to have unclaimed property

19  held by the Department of Financial Services Banking and

20  Finance.

21         (2)  The department shall periodically provide the

22  Department of Financial Services Banking and Finance with an

23  electronic file of support obligors who owe past due support.

24  The Department of Financial Services Banking and Finance shall

25  conduct a data match of the file against all apparent owners

26  of unclaimed property under chapter 717 and provide the

27  resulting match list to the department.

28         (3)  Upon receipt of the data match list, the

29  department shall provide to the Department of Financial

30  Services Banking and Finance the obligor's last known address.

31  

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 1  The Department of Financial Services Banking and Finance shall

 2  follow the notification procedures under s. 717.118.

 3         (4)  Prior to paying an obligor's approved claim, the

 4  Department of Financial Services Banking and Finance shall

 5  notify the department that such claim has been approved. Upon

 6  confirmation that the Department of Financial Services Banking

 7  and Finance has approved the claim, the department shall

 8  immediately send a notice by certified mail to the obligor,

 9  with a copy to the Department of Financial Services Banking

10  and Finance, advising the obligor of the department's intent

11  to intercept the approved claim up to the amount of the past

12  due support, and informing the obligor of the obligor's right

13  to request a hearing under chapter 120. The Department of

14  Financial Services Banking and Finance shall retain custody of

15  the property until a final order has been entered and any

16  appeals thereon have been concluded. If the obligor fails to

17  request a hearing, the department shall enter a final order

18  instructing the Department of Financial Services Banking and

19  Finance to transfer to the department the property in the

20  amount stated in the final order. Upon such transfer, the

21  Department of Financial Services Banking and Finance shall be

22  released from further liability related to the transferred

23  property.

24         Section 443.  Subsections (4) and (7) of section

25  409.2673, Florida Statutes, are amended to read:

26         409.2673  Shared county and state health care program

27  for low-income persons.--

28         (4)  The levels of financial participation by counties

29  and the state for this program shall be determined as follows:

30         (a)  If on July 1, 1988, a county funded inpatient

31  hospital services for those who would have been eligible for

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 1  the program, the county shall fund 35 percent of the cost of

 2  this program and the state shall provide the remaining 65

 3  percent of the funding required for this program. A county

 4  participating at this level shall use that portion of its

 5  budget that previously would have funded these inpatient

 6  hospital services and that, under this program, has been

 7  offset by state funding for funding other health programs.

 8         (b)  If a county has not reached its maximum ad valorem

 9  millage rate as authorized by law and certified to the

10  Department of Revenue and the county does not currently fund

11  inpatient hospital services for those who would be eligible

12  for this program, the county:

13         1.  Shall provide 35 percent of the cost for this

14  program from within the county's existing budget, and the

15  state shall provide the remaining 65 percent of the funding

16  required for this program; however, under no circumstances

17  will county funding which had been used for funding the county

18  health department under chapter 154 be utilized for funding

19  the county's portion of this program; or

20         2.  Shall levy an additional ad valorem millage to fund

21  the county's portion of this program.  The state shall provide

22  the remaining portion of program funding if:

23         a.  A county levies additional ad valorem millage up to

24  the maximum authorized by law and certified to the Department

25  of Revenue and still does not have sufficient funds to meet

26  its 35 percent of the funding of this program; and

27         b.  A county has exhausted all revenue sources which

28  can statutorily be used as possible funding sources for this

29  program.

30         (c)  A county will be eligible for 100-percent state

31  funding of this program if:

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 1         1.  On July 1, 1988, the county did not fund inpatient

 2  hospital services for those who would have been eligible for

 3  this program;

 4         2.  The county has reached its maximum ad valorem

 5  millage as authorized by law and certified to the Department

 6  of Revenue; and

 7         3.  The county has exhausted all revenue sources which

 8  can statutorily be used as possible funding sources for this

 9  program.

10  

11  Reporting forms specifically designed to capture the

12  information necessary to determine the above levels of

13  participation will be developed as part of the joint

14  rulemaking required for the shared county and state program.

15  For purposes of this program, the counties will be required to

16  report necessary information to the Department of Financial

17  Services Banking and Finance.

18         (7)  A county that participates in the program at any

19  level may not reduce its total per capita expenditures being

20  devoted to health care if any of these funds were previously

21  utilized for the provision of inpatient hospital services to

22  those persons made eligible for the shared county and state

23  program.  It is the intent of the Legislature that, as a

24  result of the shared county and state program, local funds

25  which were previously used for the provision of inpatient

26  hospital services to persons made eligible by the program be

27  used by counties for funding other health care programs which,

28  for purposes of this section, are health expenditures as

29  reported annually to the Department of Financial Services

30  Banking and Finance pursuant to s. 218.32, provided that this

31  subsection does not apply to reductions in county funding

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 1  resulting from the expiration of special sales taxes levied

 2  pursuant to chapter 84-373, Laws of Florida.

 3         Section 444.  Subsection (3) of section 409.8132,

 4  Florida Statutes, is amended to read:

 5         409.8132  Medikids program component.--

 6         (3)  INSURANCE LICENSURE NOT REQUIRED.--The Medikids

 7  program component shall not be subject to the licensing

 8  requirements of the Florida Insurance Code or rules adopted

 9  thereunder of the Department of Insurance.

10         Section 445.  Section 409.817, Florida Statutes, is

11  amended to read:

12         409.817  Approval of health benefits coverage;

13  financial assistance.--In order for health insurance coverage

14  to qualify for premium assistance payments for an eligible

15  child under ss. 409.810-409.820, the health benefits coverage

16  must:

17         (1)  Be certified by the Office of Insurance Regulation

18  of the Financial Services Commission Department of Insurance

19  under s. 409.818 as meeting, exceeding, or being actuarially

20  equivalent to the benchmark benefit plan;

21         (2)  Be guarantee issued;

22         (3)  Be community rated;

23         (4)  Not impose any preexisting condition exclusion for

24  covered benefits; however, group health insurance plans may

25  permit the imposition of a preexisting condition exclusion,

26  but only insofar as it is permitted under s. 627.6561;

27         (5)  Comply with the applicable limitations on premiums

28  and cost-sharing in s. 409.816;

29         (6)  Comply with the quality assurance and access

30  standards developed under s. 409.820; and

31  

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 1         (7)  Establish periodic open enrollment periods, which

 2  may not occur more frequently than quarterly.

 3         Section 446.  Paragraph (c) of subsection (2),

 4  paragraphs (a) and (f) of subsection (3), and subsections (4)

 5  and (6) of section 409.818, Florida Statutes, are amended to

 6  read:

 7         409.818  Administration.--In order to implement ss.

 8  409.810-409.820, the following agencies shall have the

 9  following duties:

10         (2)  The Department of Health shall:

11         (c)  Chair a state-level coordinating council to review

12  and make recommendations concerning the implementation and

13  operation of the program. The coordinating council shall

14  include representatives from the department, the Department of

15  Children and Family Services, the agency, the Florida Healthy

16  Kids Corporation, the Office of Insurance Regulation of the

17  Financial Services Commission Department of Insurance, local

18  government, health insurers, health maintenance organizations,

19  health care providers, families participating in the program,

20  and organizations representing low-income families.

21         (3)  The Agency for Health Care Administration, under

22  the authority granted in s. 409.914(1), shall:

23         (a)  Calculate the premium assistance payment necessary

24  to comply with the premium and cost-sharing limitations

25  specified in s. 409.816. The premium assistance payment for

26  each enrollee in a health insurance plan participating in the

27  Florida Healthy Kids Corporation shall equal the premium

28  approved by the Florida Healthy Kids Corporation and the

29  Office of Insurance Regulation of the Financial Services

30  Commission Department of Insurance pursuant to ss. 627.410 and

31  641.31, less any enrollee's share of the premium established

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 1  within the limitations specified in s. 409.816. The premium

 2  assistance payment for each enrollee in an employer-sponsored

 3  health insurance plan approved under ss. 409.810-409.820 shall

 4  equal the premium for the plan adjusted for any benchmark

 5  benefit plan actuarial equivalent benefit rider approved by

 6  the Office of Insurance Regulation Department of Insurance

 7  pursuant to ss. 627.410 and 641.31, less any enrollee's share

 8  of the premium  established within the limitations specified

 9  in s. 409.816. In calculating the premium assistance payment

10  levels for children with family coverage, the agency shall set

11  the premium assistance payment levels for each child

12  proportionately to the total cost of family coverage.

13         (f)  Approve health benefits coverage for participation

14  in the program, following certification by the Office of

15  Insurance Regulation Department of Insurance under subsection

16  (4).

17  

18  The agency is designated the lead state agency for Title XXI

19  of the Social Security Act for purposes of receipt of federal

20  funds, for reporting purposes, and for ensuring compliance

21  with federal and state regulations and rules.

22         (4)  The Office of Insurance Regulation Department of

23  Insurance shall certify that health benefits coverage plans

24  that seek to provide services under the Florida Kidcare

25  program, except those offered through the Florida Healthy Kids

26  Corporation or the Children's Medical Services network, meet,

27  exceed, or are actuarially equivalent to the benchmark benefit

28  plan and that health insurance plans will be offered at an

29  approved rate. In determining actuarial equivalence of

30  benefits coverage, the Office of Insurance Regulation

31  Department of Insurance and health insurance plans must comply

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 1  with the requirements of s. 2103 of Title XXI of the Social

 2  Security Act. The department shall adopt rules necessary for

 3  certifying health benefits coverage plans.

 4         (6)  The agency, the Department of Health, the

 5  Department of Children and Family Services, the Florida

 6  Healthy Kids Corporation, and the Office of Insurance

 7  Regulation Department of Insurance, after consultation with

 8  and approval of the Speaker of the House of Representatives

 9  and the President of the Senate, are authorized to make

10  program modifications that are necessary to overcome any

11  objections of the United States Department of Health and Human

12  Services to obtain approval of the state's child health

13  insurance plan under Title XXI of the Social Security Act.

14         Section 447.  Subsection (20) of section 409.910,

15  Florida Statutes, is amended to read:

16         409.910  Responsibility for payments on behalf of

17  Medicaid-eligible persons when other parties are liable.--

18         (20)  Entities providing health insurance as defined in

19  s. 624.603, and health maintenance organizations and prepaid

20  health clinics as defined in chapter 641, shall provide such

21  records and information as are necessary to accomplish the

22  purpose of this section, unless such requirement results in an

23  unreasonable burden.

24         (a)  The director of the agency and the director of the

25  Office of Insurance Regulation of the Financial Services

26  Commission Insurance Commissioner shall enter into a

27  cooperative agreement for requesting and obtaining information

28  necessary to effect the purpose and objective of this section.

29         1.  The agency shall request only that information

30  necessary to determine whether health insurance as defined

31  pursuant to s. 624.603, or those health services provided

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 1  pursuant to chapter 641, could be, should be, or have been

 2  claimed and paid with respect to items of medical care and

 3  services furnished to any person eligible for services under

 4  this section.

 5         2.  All information obtained pursuant to subparagraph

 6  1. is confidential and exempt from s. 119.07(1).

 7         3.  The cooperative agreement or rules adopted under

 8  this subsection may include financial arrangements to

 9  reimburse the reporting entities for reasonable costs or a

10  portion thereof incurred in furnishing the requested

11  information. Neither the cooperative agreement nor the rules

12  shall require the automation of manual processes to provide

13  the requested information.

14         (b)  The agency and the Financial Services Commission

15  Department of Insurance jointly shall adopt rules for the

16  development and administration of the cooperative agreement.

17  The rules shall include the following:

18         1.  A method for identifying those entities subject to

19  furnishing information under the cooperative agreement.

20         2.  A method for furnishing requested information.

21         3.  Procedures for requesting exemption from the

22  cooperative agreement based on an unreasonable burden to the

23  reporting entity.

24         Section 448.  Paragraphs (a) and (h) of subsection (3),

25  subsections (5), (15), and (18), and paragraph (a) of

26  subsection (36) of section 409.912, Florida Statutes, as

27  amended by sections 8 and 9 of chapter 2001-377, Laws of

28  Florida, are amended to read:

29         409.912  Cost-effective purchasing of health care.--The

30  agency shall purchase goods and services for Medicaid

31  recipients in the most cost-effective manner consistent with

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 1  the delivery of quality medical care.  The agency shall

 2  maximize the use of prepaid per capita and prepaid aggregate

 3  fixed-sum basis services when appropriate and other

 4  alternative service delivery and reimbursement methodologies,

 5  including competitive bidding pursuant to s. 287.057, designed

 6  to facilitate the cost-effective purchase of a case-managed

 7  continuum of care. The agency shall also require providers to

 8  minimize the exposure of recipients to the need for acute

 9  inpatient, custodial, and other institutional care and the

10  inappropriate or unnecessary use of high-cost services. The

11  agency may establish prior authorization requirements for

12  certain populations of Medicaid beneficiaries, certain drug

13  classes, or particular drugs to prevent fraud, abuse, overuse,

14  and possible dangerous drug interactions. The Pharmaceutical

15  and Therapeutics Committee shall make recommendations to the

16  agency on drugs for which prior authorization is required. The

17  agency shall inform the Pharmaceutical and Therapeutics

18  Committee of its decisions regarding drugs subject to prior

19  authorization.

20         (3)  The agency may contract with:

21         (a)  An entity that provides no prepaid health care

22  services other than Medicaid services under contract with the

23  agency and which is owned and operated by a county, county

24  health department, or county-owned and operated hospital to

25  provide health care services on a prepaid or fixed-sum basis

26  to recipients, which entity may provide such prepaid services

27  either directly or through arrangements with other providers.

28  Such prepaid health care services entities must be licensed

29  under parts I and III by January 1, 1998, and until then are

30  exempt from the provisions of part I of chapter 641. An entity

31  recognized under this paragraph which demonstrates to the

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 1  satisfaction of the Office of Insurance Regulation of the

 2  Financial Services Commission Department of Insurance that it

 3  is backed by the full faith and credit of the county in which

 4  it is located may be exempted from s. 641.225.

 5         (h)  An entity authorized in s. 430.205 to contract

 6  with the agency and the Department of Elderly Affairs to

 7  provide health care and social services on a prepaid or

 8  fixed-sum basis to elderly recipients. Such prepaid health

 9  care services entities are exempt from the provisions of part

10  I of chapter 641 for the first 3 years of operation. An entity

11  recognized under this paragraph that demonstrates to the

12  satisfaction of the Office of Insurance Regulation Department

13  of Insurance that it is backed by the full faith and credit of

14  one or more counties in which it operates may be exempted from

15  s. 641.225.

16         (5)  The agency may contract on a prepaid or fixed-sum

17  basis with any health insurer that:

18         (a)  Pays for health care services provided to enrolled

19  Medicaid recipients in exchange for a premium payment paid by

20  the agency;

21         (b)  Assumes the underwriting risk; and

22         (c)  Is organized and licensed under applicable

23  provisions of the Florida Insurance Code and is currently in

24  good standing with the Office of Insurance Regulation

25  Department of Insurance.

26         (15)  An entity contracting on a prepaid or fixed-sum

27  basis shall, in addition to meeting any applicable statutory

28  surplus requirements, also maintain at all times in the form

29  of cash, investments that mature in less than 180 days

30  allowable as admitted assets by the Office of Insurance

31  Regulation Department of Insurance, and restricted funds or

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 1  deposits controlled by the agency or the Office of Insurance

 2  Regulation Department of Insurance, a surplus amount equal to

 3  one-and-one-half times the entity's monthly Medicaid prepaid

 4  revenues. As used in this subsection, the term "surplus" means

 5  the entity's total assets minus total liabilities. If an

 6  entity's surplus falls below an amount equal to

 7  one-and-one-half times the entity's monthly Medicaid prepaid

 8  revenues, the agency shall prohibit the entity from engaging

 9  in marketing and preenrollment activities, shall cease to

10  process new enrollments, and shall not renew the entity's

11  contract until the required balance is achieved.  The

12  requirements of this subsection do not apply:

13         (a)  Where a public entity agrees to fund any deficit

14  incurred by the contracting entity; or

15         (b)  Where the entity's performance and obligations are

16  guaranteed in writing by a guaranteeing organization which:

17         1.  Has been in operation for at least 5 years and has

18  assets in excess of $50 million; or

19         2.  Submits a written guarantee acceptable to the

20  agency which is irrevocable during the term of the contracting

21  entity's contract with the agency and, upon termination of the

22  contract, until the agency receives proof of satisfaction of

23  all outstanding obligations incurred under the contract.

24         (18)  When a merger or acquisition of a Medicaid

25  prepaid contractor has been approved by the Office of

26  Insurance Regulation Department of Insurance pursuant to s.

27  628.4615, the agency shall approve the assignment or transfer

28  of the appropriate Medicaid prepaid contract upon request of

29  the surviving entity of the merger or acquisition if the

30  contractor and the other entity have been in good standing

31  with the agency for the most recent 12-month period, unless

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 1  the agency determines that the assignment or transfer would be

 2  detrimental to the Medicaid recipients or the Medicaid

 3  program.  To be in good standing, an entity must not have

 4  failed accreditation or committed any material violation of

 5  the requirements of s. 641.52 and must meet the Medicaid

 6  contract requirements.  For purposes of this section, a merger

 7  or acquisition means a change in controlling interest of an

 8  entity, including an asset or stock purchase.

 9         (36)  The Agency for Health Care Administration is

10  directed to issue a request for proposal or intent to

11  negotiate to implement on a demonstration basis an outpatient

12  specialty services pilot project in a rural and urban county

13  in the state.  As used in this subsection, the term

14  "outpatient specialty services" means clinical laboratory,

15  diagnostic imaging, and specified home medical services to

16  include durable medical equipment, prosthetics and orthotics,

17  and infusion therapy.

18         (a)  The entity that is awarded the contract to provide

19  Medicaid managed care outpatient specialty services must, at a

20  minimum, meet the following criteria:

21         1.  The entity must be licensed by the Office of

22  Insurance Regulation Department of Insurance under part II of

23  chapter 641.

24         2.  The entity must be experienced in providing

25  outpatient specialty services.

26         3.  The entity must demonstrate to the satisfaction of

27  the agency that it provides high-quality services to its

28  patients.

29         4.  The entity must demonstrate that it has in place a

30  complaints and grievance process to assist Medicaid recipients

31  

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 1  enrolled in the pilot managed care program to resolve

 2  complaints and grievances.

 3         Section 449.  Subsections (2) and (3) of section

 4  409.9124, Florida Statutes, are amended to read:

 5         409.9124  Managed care reimbursement.--

 6         (2)  The agency shall by rule prescribe those items of

 7  financial information which each managed care plan shall

 8  report to the agency, in the time periods prescribed by rule.

 9  In prescribing items for reporting and definitions of terms,

10  the agency shall consult with the Office of Insurance

11  Regulation of the Financial Services Commission Department of

12  Insurance wherever possible.

13         (3)  The agency shall quarterly examine the financial

14  condition of each managed care plan, and its performance in

15  serving Medicaid patients, and shall utilize examinations

16  performed by the Office of Insurance Regulation Department of

17  Insurance wherever possible.

18         Section 450.  Subsections (5) and (6) of section

19  409.915, Florida Statutes, are amended to read:

20         409.915  County contributions to Medicaid.--Although

21  the state is responsible for the full portion of the state

22  share of the matching funds required for the Medicaid program,

23  in order to acquire a certain portion of these funds, the

24  state shall charge the counties for certain items of care and

25  service as provided in this section.

26         (5)  The Department of Financial Services Banking and

27  Finance shall withhold from the cigarette tax receipts or any

28  other funds to be distributed to the counties the individual

29  county share that has not been remitted within 60 days after

30  billing.

31  

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 1         (6)  In any county in which a special taxing district

 2  or authority is located which will benefit from the medical

 3  assistance programs covered by this section, the board of

 4  county commissioners may divide the county's financial

 5  responsibility for this purpose proportionately, and each such

 6  district or authority must furnish its share to the board of

 7  county commissioners in time for the board to comply with the

 8  provisions of subsection (3). Any appeal of the proration made

 9  by the board of county commissioners must be made to the

10  Department of Financial Services Banking and Finance, which

11  shall then set the proportionate share of each party.

12         Section 451.  Paragraph (c) of subsection (7) of

13  section 411.01, Florida Statutes, is amended to read:

14         411.01  Florida Partnership for School Readiness;

15  school readiness coalitions.--

16         (7)  PARENTAL CHOICE.--

17         (c)  The Office of the Chief Financial Officer

18  Comptroller shall establish an electronic transfer system for

19  the disbursement of funds in accordance with this subsection.

20  School readiness coalitions shall fully implement the

21  electronic funds transfer system within 2 years after plan

22  approval unless a waiver is obtained from the partnership.

23         Section 452.  Subsection (2) of section 413.32, Florida

24  Statutes, is amended to read:

25         413.32  Retention of title to and disposal of

26  equipment.--

27         (2)  The division is authorized to offer for sale any

28  surplus items acquired in the operation of the program when

29  they are no longer necessary or to exchange them for necessary

30  items which may be used to greater advantage. When any such

31  surplus equipment is sold or exchanged a receipt for same

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 1  shall be taken from the purchaser showing the consideration

 2  given for such equipment and forwarded to the Chief Financial

 3  Officer treasurer, and any funds received by the division

 4  pursuant to any such transactions shall be deposited in the

 5  State Treasury in the appropriate federal or state

 6  rehabilitation funds and shall be available for expenditure

 7  for any purpose consistent with this part.

 8         Section 453.  Section 414.27, Florida Statutes, is

 9  amended to read:

10         414.27  Temporary cash assistance; payment on death.--

11         (1)  Upon the death of any person receiving temporary

12  cash assistance through the Department of Children and Family

13  Services, all temporary cash accrued to such person from the

14  date of last payment to the date of death shall be paid to the

15  person who shall have been designated by her or him on a form

16  prescribed by the department and filed with the department

17  during the lifetime of the person making such designation. If

18  no designation is made, or the person so designated is no

19  longer living or cannot be found, then payment shall be made

20  to such person as may be designated by the circuit judge of

21  the county where the recipient of temporary cash assistance

22  resided. Designation by the circuit judge may be made on a

23  form provided by the department or by letter or memorandum to

24  the Chief Financial Officer Comptroller. No filing or

25  recording of the designation shall be required, and the

26  circuit judge shall receive no compensation for such service.

27  If a warrant has not been issued and forwarded prior to notice

28  by the department of the recipient's death, upon notice

29  thereof, the department shall promptly requisition the Chief

30  Financial Officer Comptroller to issue a warrant in the amount

31  of the accrued temporary cash assistance payable to the person

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 1  designated to receive it and shall attach to the requisition

 2  the original designation of the deceased recipient, or if

 3  none, the designation made by the circuit judge, as well as a

 4  notice of death. The Chief Financial Officer Comptroller shall

 5  issue a warrant in the amount payable.

 6         (2)  If a warrant has been issued and not cashed by the

 7  recipient payee prior to her or his death, such warrant shall

 8  be promptly returned to the department, together with notice

 9  of the death of the recipient. The original warrant shall be

10  endorsed on the back by an authorized employee of the

11  department. The endorsement must be on a form prescribed by

12  the department and approved by the Chief Financial Officer

13  Comptroller which must contain the name of the deceased

14  recipient, a statement of the recipient's death, and the date

15  thereof and state that it is payable to the order of the

16  designated beneficiary, without recourse.  The form shall be

17  signed by the authorized employee or employees of the

18  department, and thereupon such warrant shall be payable to the

19  designated beneficiary as fully and completely as if made

20  payable to her or him when issued. The department shall

21  furnish to the Chief Financial Officer Comptroller each month

22  a list of such deceased recipients, the designated

23  beneficiaries or persons to whom such warrants are endorsed,

24  and a description of such warrants as herein provided. The

25  department shall cause all persons receiving temporary cash

26  assistance to make the designations as soon as conveniently

27  may be, and shall preserve such designations in a safe place

28  for use.

29         Section 454.  Subsection (8) of section 414.28, Florida

30  Statutes, is amended to read:

31  

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 1         414.28  Public assistance payments to constitute debt

 2  of recipient.--

 3         (8)  DISPOSITION OF FUNDS RECOVERED.--All funds

 4  collected under this section shall be deposited with the

 5  Department of Financial Services Banking and Finance and a

 6  report of such deposit made to the department. After payment

 7  of costs the sums so collected shall be credited to the

 8  department and used by it.

 9         Section 455.  Section 420.0005, Florida Statutes, is

10  amended to read:

11         420.0005  State Housing Trust Fund; State Housing

12  Fund.--There is hereby established in the State Treasury a

13  separate trust fund to be named the "State Housing Trust

14  Fund." There shall be deposited in the fund all moneys

15  appropriated by the Legislature, or moneys received from any

16  other source, for the purpose of this chapter, and all

17  proceeds derived from the use of such moneys. The fund shall

18  be administered by the Florida Housing Finance Corporation on

19  behalf of the department, as specified in this chapter. Money

20  deposited to the fund and appropriated by the Legislature

21  must, notwithstanding the provisions of chapter 216 or s.

22  420.504(3), be transferred quarterly in advance, to the extent

23  available, or, if not so available, as soon as received into

24  the State Housing Trust Fund, and subject to the provisions of

25  s. 420.5092(6)(a) and (b) by the Chief Financial Officer

26  Comptroller to the corporation upon certification by the

27  Secretary of Community Affairs that the corporation is in

28  compliance with the requirements of s. 420.0006. The

29  certification made by the secretary shall also include the

30  split of funds among programs administered by the corporation

31  and the department as specified in chapter 92-317, Laws of

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 1  Florida, as amended. Moneys advanced by the Chief Financial

 2  Officer Comptroller must be deposited by the corporation into

 3  a separate fund established with a qualified public depository

 4  meeting the requirements of chapter 280 to be named the "State

 5  Housing Fund" and used for the purposes of this chapter.

 6  Administrative and personnel costs incurred in implementing

 7  this chapter may be paid from the State Housing Fund, but such

 8  costs may not exceed 5 percent of the moneys deposited into

 9  such fund. To the State Housing Fund shall be credited all

10  loan repayments, penalties, and other fees and charges

11  accruing to such fund under this chapter.  It is the intent of

12  this chapter that all loan repayments, penalties, and other

13  fees and charges collected be credited in full to the program

14  account from which the loan originated. Moneys in the State

15  Housing Fund which are not currently needed for the purposes

16  of this chapter shall be invested in such manner as is

17  provided for by statute.  The interest received on any such

18  investment shall be credited to the State Housing Fund.

19         Section 456.  Section 420.0006, Florida Statutes, is

20  amended to read:

21         420.0006  Authority to contract with corporation;

22  contract requirements; nonperformance.--The secretary of the

23  department shall contract, notwithstanding the provisions of

24  part I of chapter 287, with the Florida Housing Finance

25  Corporation on a multiyear basis to stimulate, provide, and

26  foster affordable housing in the state. The contract must

27  incorporate the performance measures required by s. 420.511

28  and must be consistent with the provisions of the

29  corporation's strategic plan prepared in accordance with s.

30  420.511 and compatible with s. 216.0166. The contract must

31  provide that, in the event the corporation fails to comply

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 1  with any of the performance measures required by s. 420.511,

 2  the secretary shall notify the Governor and shall refer the

 3  nonperformance to the department's inspector general for

 4  review and determination as to whether such failure is due to

 5  forces beyond the corporation's control or whether such

 6  failure is due to inadequate management of the corporation's

 7  resources. Advances shall continue to be made pursuant to s.

 8  420.0005 during the pendency of the review by the department's

 9  inspector general. If such failure is due to outside forces,

10  it shall not be deemed a violation of the contract. If such

11  failure is due to inadequate management, the department's

12  inspector general shall provide recommendations regarding

13  solutions. The Governor is authorized to resolve any

14  differences of opinion with respect to performance under the

15  contract and may request that advances continue in the event

16  of a failure under the contract due to inadequate management.

17  The Chief Financial Officer Comptroller shall approve the

18  request absent a finding by the Chief Financial Officer

19  Comptroller that continuing such advances would adversely

20  impact the state; however, in any event the Chief Financial

21  Officer Comptroller shall provide advances sufficient to meet

22  the debt service requirements of the corporation and

23  sufficient to fund contracts committing funds from the State

24  Housing Trust Fund so long as such contracts are in accordance

25  with the laws of this state. The department inspector general

26  shall perform for the corporation the functions set forth in

27  s. 20.055 and report to the secretary of the department. The

28  corporation shall be deemed an agency for the purposes of s.

29  20.055.

30         Section 457.  Paragraph (d) of subsection (1) of

31  section 420.101, Florida Statutes, is amended to read:

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 1         420.101  Housing Development Corporation of Florida;

 2  creation, membership, and purposes.--

 3         (1)  Twenty-five or more persons, a majority of whom

 4  shall be residents of this state, who may desire to create a

 5  housing development corporation under the provisions of this

 6  part for the purpose of promoting and developing housing and

 7  advancing the prosperity and economic welfare of the state

 8  and, to that end, to exercise the powers and privileges

 9  hereinafter provided, may be incorporated by filing in the

10  Department of State, as hereinafter provided, articles of

11  incorporation.  The articles of incorporation shall contain:

12         (d)  The names and post office addresses of the members

13  of the first board of directors. The first board of directors

14  shall be elected by and from the stockholders of the

15  corporation and shall consist of 21 members.  However, four

16  five of such members shall consist of the following persons,

17  who shall be nonvoting members: the secretary of the

18  Department of Community Affairs or her or his designee; the

19  head of the Department of Financial Services Banking and

20  Finance or her or his designee; the head of the Department of

21  Insurance or her or his designee; one state senator appointed

22  by the President of the Senate; and one representative

23  appointed by the Speaker of the House of Representatives.

24         Section 458.  Subsection (1) of section 420.123,

25  Florida Statutes, is amended to read:

26         420.123  Stockholders; loan requirement.--

27         (1)  Any financial institution may request membership

28  in the corporation by making application to the board of

29  directors on such form and in such manner as the board of

30  directors may require, and membership shall become effective

31  upon acceptance of the application in the manner designated by

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 1  the board. Each member stockholder of the corporation shall

 2  make loans to the corporation as and when called upon by it to

 3  do so on such terms and other conditions as shall be approved

 4  from time to time by the board of directors, except that the

 5  total amount outstanding on loans to the corporation made by

 6  any member at any one time, when added to the amount of the

 7  investment in the capital stock of the corporation then held

 8  by such member, shall not exceed the following limit, to be

 9  determined as of the time such member becomes a member on the

10  basis of the audited balance sheet of such member at the close

11  of its fiscal year immediately preceding its application for

12  membership or, in the case of an insurance company, its last

13  annual statement to the Office of Insurance Regulation of the

14  Financial Services Commission Department of Insurance: 5

15  percent of the capital and surplus of commercial banks and

16  trust companies; 5 percent of the total outstanding loans made

17  by savings and loan associations and building and loan

18  associations; 5 percent of the capital and unassigned surplus

19  of stock insurance companies, except fire insurance companies;

20  5 percent of the unassigned surplus of mutual insurance

21  companies, except fire insurance companies; 0.2 percent of the

22  assets of fire insurance companies; and such limits as may be

23  approved by the board of directors of the corporation for

24  other financial institutions.

25         Section 459.  Subsection (1) of section 420.131,

26  Florida Statutes, is amended to read:

27         420.131  Articles of incorporation; method of

28  amending.--

29         (1)  The articles of incorporation may be amended by

30  the vote of the stockholders of the corporation, and such

31  amendments shall require approval by the affirmative vote of

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 1  two-thirds of the votes to which the stockholders shall be

 2  entitled.  However, no amendment of the articles of

 3  incorporation which is inconsistent with the general purposes

 4  expressed herein or which eliminates or curtails the right of

 5  the Department of Financial Services Banking and Finance to

 6  examine the corporation or the obligation of the corporation

 7  to make reports as provided in s. 420.141(2) shall be made.

 8         Section 460.  Subsection (2) of section 420.141,

 9  Florida Statutes, is amended to read:

10         420.141  Housing Development Corporation of Florida;

11  deposits and examination.--

12         (2)  The corporation shall be examined at least once

13  annually by the Office of Financial Institutions and

14  Securities Regulation of the Financial Services Commission

15  Department of Banking and Finance and shall make reports of

16  its condition not less than annually to the office said

17  department, and more frequently upon call of the office

18  department, which in turn shall make copies of such reports

19  available to the Office of Insurance Regulation of the

20  Financial Services Commission Department of Insurance and the

21  Governor; and the corporation shall also furnish such other

22  information as may from time to time be required by the Office

23  of Financial Institutions and Securities Regulation Department

24  of Banking and Finance and the Department of State. The Office

25  of Financial Institutions and Securities Regulation Department

26  of Banking and Finance shall exercise the same power and

27  authority over the corporation organized pursuant to this part

28  as is exercised over financial institutions under the

29  provisions of the financial institutions codes, when such

30  codes are not in conflict with this chapter.

31  

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 1         Section 461.  Subsection (6) of section 420.5092,

 2  Florida Statutes, is amended to read:

 3         420.5092  Florida Affordable Housing Guarantee

 4  Program.--

 5         (6)(a)  If the primary revenue sources to be used for

 6  repayment of revenue bonds used to establish the guarantee

 7  fund are insufficient for such repayment, the annual principal

 8  and interest due on each series of revenue bonds shall be

 9  payable from funds in the annual debt service reserve.  The

10  corporation shall, before June 1 of each year, perform a

11  financial audit to determine whether at the end of the state

12  fiscal year there will be on deposit in the guarantee fund an

13  annual debt service reserve from interest earned pursuant to

14  the investment of the guarantee fund, fees, charges, and

15  reimbursements received from issued affordable housing

16  guarantees and other revenue sources available to the

17  corporation. Based upon the findings in such guarantee fund

18  financial audit, the corporation shall certify to the Chief

19  Financial Officer Comptroller the amount of any projected

20  deficiency in the annual debt service reserve for any series

21  of outstanding bonds as of the end of the state fiscal year

22  and the amount necessary to maintain such annual debt service

23  reserve. Upon receipt of such certification, the Chief

24  Financial Officer Comptroller shall transfer to the annual

25  debt service reserve, from the first available taxes

26  distributed to the State Housing Trust Fund pursuant to s.

27  201.15(9)(a) and (10)(a) during the ensuing state fiscal year,

28  the amount certified as necessary to maintain the annual debt

29  service reserve.

30         (b)  If the claims payment obligations under affordable

31  housing guarantees from amounts on deposit in the guarantee

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 1  fund would cause the claims paying rating assigned to the

 2  guarantee fund to be less than the third-highest rating

 3  classification of any nationally recognized rating service,

 4  which classifications being consistent with s. 215.84(3) and

 5  rules adopted thereto by the State Board of Administration,

 6  the corporation shall certify to the Chief Financial Officer

 7  Comptroller the amount of such claims payment obligations.

 8  Upon receipt of such certification, the Chief Financial

 9  Officer Comptroller shall transfer to the guarantee fund, from

10  the first available taxes distributed to the State Housing

11  Trust Fund pursuant to s. 201.15(9)(a) and (10)(a) during the

12  ensuing state fiscal year, the amount certified as necessary

13  to meet such obligations, such transfer to be subordinate to

14  any transfer referenced in paragraph (a) and not to exceed 50

15  percent of the amounts distributed to the State Housing Trust

16  Fund pursuant to s. 201.15(9)(a) and (10)(a) during the

17  preceding state fiscal year.

18         Section 462.  Section 430.42, Florida Statutes, is

19  amended to read:

20         430.42  Department of Elderly Affairs Tobacco

21  Settlement Trust Fund.--

22         (1)  The Department of Elderly Affairs Tobacco

23  Settlement Trust Fund is created within that department. Funds

24  to be credited to the trust fund shall consist of funds

25  disbursed, by nonoperating transfer, from the Department of

26  Financial Services Banking and Finance Tobacco Settlement

27  Clearing Trust Fund in amounts equal to the annual

28  appropriations made from this trust fund.

29         (2)  Notwithstanding the provisions of s. 216.301 and

30  pursuant to s. 216.351, any unencumbered balance in the trust

31  fund at the end of any fiscal year and any encumbered balance

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 1  remaining undisbursed on December 31 of the same calendar year

 2  shall revert to the Department of Financial Services Banking

 3  and Finance Tobacco Settlement Clearing Trust Fund.

 4         Section 463.  Subsection (6) of section 430.703,

 5  Florida Statutes, is amended to read:

 6         430.703  Definitions.--As used in this act, the term:

 7         (6)  "Managed care organization" means an entity that

 8  meets the requirements of the Department of Financial Services

 9  Insurance for operation as a health maintenance organization

10  and meets the qualifications for participation as a managed

11  care organization established by the agency and the

12  department.

13         Section 464.  Section 440.015, Florida Statutes, is

14  amended to read:

15         440.015  Legislative intent.--It is the intent of the

16  Legislature that the Workers' Compensation Law be interpreted

17  so as to assure the quick and efficient delivery of disability

18  and medical benefits to an injured worker and to facilitate

19  the worker's return to gainful reemployment at a reasonable

20  cost to the employer. It is the specific intent of the

21  Legislature that workers' compensation cases shall be decided

22  on their merits. The workers' compensation system in Florida

23  is based on a mutual renunciation of common-law rights and

24  defenses by employers and employees alike. In addition, it is

25  the intent of the Legislature that the facts in a workers'

26  compensation case are not to be interpreted liberally in favor

27  of either the rights of the injured worker or the rights of

28  the employer. Additionally, the Legislature hereby declares

29  that disputes concerning the facts in workers' compensation

30  cases are not to be given a broad liberal construction in

31  favor of the employee on the one hand or of the employer on

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 1  the other hand, and the laws pertaining to workers'

 2  compensation are to be construed in accordance with the basic

 3  principles of statutory construction and not liberally in

 4  favor of either employee or employer. It is the intent of the

 5  Legislature to ensure the prompt delivery of benefits to the

 6  injured worker. Therefore, an efficient and self-executing

 7  system must be created which is not an economic or

 8  administrative burden. The department, agency, the Office of

 9  Insurance Regulation, the Department of Education, and the

10  Division of Administrative Hearings shall administer the

11  Workers' Compensation Law in a manner which facilitates the

12  self-execution of the system and the process of ensuring a

13  prompt and cost-effective delivery of payments.

14         Section 465.  Subsections (12) and (14) of section

15  440.02, Florida Statutes, are amended, and subsection (43) is

16  added to that section, to read:

17         440.02  Definitions.--When used in this chapter, unless

18  the context clearly requires otherwise, the following terms

19  shall have the following meanings:

20         (12)  "Department" means the Department of Financial

21  Services; the term does not include the Financial Services

22  Commission or any office of the commission Insurance.

23         (14)  "Division" means the Division of Workers'

24  Compensation of the Department of Financial Services

25  Insurance.

26         (43)  "Office of Insurance Regulation" means the Office

27  of Insurance Regulation of the Financial Services Commission.

28         Section 466.  Subsections (6), (10), (11), (12), and

29  (13) of section 440.05, Florida Statutes, are amended to read:

30         440.05  Election of exemption; revocation of election;

31  notice; certification.--

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 1         (6)  A construction industry certificate of election to

 2  be exempt which is issued in accordance with this section

 3  shall be valid for 2 years after the effective date stated

 4  thereon. Both the effective date and the expiration date must

 5  be listed on the face of the certificate by the department.

 6  The construction industry certificate must expire at midnight,

 7  2 years from its issue date, as noted on the face of the

 8  exemption certificate. Any person who has received from the

 9  department division a construction industry certificate of

10  election to be exempt which is in effect on December 31, 1998,

11  shall file a new notice of election to be exempt by the last

12  day in his or her birth month following December 1, 1998. A

13  construction industry certificate of election to be exempt may

14  be revoked before its expiration by the sole proprietor,

15  partner, or officer for whom it was issued or by the

16  department for the reasons stated in this section.  At least

17  60 days prior to the expiration date of a construction

18  industry certificate of exemption issued after December 1,

19  1998, the department shall send notice of the expiration date

20  and an application for renewal to the certificateholder at the

21  address on the certificate.

22         (10)  Each sole proprietor, partner, or officer of a

23  corporation who is actively engaged in the construction

24  industry and who elects an exemption from this chapter shall

25  maintain business records as specified by the department

26  division by rule, which rules must include the provision that

27  any corporation with exempt officers and any partnership

28  actively engaged in the construction industry with exempt

29  partners must maintain written statements of those exempted

30  persons affirmatively acknowledging each such individual's

31  exempt status.

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 1         (11)  Any sole proprietor or partner actively engaged

 2  in the construction industry claiming an exemption under this

 3  section shall maintain a copy of his or her federal income tax

 4  records for each of the immediately previous 3 years in which

 5  he or she claims an exemption. Such federal income tax records

 6  must include a complete copy of the following for each year in

 7  which an exemption is claimed:

 8         (a)  For sole proprietors, a copy of Federal Income Tax

 9  Form 1040 and its accompanying Schedule C;

10         (b)  For partners, a copy of the partner's Federal

11  Income Tax Schedule K-1 (Form 1065) and Federal Income Tax

12  Form 1040 and its accompanying Schedule E.

13  

14  A sole proprietor or partner shall produce, upon request by

15  the department division, a copy of those documents together

16  with a statement by the sole proprietor or partner that the

17  tax records provided are true and accurate copies of what the

18  sole proprietor or partner has filed with the federal Internal

19  Revenue Service. The statement must be signed under oath by

20  the sole proprietor or partner and must be notarized. The

21  department division shall issue a stop-work order under s.

22  440.107(5) to any sole proprietor or partner who fails or

23  refuses to produce a copy of the tax records and affidavit

24  required under this paragraph to the department division

25  within 3 business days after the request is made.

26         (12)  For those sole proprietors or partners that have

27  not been in business long enough to provide the information

28  required of an established business, the department division

29  shall require such sole proprietor or partner to provide

30  copies of the most recently filed Federal Income Tax Form

31  1040. The department division shall establish by rule such

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 1  other criteria to show that the sole proprietor or partner

 2  intends to engage in a legitimate enterprise within the

 3  construction industry and is not otherwise attempting to evade

 4  the requirements of this section. The department division

 5  shall establish by rule the form and format of financial

 6  information required to be submitted by such employers.

 7         (13)  Any corporate officer claiming an exemption under

 8  this section must be listed on the records of this state's

 9  Secretary of State, Division of Corporations, as a corporate

10  officer. If the person who claims an exemption as a corporate

11  officer is not so listed on the records of the Secretary of

12  State, the individual must provide to the department division,

13  upon request by the department division, a notarized affidavit

14  stating that the individual is a bona fide officer of the

15  corporation and stating the date his or her appointment or

16  election as a corporate officer became or will become

17  effective. The statement must be signed under oath by both the

18  officer and the president or chief operating officer of the

19  corporation and must be notarized. The department division

20  shall issue a stop-work order under s. 440.107(1) to any

21  corporation who employs a person who claims to be exempt as a

22  corporate officer but who fails or refuses to produce the

23  documents required under this subsection to the department

24  division within 3 business days after the request is made.

25         Section 467.  Subsection (5) of section 440.09, Florida

26  Statutes, is amended to read:

27         440.09  Coverage.--

28         (5)  If injury is caused by the knowing refusal of the

29  employee to use a safety appliance or observe a safety rule

30  required by statute or lawfully adopted by the department

31  division, and brought prior to the accident to the employee's

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 1  knowledge, or if injury is caused by the knowing refusal of

 2  the employee to use a safety appliance provided by the

 3  employer, the compensation as provided in this chapter shall

 4  be reduced 25 percent.

 5         Section 468.  Paragraph (f) of subsection (1) of

 6  section 440.10, Florida Statutes, is amended to read:

 7         440.10  Liability for compensation.--

 8         (1)

 9         (f)  If an employer fails to secure compensation as

10  required by this chapter, the department may assess against

11  the employer a penalty not to exceed $5,000 for each employee

12  of that employer who is classified by the employer as an

13  independent contractor but who is found by the department to

14  not meet the criteria for an independent contractor that are

15  set forth in s. 440.02. The department division shall adopt

16  rules to administer the provisions of this paragraph.

17         Section 469.  Section 440.1025, Florida Statutes, is

18  amended to read:

19         440.1025  Consideration of public employer workplace

20  safety program in rate-setting; program requirements;

21  rulemaking.--For a public employer to be eligible for receipt

22  of specific identifiable consideration under s. 627.0915 for a

23  workplace safety program in the setting of rates, the public

24  employer must have a workplace safety program. At a minimum,

25  the program must include a written safety policy and safety

26  rules, and make provision for safety inspections, preventative

27  maintenance, safety training, first-aid, accident

28  investigation, and necessary recordkeeping. For purposes of

29  this section, "public employer" means any agency within state,

30  county, or municipal government employing individuals for

31  salary, wages, or other remuneration. The department division

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 1  may adopt promulgate rules for insurers to utilize in

 2  determining public employer compliance with the requirements

 3  of this section.

 4         Section 470.  Section 440.103, Florida Statutes, is

 5  amended to read:

 6         440.103  Building permits; identification of minimum

 7  premium policy.--Except as otherwise provided in this chapter,

 8  every employer shall, as a condition to receiving a building

 9  permit, show proof that it has secured compensation for its

10  employees under this chapter as provided in ss. 440.10 and

11  440.38. Such proof of compensation must be evidenced by a

12  certificate of coverage issued by the carrier, a valid

13  exemption certificate approved by the department or the former

14  Division of Workers' Compensation of the Department of Labor

15  and Employment Security, or a copy of the employer's authority

16  to self-insure and shall be presented each time the employer

17  applies for a building permit. As provided in s. 627.413(5),

18  each certificate of coverage must show, on its face, whether

19  or not coverage is secured under the minimum premium

20  provisions of rules adopted by rating organizations licensed

21  pursuant to s. 627.221 by the department. The words "minimum

22  premium policy" or equivalent language shall be typed,

23  printed, stamped, or legibly handwritten.

24         Section 471.  Paragraph (a) of subsection (3) of

25  section 440.105, Florida Statutes, is amended to read:

26         440.105  Prohibited activities; reports; penalties;

27  limitations.--

28         (3)  Whoever violates any provision of this subsection

29  commits a misdemeanor of the first degree, punishable as

30  provided in s. 775.082 or s. 775.083.

31  

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 1         (a)  It shall be unlawful for any employer to knowingly

 2  fail to update applications for coverage as required by s.

 3  440.381(1) and the Financial Services Commission Department of

 4  Insurance rules, or to post notice of coverage pursuant to s.

 5  440.40.

 6         Section 472.  Subsections (1) and (2) of section

 7  440.1051, Florida Statutes, are amended to read:

 8         440.1051  Fraud reports; civil immunity; criminal

 9  penalties.--

10         (1)  The Bureau of Workers' Compensation Insurance

11  Fraud of the Division of Insurance Fraud of the department of

12  Insurance shall establish a toll-free telephone number to

13  receive reports of workers' compensation fraud committed by an

14  employee, employer, insurance provider, physician, attorney,

15  or other person.

16         (2)  Any person who reports workers' compensation fraud

17  to the Division of Insurance Fraud under subsection (1) is

18  immune from civil liability for doing so, and the person or

19  entity alleged to have committed the fraud may not retaliate

20  against him or her for providing such report, unless the

21  person making the report knows it to be false.

22         Section 473.  Subsections (3) and (4) of section

23  440.106, Florida Statutes, are amended to read:

24         440.106  Civil remedies; administrative penalties.--

25         (3)  Whenever any group or individual self-insurer,

26  carrier, rating bureau, or agent or other representative of

27  any carrier or rating bureau is determined to have violated s.

28  440.105, the agency responsible for licensure or certification

29  department may revoke or suspend the authority or

30  certification of the any group or individual self-insurer,

31  carrier, agent, or broker.

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 1         (4)  The department or the Office of Insurance

 2  Regulation shall report any contractor determined in violation

 3  of requirements of this chapter to the appropriate state

 4  licensing board for disciplinary action.

 5         Section 474.  Subsections (5), (7), and (12) of section

 6  440.107, Florida Statutes, are amended to read:

 7         440.107  Department powers to enforce employer

 8  compliance with coverage requirements.--

 9         (5)  Whenever the department determines that an

10  employer who is required to secure the payment to his or her

11  employees of the compensation provided for by this chapter has

12  failed to do so, such failure shall be deemed an immediate

13  serious danger to public health, safety, or welfare sufficient

14  to justify service by the department of a stop-work order on

15  the employer, requiring the cessation of all business

16  operations at the place of employment or job site. If the

17  department division makes such a determination, the department

18  division shall issue a stop-work order within 72 hours. The

19  order shall take effect upon the date of service upon the

20  employer, unless the employer provides evidence satisfactory

21  to the department of having secured any necessary insurance or

22  self-insurance and pays a civil penalty to the department, to

23  be deposited by the department into the Workers' Compensation

24  Administration Trust Fund, in the amount of $100 per day for

25  each day the employer was not in compliance with this chapter.

26         (7)  In addition to any penalty, stop-work order, or

27  injunction, the department shall assess against any employer,

28  who has failed to secure the payment of compensation as

29  required by this chapter, a penalty in the following amount:

30         (a)  An amount equal to at least the amount that the

31  employer would have paid or up to twice the amount the

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 1  employer would have paid during periods it illegally failed to

 2  secure payment of compensation in the preceding 3-year period

 3  based on the employer's payroll during the preceding 3-year

 4  period; or

 5         (b)  One thousand dollars, whichever is greater.

 6  

 7  Any penalty assessed under this subsection is due within 30

 8  days after the date on which the employer is notified, except

 9  that, if the department has posted a stop-work order or

10  obtained injunctive relief against the employer, payment is

11  due, in addition to those conditions set forth in this

12  section, as a condition to relief from a stop-work order or an

13  injunction. Interest shall accrue on amounts not paid when due

14  at the rate of 1 percent per month. The department division

15  shall adopt rules to administer this section.

16         (12)  If the department division finds that an employer

17  who is certified or registered under part I or part II of

18  chapter 489 and who is required to secure payment of the

19  compensation provided for by this chapter to his or her

20  employees has failed to do so, the department division shall

21  immediately notify the Department of Business and Professional

22  Regulation.

23         Section 475.  Subsections (11) and (12) of section

24  440.13, Florida Statutes, are amended to read:

25         440.13  Medical services and supplies; penalty for

26  violations; limitations.--

27         (11)  AUDITS BY AGENCY FOR HEALTH CARE ADMINISTRATION

28  AND THE DEPARTMENT OF INSURANCE; JURISDICTION.--

29         (a)  The Agency for Health Care Administration may

30  investigate health care providers to determine whether

31  providers are complying with this chapter and with rules

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 1  adopted by the agency, whether the providers are engaging in

 2  overutilization, and whether providers are engaging in

 3  improper billing practices. If the agency finds that a health

 4  care provider has improperly billed, overutilized, or failed

 5  to comply with agency rules or the requirements of this

 6  chapter it must notify the provider of its findings and may

 7  determine that the health care provider may not receive

 8  payment from the carrier or may impose penalties as set forth

 9  in subsection (8) or other sections of this chapter. If the

10  health care provider has received payment from a carrier for

11  services that were improperly billed or for overutilization,

12  it must return those payments to the carrier. The agency may

13  assess a penalty not to exceed $500 for each overpayment that

14  is not refunded within 30 days after notification of

15  overpayment by the agency or carrier.

16         (b)  The department shall monitor carriers as provided

17  in this chapter and the Office of Insurance Regulation shall

18  and audit insurers and group self-insurance funds carriers as

19  provided in s. 624.3161, to determine if medical bills are

20  paid in accordance with this section and department rules of

21  the department and Financial Services Commission,

22  respectively. Any employer, if self-insured, or carrier found

23  by the department or Office of Insurance Regulation division

24  not to be within 90 percent compliance as to the payment of

25  medical bills after July 1, 1994, must be assessed a fine not

26  to exceed 1 percent of the prior year's assessment levied

27  against such entity under s. 440.51 for every quarter in which

28  the entity fails to attain 90-percent compliance. The

29  department shall fine or otherwise discipline an employer or

30  carrier, pursuant to this chapter, the insurance code, or

31  rules adopted by the department, and the Office of Insurance

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 1  Regulation shall fine or otherwise discipline an insurer or

 2  group self-insurance fund pursuant to the insurance code or

 3  rules adopted by the Financial Services Commission, for each

 4  late payment of compensation that is below the minimum

 5  90-percent performance standard. Any carrier that is found to

 6  be not in compliance in subsequent consecutive quarters must

 7  implement a medical-bill review program approved by the

 8  department or office division, and an insurer or group

 9  self-insurance fund the carrier is subject to disciplinary

10  action by the Office of Insurance Regulation Department of

11  Insurance.

12         (c)  The agency has exclusive jurisdiction to decide

13  any matters concerning reimbursement, to resolve any

14  overutilization dispute under subsection (7), and to decide

15  any question concerning overutilization under subsection (8),

16  which question or dispute arises after January 1, 1994.

17         (d)  The following agency actions do not constitute

18  agency action subject to review under ss. 120.569 and 120.57

19  and do not constitute actions subject to s. 120.56: referral

20  by the entity responsible for utilization review; a decision

21  by the agency to refer a matter to a peer review committee;

22  establishment by a health care provider or entity of

23  procedures by which a peer review committee reviews the

24  rendering of health care services; and the review proceedings,

25  report, and recommendation of the peer review committee.

26         (12)  CREATION OF THREE-MEMBER PANEL; GUIDES OF MAXIMUM

27  REIMBURSEMENT ALLOWANCES.--

28         (a)  A three-member panel is created, consisting of the

29  Chief Financial Officer Insurance Commissioner, or the Chief

30  Financial Officer's Insurance Commissioner's designee, and two

31  members to be appointed by the Governor, subject to

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 1  confirmation by the Senate, one member who, on account of

 2  present or previous vocation, employment, or affiliation,

 3  shall be classified as a representative of employers, the

 4  other member who, on account of previous vocation, employment,

 5  or affiliation, shall be classified as a representative of

 6  employees. The panel shall determine statewide schedules of

 7  maximum reimbursement allowances for medically necessary

 8  treatment, care, and attendance provided by physicians,

 9  hospitals, ambulatory surgical centers, work-hardening

10  programs, pain programs, and durable medical equipment. The

11  maximum reimbursement allowances for inpatient hospital care

12  shall be based on a schedule of per diem rates, to be approved

13  by the three-member panel no later than March 1, 1994, to be

14  used in conjunction with a precertification manual as

15  determined by the agency. All compensable charges for hospital

16  outpatient care shall be reimbursed at 75 percent of usual and

17  customary charges. Until the three-member panel approves a

18  schedule of per diem rates for inpatient hospital care and it

19  becomes effective, all compensable charges for hospital

20  inpatient care must be reimbursed at 75 percent of their usual

21  and customary charges. Annually, the three-member panel shall

22  adopt schedules of maximum reimbursement allowances for

23  physicians, hospital inpatient care, hospital outpatient care,

24  ambulatory surgical centers, work-hardening programs, and pain

25  programs. However, the maximum percentage of increase in the

26  individual reimbursement allowance may not exceed the

27  percentage of increase in the Consumer Price Index for the

28  previous year. An individual physician, hospital, ambulatory

29  surgical center, pain program, or work-hardening program shall

30  be reimbursed either the usual and customary charge for

31  treatment, care, and attendance, the agreed-upon contract

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 1  price, or the maximum reimbursement allowance in the

 2  appropriate schedule, whichever is less.

 3         (b)  As to reimbursement for a prescription medication,

 4  the reimbursement amount for a prescription shall be the

 5  average wholesale price times 1.2 plus $4.18 for the

 6  dispensing fee, except where the carrier has contracted for a

 7  lower amount. Fees for pharmaceuticals and pharmaceutical

 8  services shall be reimbursable at the applicable fee schedule

 9  amount. Where the employer or carrier has contracted for such

10  services and the employee elects to obtain them through a

11  provider not a party to the contract, the carrier shall

12  reimburse at the schedule, negotiated, or contract price,

13  whichever is lower.

14         (c)  Reimbursement for all fees and other charges for

15  such treatment, care, and attendance, including treatment,

16  care, and attendance provided by any hospital or other health

17  care provider, ambulatory surgical center, work-hardening

18  program, or pain program, must not exceed the amounts provided

19  by the uniform schedule of maximum reimbursement allowances as

20  determined by the panel or as otherwise provided in this

21  section. This subsection also applies to independent medical

22  examinations performed by health care providers under this

23  chapter. Until the three-member panel approves a uniform

24  schedule of maximum reimbursement allowances and it becomes

25  effective, all compensable charges for treatment, care, and

26  attendance provided by physicians, ambulatory surgical

27  centers, work-hardening programs, or pain programs shall be

28  reimbursed at the lowest maximum reimbursement allowance

29  across all 1992 schedules of maximum reimbursement allowances

30  for the services provided regardless of the place of service.

31  In determining the uniform schedule, the panel shall first

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 1  approve the data which it finds representative of prevailing

 2  charges in the state for similar treatment, care, and

 3  attendance of injured persons. Each health care provider,

 4  health care facility, ambulatory surgical center,

 5  work-hardening program, or pain program receiving workers'

 6  compensation payments shall maintain records verifying their

 7  usual charges. In establishing the uniform schedule of maximum

 8  reimbursement allowances, the panel must consider:

 9         1.  The levels of reimbursement for similar treatment,

10  care, and attendance made by other health care programs or

11  third-party providers;

12         2.  The impact upon cost to employers for providing a

13  level of reimbursement for treatment, care, and attendance

14  which will ensure the availability of treatment, care, and

15  attendance required by injured workers;

16         3.  The financial impact of the reimbursement

17  allowances upon health care providers and health care

18  facilities, including trauma centers as defined in s.

19  395.4001, and its effect upon their ability to make available

20  to injured workers such medically necessary remedial

21  treatment, care, and attendance. The uniform schedule of

22  maximum reimbursement allowances must be reasonable, must

23  promote health care cost containment and efficiency with

24  respect to the workers' compensation health care delivery

25  system, and must be sufficient to ensure availability of such

26  medically necessary remedial treatment, care, and attendance

27  to injured workers; and

28         4.  The most recent average maximum allowable rate of

29  increase for hospitals determined by the Health Care Board

30  under chapter 408.

31  

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 1         (d)  In addition to establishing the uniform schedule

 2  of maximum reimbursement allowances, the panel shall:

 3         1.  Take testimony, receive records, and collect data

 4  to evaluate the adequacy of the workers' compensation fee

 5  schedule, nationally recognized fee schedules and alternative

 6  methods of reimbursement to certified health care providers

 7  and health care facilities for inpatient and outpatient

 8  treatment and care.

 9         2.  Survey certified health care providers and health

10  care facilities to determine the availability and

11  accessibility of workers' compensation health care delivery

12  systems for injured workers.

13         3.  Survey carriers to determine the estimated impact

14  on carrier costs and workers' compensation premium rates by

15  implementing changes to the carrier reimbursement schedule or

16  implementing alternative reimbursement methods.

17         4.  Submit recommendations on or before January 1,

18  2003, and biennially thereafter, to the President of the

19  Senate and the Speaker of the House of Representatives on

20  methods to improve the workers' compensation health care

21  delivery system.

22  

23  The agency and the department, as requested, division shall

24  provide data to the panel, including but not limited to,

25  utilization trends in the workers' compensation health care

26  delivery system. The agency division shall provide the panel

27  with an annual report regarding the resolution of medical

28  reimbursement disputes and any actions pursuant to s.

29  440.13(8). The department division shall provide

30  administrative support and service to the panel to the extent

31  requested by the panel.

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 1         Section 476.  Subsections (21), (23), and (24) of

 2  section 440.134, Florida Statutes, are amended to read:

 3         440.134  Workers' compensation managed care

 4  arrangement.--

 5         (21)  Upon expiration of the suspension period, the

 6  insurer's authorization shall automatically be reinstated

 7  unless the agency finds that the causes of the suspension have

 8  not been rectified or that the insurer is otherwise not in

 9  compliance with the requirements of this chapter part. If not

10  so automatically reinstated, the authorization shall be deemed

11  to have expired as of the end of the suspension period.

12         (23)  The agency shall immediately notify the office

13  department whenever it issues an administrative complaint or

14  an order or otherwise initiates legal proceedings resulting

15  in, or which may result in, suspension or revocation of an

16  insurer's authorization.

17         (24)  Nothing in this chapter part shall be deemed to

18  authorize any entity to transact any insurance business,

19  assume risk, or otherwise engage in any other type of

20  insurance unless it is authorized as an insurer or a health

21  maintenance organization under a certificate of authority

22  issued by the Department of Insurance under the provisions of

23  the Florida Insurance Code.

24         Section 477.  Paragraph (b) of subsection (5) of

25  section 440.14, Florida Statutes, is amended to read:

26         440.14  Determination of pay.--

27         (5)

28         (b)  The employee waives any entitlement to interest,

29  penalties, and attorney's fees during the period in which the

30  employee has not provided information concerning the loss of

31  earnings from concurrent employment. Carriers are not subject

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 1  to penalties by the division under s. 440.20(8)(b) and (c) for

 2  unpaid compensation related to concurrent employment during

 3  the period in which the employee has not provided information

 4  concerning the loss of earnings from concurrent employment.

 5         Section 478.  Section 440.17, Florida Statutes, is

 6  amended to read:

 7         440.17  Guardian for minor or incompetent.--Prior to

 8  the filing of a claim, the department division, and after the

 9  filing of a claim, a judge of compensation claims, may require

10  the appointment by a court of competent jurisdiction, for any

11  person who is mentally incompetent or a minor, of a guardian

12  or other representative to receive compensation payable to

13  such person under this chapter and to exercise the powers

14  granted to or to perform the duties required of such person

15  under this chapter; however, the judge of compensation claims,

16  in the judge of compensation claims' discretion, may designate

17  in the compensation award a person to whom payment of

18  compensation may be paid for a minor or incompetent, in which

19  event payment to such designated person shall discharge all

20  liability for such compensation.

21         Section 479.  Paragraph (c) of subsection (8) and

22  subsections (10), (15), (16), and (17) of section 440.20,

23  Florida Statutes, are amended to read:

24         440.20  Time for payment of compensation; penalties for

25  late payment.--

26         (8)  In addition to any other penalties provided by

27  this chapter for late payment, if any installment of

28  compensation is not paid when it becomes due, the employer,

29  carrier, or servicing agent shall pay interest thereon at the

30  rate of 12 percent per year from the date the installment

31  becomes due until it is paid, whether such installment is

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 1  payable without an order or under the terms of an order. The

 2  interest payment shall be the greater of the amount of

 3  interest due or $5.

 4         (c)  In order to ensure carrier compliance under this

 5  chapter and provisions of the Florida Insurance Code, the

 6  office department shall monitor the performance of carriers by

 7  conducting market conduct examinations, as provided in s.

 8  624.3161, and conducting investigations, as provided in s.

 9  624.317. The department shall establish by rule minimum

10  performance standards for carriers to ensure that a minimum of

11  90 percent of all compensation benefits are timely paid. The

12  department shall fine a carrier as provided in s.

13  440.13(11)(b) up to $50 for each late payment of compensation

14  that is below the minimum 90 percent performance standard.

15  This paragraph does not affect the imposition of any penalties

16  or interest due to the claimant. If a carrier contracts with a

17  servicing agent to fulfill its administrative responsibilities

18  under this chapter, the payment practices of the servicing

19  agent are deemed the payment practices of the carrier for the

20  purpose of assessing penalties against the carrier.

21         (10)  Whenever the department deems it advisable, it

22  may require any employer to make a deposit with the Chief

23  Financial Officer Treasurer to secure the prompt and

24  convenient payments of such compensation; and payments

25  therefrom upon any awards shall be made upon order of the

26  department or judge of compensation claims.

27         (15)(a)  The office department shall examine on an

28  ongoing basis claims files in accordance with s. 624.3161 and

29  may impose fines pursuant to s. 624.310(5) and this chapter in

30  order to identify questionable claims-handling techniques,

31  questionable patterns or practices of claims, or a pattern of

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 1  repeated unreasonably controverted claims by carriers, as

 2  defined in s. 440.02, providing services to employees pursuant

 3  to this chapter. If the office department finds such

 4  questionable techniques, patterns, or repeated unreasonably

 5  controverted claims as constitute a general business practice

 6  of a carrier, as defined in s. 440.02, the office department

 7  shall take appropriate action so as to bring such general

 8  business practices to a halt pursuant to s. 440.38(3) or may

 9  impose penalties pursuant to s. 624.4211. The department and

10  office may initiate investigations of questionable techniques,

11  patterns, practices, or repeated unreasonably controverted

12  claims. The Financial Services Commission department may by

13  rule establish forms and procedures for corrective action

14  plans and for auditing carriers.

15         (b)  As to any examination, investigation, or hearing

16  being conducted under this chapter, the department and office

17  Insurance Commissioner or his or her designee:

18         1.  May administer oaths, examine and cross-examine

19  witnesses, receive oral and documentary evidence; and

20         2.  Shall have the power to subpoena witnesses, compel

21  their attendance and testimony, and require by subpoena the

22  production of books, papers, records, files, correspondence,

23  documents, or other evidence which is relevant to the inquiry.

24         (c)  If any person refuses to comply with any such

25  subpoena or to testify as to any matter concerning which she

26  or he may be lawfully interrogated, the Circuit Court of Leon

27  County or of the county wherein such examination,

28  investigation, or hearing is being conducted, or of the county

29  wherein such person resides, may, on the application of the

30  department or the office, issue an order requiring such person

31  to comply with the subpoena and to testify.

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 1         (d)  Subpoenas shall be served, and proof of such

 2  service made, in the same manner as if issued by a circuit

 3  court. Witness fees, costs, and reasonable travel expenses, if

 4  claimed, shall be allowed the same as for testimony in a

 5  circuit court.

 6         (e)  The department shall publish annually a report

 7  which indicates the promptness of first payment of

 8  compensation records of each carrier or self-insurer so as to

 9  focus attention on those carriers or self-insurers with poor

10  payment records for the preceding year. The department and the

11  office shall take appropriate steps so as to cause such poor

12  carrier payment practices to halt pursuant to s. 440.38(3). In

13  addition, the department shall take appropriate action so as

14  to halt such poor payment practices of self-insurers. "Poor

15  payment practice" means a practice of late payment sufficient

16  to constitute a general business practice.

17         (f)  The Financial Services Commission, in consultation

18  with the department, shall adopt promulgate rules providing

19  guidelines to carriers, as defined in s. 440.02,

20  self-insurers, and employers to indicate behavior that may be

21  construed as questionable claims-handling techniques,

22  questionable patterns of claims, repeated unreasonably

23  controverted claims, or poor payment practices.

24         (16)  No penalty assessed under this section may be

25  recouped by any carrier or self-insurer in the rate base, the

26  premium, or any rate filing. The office Department of

27  Insurance shall enforce this subsection.

28         (17)  The Financial Services Commission department may

29  by rule establish audit procedures and set standards for the

30  Automated Carrier Performance System.

31  

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 1         Section 480.  Subsections (2) and (3) of section

 2  440.24, Florida Statutes, is amended to read:

 3         440.24  Enforcement of compensation orders;

 4  penalties.--

 5         (2)  In any case where the employer is insured and the

 6  carrier fails to comply with any compensation order of a judge

 7  of compensation claims or court within 10 days after such

 8  order becomes final, the department shall notify the office of

 9  such failure and the office shall thereupon suspend the

10  license of such carrier to do an insurance business in this

11  state, until such carrier has complied with such order.

12         (3)  In any case where the employer is a self-insurer

13  and fails to comply with any compensation order of a judge of

14  compensation claims or court within 10 days after such order

15  becomes final, the department of Insurance may suspend or

16  revoke any authorization previously given to the employer to

17  be a self-insurer, and the Florida Self-Insurers Guaranty

18  Association, Incorporated, may call or sue upon the surety

19  bond or exercise its rights under the letter of credit

20  deposited by the self-insurer with the association as a

21  qualifying security deposit as may be necessary to satisfy the

22  order.

23         Section 481.  Subsections (1), (2), (3), and (4) of

24  section 440.38, Florida Statutes, are amended to read:

25         440.38  Security for compensation; insurance carriers

26  and self-insurers.--

27         (1)  Every employer shall secure the payment of

28  compensation under this chapter:

29         (a)  By insuring and keeping insured the payment of

30  such compensation with any stock company or mutual company or

31  

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 1  association or exchange, authorized to do business in the

 2  state;

 3         (b)  By furnishing satisfactory proof to the Florida

 4  Self-Insurers Guaranty Association, Incorporated, created in

 5  s. 440.385, that it has the financial strength necessary to

 6  ensure timely payment of all current and future claims

 7  individually and on behalf of its subsidiary and affiliated

 8  companies with employees in this state and receiving an

 9  authorization from the department of Insurance to pay such

10  compensation directly. The association shall review the

11  financial strength of applicants for membership, current

12  members, and former members and make recommendations to the

13  department of Insurance regarding their qualifications to

14  self-insure in accordance with this section and ss. 440.385

15  and 440.386. The department shall act in accordance with the

16  recommendations unless it finds by clear and convincing

17  evidence that the recommendations are erroneous.

18         1.  As a condition of authorization under paragraph

19  (a), the association may recommend that the department of

20  Insurance require an employer to deposit with the association

21  a qualifying security deposit. The association shall recommend

22  the type and amount of the qualifying security deposit and

23  shall prescribe conditions for the qualifying security

24  deposit, which shall include authorization for the association

25  to call the qualifying security deposit in the case of default

26  to pay compensation awards and related expenses of the

27  association. As a condition to authorization to self-insure,

28  the employer shall provide proof that the employer has

29  provided for competent personnel with whom to deliver benefits

30  and to provide a safe working environment. The employer shall

31  also provide evidence that it carries reinsurance at levels

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 1  that will ensure the financial strength and actuarial

 2  soundness of such employer in accordance with rules adopted by

 3  the department of Insurance. The department of Insurance may

 4  by rule require that, in the event of an individual

 5  self-insurer's insolvency, such qualifying security deposits

 6  and reinsurance policies are payable to the association.  Any

 7  employer securing compensation in accordance with the

 8  provisions of this paragraph shall be known as a self-insurer

 9  and shall be classed as a carrier of her or his own insurance.

10  The employer shall, if requested, provide the association an

11  actuarial report signed by a member of the American Academy of

12  Actuaries providing an opinion of the appropriate present

13  value of the reserves, using a 4-percent discount rate, for

14  current and future compensation claims. If any member or

15  former member of the association refuses to timely provide

16  such a report, the association may obtain an order from a

17  circuit court requiring the member to produce such a report

18  and ordering any other relief that the court determines is

19  appropriate. The association may recover all reasonable costs

20  and attorney's fees in such proceedings.

21         2.  If the employer fails to maintain the foregoing

22  requirements, the association shall recommend to the

23  department of Insurance that the department revoke the

24  employer's authority to self-insure, unless the employer

25  provides to the association the certified opinion of an

26  independent actuary who is a member of the American Academy of

27  Actuaries as to the actuarial present value of the employer's

28  determined and estimated future compensation payments based on

29  cash reserves, using a 4-percent discount rate, and a

30  qualifying security deposit equal to 1.5 times the value so

31  certified. The employer shall thereafter annually provide such

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 1  a certified opinion until such time as the employer meets the

 2  requirements of subparagraph 1. The qualifying security

 3  deposit shall be adjusted at the time of each such annual

 4  report.  Upon the failure of the employer to timely provide

 5  such opinion or to timely provide a security deposit in an

 6  amount equal to 1.5 times the value certified in the latest

 7  opinion, the association shall provide that information to the

 8  department of Insurance along with a recommendation, and the

 9  department of Insurance shall then revoke such employer's

10  authorization to self-insure. Failure to comply with this

11  subparagraph constitutes an immediate serious danger to the

12  public health, safety, or welfare sufficient to justify the

13  summary suspension of the employer's authorization to

14  self-insure pursuant to s. 120.68.

15         3.  Upon the suspension or revocation of the employer's

16  authorization to self-insure, the employer shall provide to

17  the association the certified opinion of an independent

18  actuary who is a member of the American Academy of Actuaries

19  of the actuarial present value of the determined and estimated

20  future compensation payments of the employer for claims

21  incurred while the member exercised the privilege of

22  self-insurance, using a discount rate of 4 percent. The

23  employer shall provide such an opinion at 6-month intervals

24  thereafter until such time as the latest opinion shows no

25  remaining value of claims. With each such opinion, the

26  employer shall deposit with the association a qualifying

27  security deposit in an amount equal to the value certified by

28  the actuary. The association has a cause of action against an

29  employer, and against any successor of the employer, who fails

30  to timely provide such opinion or who fails to timely maintain

31  the required security deposit with the association. The

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 1  association shall recover a judgment in the amount of the

 2  actuarial present value of the determined and estimated future

 3  compensation payments of the employer for claims incurred

 4  while the employer exercised the privilege of self-insurance,

 5  together with attorney's fees.  For purposes of this section,

 6  the successor of an employer means any person, business

 7  entity, or group of persons or business entities, which holds

 8  or acquires legal or beneficial title to the majority of the

 9  assets or the majority of the shares of the employer.

10         4.  A qualifying security deposit shall consist, at the

11  option of the employer, of:

12         a.  Surety bonds, in a form and containing such terms

13  as prescribed by the association, issued by a corporation

14  surety authorized to transact surety business by the

15  department of Insurance, and whose policyholders' and

16  financial ratings, as reported in A.M. Best's Insurance

17  Reports, Property-Liability, are not less than "A" and "V",

18  respectively.

19         b.  Irrevocable letters of credit in favor of the

20  association issued by financial institutions located within

21  this state, the deposits of which are insured through the

22  Federal Deposit Insurance Corporation.

23         5.  The qualifying security deposit shall be held by

24  the association exclusively for the benefit of workers'

25  compensation claimants. The security shall not be subject to

26  assignment, execution, attachment, or any legal process

27  whatsoever, except as necessary to guarantee the payment of

28  compensation under this chapter.  No surety bond may be

29  terminated, and no letter of credit may be allowed to expire,

30  without 90 days' prior written notice to the association and

31  deposit by the self-insuring employer of some other qualifying

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 1  security deposit of equal value within 10 business days after

 2  such notice. Failure to provide such written notice or failure

 3  to timely provide qualifying replacement security after such

 4  notice shall constitute grounds for the association to call or

 5  sue upon the surety bond or to exercise its rights under a

 6  letter of credit. Current self-insured employers must comply

 7  with this section on or before December 31, 2001, or upon the

 8  maturity of existing security deposits, whichever occurs

 9  later. The department of Insurance may specify by rule the

10  amount of the qualifying security deposit required prior to

11  authorizing an employer to self-insure and the amount of net

12  worth required for an employer to qualify for authorization to

13  self-insure;

14         (c)  By entering into a contract with a public utility

15  under an approved utility-provided self-insurance program as

16  set forth in s. 624.46225 in effect as of July 1, 1983.  The

17  department division shall adopt rules to implement this

18  paragraph;

19         (d)  By entering into an interlocal agreement with

20  other local governmental entities to create a local government

21  pool pursuant to s. 624.4622; or

22         (e)  In accordance with s. 440.135, an employer, other

23  than a local government unit, may elect coverage under the

24  Workers' Compensation Law and retain the benefit of the

25  exclusiveness of liability provided in s. 440.11 by obtaining

26  a 24-hour health insurance policy from an authorized property

27  and casualty insurance carrier or an authorized life and

28  health insurance carrier, or by participating in a fully or

29  partially self-insured 24-hour health plan that is established

30  or maintained by or for two or more employers, so long as the

31  law of this state is not preempted by the Employee Retirement

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 1  Income Security Act of 1974, Pub. L. No. 93-406, or any

 2  amendment to that law, which policy or plan must provide, for

 3  at least occupational injuries and illnesses, medical benefits

 4  that are comparable to those required by this chapter. A local

 5  government unit, as a single employer, in accordance with s.

 6  440.135, may participate in the 24-hour health insurance

 7  coverage plan referenced in this paragraph. Disputes and

 8  remedies arising under policies issued under this section are

 9  governed by the terms and conditions of the policies and under

10  the applicable provisions of the Florida Insurance Code and

11  rules adopted under the insurance code and other applicable

12  laws of this state. The 24-hour health insurance policy may

13  provide for health care by a health maintenance organization

14  or a preferred provider organization. The premium for such

15  24-hour health insurance policy shall be paid entirely by the

16  employer. The 24-hour health insurance policy may use

17  deductibles and coinsurance provisions that require the

18  employee to pay a portion of the actual medical care received

19  by the employee. If an employer obtains a 24-hour health

20  insurance policy or self-insured plan to secure payment of

21  compensation as to medical benefits, the employer must also

22  obtain an insurance policy or policies that provide indemnity

23  benefits as follows:

24         1.  If indemnity benefits are provided only for

25  occupational-related disability, such benefits must be

26  comparable to those required by this chapter.

27         2.  If indemnity benefits are provided for both

28  occupational-related and nonoccupational-related disability,

29  such benefits must be comparable to those required by this

30  chapter, except that they must be based on 60 percent of the

31  average weekly wages.

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 1         3.  The employer shall provide for each of its

 2  employees life insurance with a death benefit of $100,000.

 3         4.  Policies providing coverage under this subsection

 4  must use prescribed and acceptable underwriting standards,

 5  forms, and policies approved by the Department of Insurance.

 6  If any insurance policy that provides coverage under this

 7  section is canceled, terminated, or nonrenewed for any reason,

 8  the cancellation, termination, or nonrenewal is ineffective

 9  until the self-insured employer or insurance carrier or

10  carriers notify the division and the Department of Insurance

11  of the cancellation, termination, or nonrenewal, and until the

12  division has actually received the notification. The division

13  must be notified of replacement coverage under a workers'

14  compensation and employer's liability insurance policy or plan

15  by the employer prior to the effective date of the

16  cancellation, termination, or nonrenewal; or

17         (e)(f)  By entering into a contract with an individual

18  self-insurer under an approved individual

19  self-insurer-provided self-insurance program as set forth in

20  s. 624.46225. The department division may adopt rules to

21  administer this subsection.

22         (2)(a)  The department of Insurance shall adopt rules

23  by which businesses may become qualified to provide

24  underwriting claims-adjusting, loss control, and safety

25  engineering services to self-insurers.

26         (b)  The department of Insurance shall adopt rules

27  requiring self-insurers to file any reports necessary to

28  fulfill the requirements of this chapter.  Any self-insurer

29  who fails to file any report as prescribed by the rules

30  adopted by the department of Insurance shall be subject to a

31  civil penalty.

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 1         (3)(a)  The license of any stock company or mutual

 2  company or association or exchange authorized to do insurance

 3  business in the state shall for good cause, upon

 4  recommendation of the department division, be suspended or

 5  revoked by the office Department of Insurance.  No suspension

 6  or revocation shall affect the liability of any carrier

 7  already incurred.

 8         (b)  The department of Insurance shall suspend or

 9  revoke any authorization to a self-insurer for failure to

10  comply with this section or for good cause, as defined by rule

11  of the department of Insurance. No suspension or revocation

12  shall affect the liability of any self-insurer already

13  incurred.

14         (c)  Violation of s. 440.381 by a self-insurance fund

15  shall result in the imposition of a fine not to exceed $1,000

16  per audit if the self-insurance fund fails to act on said

17  audits by correcting errors in employee classification or

18  accepted applications for coverage where it knew employee

19  classifications were incorrect.  Such fines shall be levied by

20  the department division and deposited into the Workers'

21  Compensation Administration Trust Fund.

22         (4)(a)  A carrier of insurance, including the parties

23  to any mutual, reciprocal, or other association, may not write

24  any compensation insurance under this chapter without a

25  certificate of authority permit from the office Department of

26  Insurance. Such certificate of authority permit shall be

27  given, upon application therefor, to any insurance or mutual

28  or reciprocal insurance association upon the office's

29  department's being satisfied of the solvency of such

30  corporation or association and its ability to perform all its

31  undertakings. The office Department of Insurance may revoke

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 1  any certificate of authority permit so issued for violation of

 2  any provision of this chapter.

 3         (b)  A carrier of insurance, including the parties to

 4  any mutual, reciprocal, or other association, may not write

 5  any compensation insurance under this chapter unless such

 6  carrier has a claims adjuster, either in-house or under

 7  contract, situated within this state. Self-insurers whose

 8  compensation payments are administered through a third party

 9  and carriers of insurance shall maintain a claims adjuster

10  within this state during any period for which there are any

11  open claims against such self-insurer or carrier arising under

12  the compensation insurance written by the self-insurer or

13  carrier. Individual self-insurers whose compensation payments

14  are administered by employees of the self-insurer shall not be

15  required to have their claims adjuster situated within this

16  state. Individual self-insurers shall not be required to have

17  their claims adjusters situated within this state.

18         Section 482.  Subsections (1) and (3) of section

19  440.381, Florida Statutes, are amended to read:

20         440.381  Application for coverage; reporting payroll;

21  payroll audit procedures; penalties.--

22         (1)  Applications by an employer to a carrier for

23  coverage required by s. 440.38 must be made on a form

24  prescribed by the Financial Services Commission Department of

25  Insurance. The Financial Services Commission Department of

26  Insurance shall adopt rules for applications for coverage

27  required by s. 440.38. The rules must provide that an

28  application include information on the employer, the type of

29  business, past and prospective payroll, estimated revenue,

30  previous workers' compensation experience, employee

31  classification, employee names, and any other information

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 1  necessary to enable a carrier to accurately underwrite the

 2  applicant. The rules must include a provision that a carrier

 3  or self-insurance fund may require that an employer update an

 4  application monthly to reflect any change in the required

 5  application information.

 6         (3)  The Financial Services Commission, in consultation

 7  with the department, shall establish by rule minimum

 8  requirements for audits of payroll and classifications in

 9  order to ensure that the appropriate premium is charged for

10  workers' compensation coverage. The rules shall ensure that

11  audits performed by both carriers and employers are adequate

12  to provide that all sources of payments to employees,

13  subcontractors, and independent contractors have been reviewed

14  and that the accuracy of classification of employees has been

15  verified. The rules shall provide that employers in all

16  classes other than the construction class be audited not less

17  frequently than biennially and may provide for more frequent

18  audits of employers in specified classifications based on

19  factors such as amount of premium, type of business, loss

20  ratios, or other relevant factors. In no event shall employers

21  in the construction class, generating more than the amount of

22  premium required to be experience rated, be audited less than

23  annually. The annual audits required for construction classes

24  shall consist of physical onsite audits.  Payroll verification

25  audit rules must include, but need not be limited to, the use

26  of state and federal reports of employee income, payroll and

27  other accounting records, certificates of insurance maintained

28  by subcontractors, and duties of employees. At the completion

29  of an audit, the employer or officer of the corporation and

30  the auditor must print and sign their names on the audit

31  

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 1  document and attach proof of identification to the audit

 2  document.

 3         Section 483.  Section 440.385, Florida Statutes, is

 4  amended to read:

 5         440.385  Florida Self-Insurers Guaranty Association,

 6  Incorporated.--

 7         (1)  CREATION OF ASSOCIATION.--

 8         (a)  There is created a nonprofit corporation to be

 9  known as the "Florida Self-Insurers Guaranty Association,

10  Incorporated," hereinafter referred to as "the association."

11  Upon incorporation of the association, all individual

12  self-insurers as defined in ss. 440.02(23)(a) and

13  440.38(1)(b), other than individual self-insurers which are

14  public utilities or governmental entities, shall be members of

15  the association as a condition of their authority to

16  individually self-insure in this state.  The association shall

17  perform its functions under a plan of operation as established

18  and approved under subsection (5) and shall exercise its

19  powers and duties through a board of directors as established

20  under subsection (2). The association shall have those powers

21  granted or permitted corporations not for profit, as provided

22  in chapter 617. The activities of the association shall be

23  subject to review by the department of Insurance. The

24  department of Insurance shall have oversight responsibility as

25  set forth in this section. The association is specifically

26  authorized to enter into agreements with this state to perform

27  specified services.

28         (b)  A member may voluntarily withdraw from the

29  association when the member voluntarily terminates the

30  self-insurance privilege and pays all assessments due to the

31  date of such termination.  However, the withdrawing member

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 1  shall continue to be bound by the provisions of this section

 2  relating to the period of his or her membership and any claims

 3  charged pursuant thereto.  The withdrawing member who is a

 4  member on or after January 1, 1991, shall also be required to

 5  provide to the association upon withdrawal, and at 12-month

 6  intervals thereafter, satisfactory proof, including, if

 7  requested by the association, a report of known and potential

 8  claims certified by a member of the American Academy of

 9  Actuaries, that it continues to meet the standards of s.

10  440.38(1)(b)1. in relation to claims incurred while the

11  withdrawing member exercised the privilege of self-insurance.

12  Such reporting shall continue until the withdrawing member

13  demonstrates to the association that there is no remaining

14  value to claims incurred while the withdrawing member was

15  self-insured.  If a withdrawing member fails or refuses to

16  timely provide an actuarial report to the association, the

17  association may obtain an order from a circuit court requiring

18  the member to produce such a report and ordering any other

19  relief that the court determines appropriate. The association

20  is entitled to recover all reasonable costs and attorney's

21  fees expended in such proceedings. If during this reporting

22  period the withdrawing member fails to meet the standards of

23  s. 440.38(1)(b)1., the withdrawing member who is a member on

24  or after January 1, 1991, shall thereupon, and at 6-month

25  intervals thereafter, provide to the association the certified

26  opinion of an independent actuary who is a member of the

27  American Academy of Actuaries of the actuarial present value

28  of the determined and estimated future compensation payments

29  of the member for claims incurred while the member was a

30  self-insurer, using a discount rate of 4 percent.  With each

31  such opinion, the withdrawing member shall deposit with the

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 1  association security in an amount equal to the value certified

 2  by the actuary and of a type that is acceptable for qualifying

 3  security deposits under s. 440.38(1)(b).  The withdrawing

 4  member shall continue to provide such opinions and to provide

 5  such security until such time as the latest opinion shows no

 6  remaining value of claims.  The association has a cause of

 7  action against a withdrawing member, and against any successor

 8  of a withdrawing member, who fails to timely provide the

 9  required opinion or who fails to maintain the required deposit

10  with the association. The association shall be entitled to

11  recover a judgment in the amount of the actuarial present

12  value of the determined and estimated future compensation

13  payments of the withdrawing member for claims incurred during

14  the time that the withdrawing member exercised the privilege

15  of self-insurance, together with reasonable attorney's fees.

16  The association is also entitled to recover reasonable

17  attorney's fees in any action to compel production of any

18  actuarial report required by this section.  For purposes of

19  this section, the successor of a withdrawing member means any

20  person, business entity, or group of persons or business

21  entities, which holds or acquires legal or beneficial title to

22  the majority of the assets or the majority of the shares of

23  the withdrawing member.

24         (2)  BOARD OF DIRECTORS.--The board of directors of the

25  association shall consist of nine persons and shall be

26  organized as established in the plan of operation. All board

27  members shall be experienced in self-insurance in this state.

28  Each director shall serve for a 4-year term and may be

29  reappointed.  Appointments after January 1, 2002, shall be

30  made by the department of Insurance upon recommendation of

31  members of the association. Any vacancy on the board shall be

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 1  filled for the remaining period of the term in the same manner

 2  as appointments other than initial appointments are made. Each

 3  director shall be reimbursed for expenses incurred in carrying

 4  out the duties of the board on behalf of the association.

 5         (3)  POWERS AND DUTIES.--

 6         (a)  Upon creation of the Insolvency Fund pursuant to

 7  the provisions of subsection (4), the association is obligated

 8  for payment of compensation under this chapter to insolvent

 9  members' employees resulting from incidents and injuries

10  existing prior to the member becoming an insolvent member and

11  from incidents and injuries occurring within 30 days after the

12  member has become an insolvent member, provided the incidents

13  giving rise to claims for compensation under this chapter

14  occur during the year in which such insolvent member is a

15  member of the guaranty fund and was assessable pursuant to the

16  plan of operation, and provided the employee makes timely

17  claim for such payments according to procedures set forth by a

18  court of competent jurisdiction over the delinquency or

19  bankruptcy proceedings of the insolvent member. Such

20  obligation includes only that amount due the injured worker or

21  workers of the insolvent member under this chapter.  In no

22  event is the association obligated to a claimant in an amount

23  in excess of the obligation of the insolvent member.  The

24  association shall be deemed the insolvent employer for

25  purposes of this chapter to the extent of its obligation on

26  the covered claims and, to such extent, shall have all rights,

27  duties, and obligations of the insolvent employer as if the

28  employer had not become insolvent. However, in no event shall

29  the association be liable for any penalties or interest.

30         (b)  The association may:

31  

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 1         1.  Employ or retain such persons as are necessary to

 2  handle claims and perform other duties of the association.

 3         2.  Borrow funds necessary to effect the purposes of

 4  this section in accord with the plan of operation.

 5         3.  Sue or be sued.

 6         4.  Negotiate and become a party to such contracts as

 7  are necessary to carry out the purposes of this section.

 8         5.  Purchase such reinsurance as is determined

 9  necessary pursuant to the plan of operation.

10         6.  Review all applicants for membership in the

11  association to determine whether the applicant is qualified

12  for membership under the law. The association shall recommend

13  to the department of Insurance that the application be

14  accepted or rejected based on the criteria set forth in s.

15  440.38(1)(b).  The department of Insurance shall approve or

16  disapprove the application as provided in paragraph (6)(a).

17         7.  Collect and review financial information from

18  employers and make recommendations to the department of

19  Insurance regarding the appropriate security deposit and

20  reinsurance amounts necessary for an employer to demonstrate

21  that it has the financial strength necessary to ensure the

22  timely payment of all current and future claims. The

23  association may audit and examine an employer to verify the

24  financial strength of its current and former members. If the

25  association determines that a current or former self-insured

26  employer does not have the financial strength necessary to

27  ensure the timely payment of all current and estimated future

28  claims, the association may recommend to the department of

29  Insurance that the department:

30         a.  Revoke the employer's self-insurance privilege.

31  

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 1         b.  Require the employer to provide a certified opinion

 2  of an independent actuary who is a member of the American

 3  Academy of Actuaries as to the actuarial present value of the

 4  employer's estimated current and future compensation payments,

 5  using a 4-percent discount rate.

 6         c.  Require an increase in the employer's security

 7  deposit in an amount determined by the association to be

 8  necessary to ensure payment of compensation claims.  The

 9  department of Insurance shall act on such recommendations as

10  provided in paragraph (6)(a).  The association has a cause of

11  action against an employer, and against any successor of an

12  employer, who fails to provide an additional security deposit

13  required by the department of Insurance.  The association

14  shall file an action in circuit court to recover a judgment in

15  the amount of the requested additional security deposit

16  together with reasonable attorney's fees.  For the purposes of

17  this section, the successor of an employer is any person,

18  business entity, or group of persons or business entities

19  which holds or acquires legal or beneficial title to the

20  majority of the assets or the majority of the shares of the

21  employer.

22         8.  Charge fees to any member of the association to

23  cover the actual costs of examining the financial and safety

24  conditions of that member.

25         9.  Charge an applicant for membership in the

26  association a fee sufficient to cover the actual costs of

27  examining the financial condition of the applicant.

28         10.  Implement any procedures necessary to ensure

29  compliance with regulatory actions taken by the department of

30  Insurance.

31  

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 1         (c)1.  To the extent necessary to secure funds for the

 2  payment of covered claims and also to pay the reasonable costs

 3  to administer them, the association, subject to approval by

 4  the department of Insurance, shall levy assessments based on

 5  the annual written premium each employer would have paid had

 6  the employer not been self-insured.  Every assessment shall be

 7  made as a uniform percentage of the figure applicable to all

 8  individual self-insurers, provided that the assessment levied

 9  against any self-insurer in any one year shall not exceed 1

10  percent of the annual written premium during the calendar year

11  preceding the date of the assessment. Assessments shall be

12  remitted to and administered by the board of directors in the

13  manner specified by the approved plan.  Each employer so

14  assessed shall have at least 30 days' written notice as to the

15  date the assessment is due and payable.  The association shall

16  levy assessments against any newly admitted member of the

17  association so that the basis of contribution of any newly

18  admitted member is the same as previously admitted members,

19  provision for which shall be contained in the plan of

20  operation.

21         2.  If, in any one year, funds available from such

22  assessments, together with funds previously raised, are not

23  sufficient to make all the payments or reimbursements then

24  owing, the funds available shall be prorated, and the unpaid

25  portion shall be paid as soon thereafter as sufficient

26  additional funds become available.

27         3.  Funds may be allocated or paid from the Workers'

28  Compensation Administration Trust Fund to contract with the

29  association to perform services required by law. However, no

30  state funds of any kind shall be allocated or paid to the

31  association or any of its accounts for payment of covered

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 1  claims or related expenses except those state funds accruing

 2  to the association by and through the assignment of rights of

 3  an insolvent employer. The department of Insurance may not

 4  levy any assessment on the association.

 5         (4)  INSOLVENCY FUND.--Upon the adoption of a plan of

 6  operation, there shall be created an Insolvency Fund to be

 7  managed by the association.

 8         (a)  The Insolvency Fund is created for purposes of

 9  meeting the obligations of insolvent members incurred while

10  members of the association and after the exhaustion of any

11  security deposit, as required under this chapter. However, if

12  such security deposit or reinsurance policy is payable to the

13  association, the association shall commence to provide

14  benefits out of the Insolvency Fund and be reimbursed from the

15  security deposit or reinsurance policy. The method of

16  operation of the Insolvency Fund shall be defined in the plan

17  of operation as provided in subsection (5).

18         (b)  The department of Insurance shall have the

19  authority to audit the financial soundness of the Insolvency

20  Fund annually.

21         (c)  The department of Insurance may offer certain

22  amendments to the plan of operation to the board of directors

23  of the association for purposes of assuring the ongoing

24  financial soundness of the Insolvency Fund and its ability to

25  meet the obligations of this section.

26         (5)  PLAN OF OPERATION.--The association shall operate

27  pursuant to a plan of operation approved by the board of

28  directors.  The plan of operation in effect on January 1,

29  2002, and approved by the Department of Labor and Employment

30  Security shall remain in effect. However, any amendments to

31  

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 1  the plan shall not become effective until approved by the

 2  Department of Financial Services Insurance.

 3         (a)  The purpose of the plan of operation shall be to

 4  provide the association and the board of directors with the

 5  authority and responsibility to establish the necessary

 6  programs and to take the necessary actions to protect against

 7  the insolvency of a member of the association.  In addition,

 8  the plan shall provide that the members of the association

 9  shall be responsible for maintaining an adequate Insolvency

10  Fund to meet the obligations of insolvent members provided for

11  under this act and shall authorize the board of directors to

12  contract and employ those persons with the necessary expertise

13  to carry out this stated purpose. By January 1, 2003, the

14  board of directors shall submit to the department of Insurance

15  a proposed plan of operation for the administration of the

16  association. The department of Insurance shall approve the

17  plan by order, consistent with this section. The department of

18  Insurance shall approve any amendments to the plan, consistent

19  with this section, which are determined appropriate to carry

20  out the duties and responsibilities of the association.

21         (b)  All member employers shall comply with the plan of

22  operation.

23         (c)  The plan of operation shall:

24         1.  Establish the procedures whereby all the powers and

25  duties of the association under subsection (3) will be

26  performed.

27         2.  Establish procedures for handling assets of the

28  association.

29         3.  Establish the amount and method of reimbursing

30  members of the board of directors under subsection (2).

31  

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 1         4.  Establish procedures by which claims may be filed

 2  with the association and establish acceptable forms of proof

 3  of covered claims.  Notice of claims to the receiver or

 4  liquidator of the insolvent employer shall be deemed notice to

 5  the association or its agent, and a list of such claims shall

 6  be submitted periodically to the association or similar

 7  organization in another state by the receiver or liquidator.

 8         5.  Establish regular places and times for meetings of

 9  the board of directors.

10         6.  Establish procedures for records to be kept of all

11  financial transactions of the association and its agents and

12  the board of directors.

13         7.  Provide that any member employer aggrieved by any

14  final action or decision of the association may appeal to the

15  department of Insurance within 30 days after the action or

16  decision.

17         8.  Establish the procedures whereby recommendations of

18  candidates for the board of directors shall be submitted to

19  the department of Insurance.

20         9.  Contain additional provisions necessary or proper

21  for the execution of the powers and duties of the association.

22         (d)  The plan of operation may provide that any or all

23  of the powers and duties of the association, except those

24  specified under subparagraphs (c)1. and 2., be delegated to a

25  corporation, association, or other organization which performs

26  or will perform functions similar to those of this association

27  or its equivalent in two or more states.  Such a corporation,

28  association, or organization shall be reimbursed as a

29  servicing facility would be reimbursed and shall be paid for

30  its performance of any other functions of the association.  A

31  delegation of powers or duties under this subsection shall

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 1  take effect only with the approval of both the board of

 2  directors and the department of Insurance and may be made only

 3  to a corporation, association, or organization which extends

 4  protection which is not substantially less favorable and

 5  effective than the protection provided by this section.

 6         (6)  POWERS AND DUTIES OF DEPARTMENT OF INSURANCE.--The

 7  department of Insurance shall:

 8         (a)  Review recommendations of the association

 9  concerning whether current or former self-insured employers or

10  members of the association have the financial strength

11  necessary to ensure the timely payment of all current and

12  estimated future claims.  If the association determines an

13  employer does not have the financial strength necessary to

14  ensure the timely payment of all current and future claims and

15  recommends action pursuant to paragraph (3)(b), the department

16  shall take such action as necessary to order the employer to

17  comply with the recommendation, unless the department finds by

18  clear and convincing evidence that the recommendation is

19  erroneous.

20         (b)  Contract with the association for services, which

21  may include, but are not limited to:

22         1.  Processing applications for self-insurance.

23         2.  Collecting and reviewing financial statements and

24  loss reserve information from individual self-insurers.

25         3.  Collecting and maintaining files for original

26  security deposit documents and reinsurance policies from

27  individual self-insurers and, if necessary, perfecting

28  security interests in security deposits.

29         4.  Processing compliance documentation for individual

30  self-insurers and providing copies of such documentation to

31  the department.

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 1         5.  Collecting all data necessary to calculate annual

 2  premium for all individual self-insurers, including individual

 3  self-insurers that are public utilities or governmental

 4  entities, and providing such calculated annual premium to the

 5  department division for assessment purposes.

 6         6.  Inspecting and auditing annually, if necessary, the

 7  payroll and other records of each individual self-insurer,

 8  including individual self-insurers that are public utilities

 9  or governmental entities, in order to determine the wages paid

10  by each individual self-insurer, the premium such individual

11  self-insurer would have to pay if insured, and all payments of

12  compensation made by such individual self-insurer during each

13  prior period with the results of such audit provided to the

14  department division. For purposes of this section, the payroll

15  records of each individual self-insurer shall be open to

16  inspection and audit by the association and the department, or

17  their authorized representatives, during regular business

18  hours.

19         7.  Processing applications and making recommendations

20  with respect to the qualification of a business to be approved

21  to provide or continue to provide services to individual

22  self-insurers in the areas of underwriting, claims adjusting,

23  loss control, and safety engineering.

24         8.  Providing legal representation to implement the

25  administration and audit of individual self-insurers and

26  making recommendations regarding prosecution of any

27  administrative or legal proceedings necessitated by the

28  regulation of the individual self-insurers by the department.

29         (c)  Contract with an attorney or attorneys recommended

30  by the association for representation of the department in any

31  

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 1  administrative or legal proceedings necessitated by the

 2  recommended regulation of the individual self-insurers.

 3         (d)  Direct the association to require from each

 4  individual self-insurer, at such time and in accordance with

 5  such regulations as the department prescribes, reports

 6  relating to wages paid, the amount of premiums such individual

 7  self-insurer would have to pay if insured, and all payments of

 8  compensation made by such individual self-insurer during each

 9  prior period and to determine the amounts paid by each

10  individual self-insurer and the amounts paid by all individual

11  self-insurers during such period. For purposes of this

12  section, the payroll records of each individual self-insurer

13  shall be open to annual inspection and audit by the

14  association and the department, or their authorized

15  representative, during regular business hours, and if any

16  audit of such records of an individual self-insurer discloses

17  a deficiency in the amount reported to the association or in

18  the amounts paid to the department division by an individual

19  self-insurer for its assessment for the Workers' Compensation

20  Administration Trust Fund, the department or the association

21  may assess the cost of such audit against the individual

22  self-insurer.

23         (e)  Require that the association notify the member

24  employers and any other interested parties of the

25  determination of insolvency and of their rights under this

26  section.  Such notification shall be by mail at the last known

27  address thereof when available; but, if sufficient information

28  for notification by mail is not available, notice by

29  publication in a newspaper of general circulation shall be

30  sufficient.

31  

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 1         (f)  Suspend or revoke the authority of any member

 2  employer failing to pay an assessment when due or failing to

 3  comply with the plan of operation to self-insure in this

 4  state. As an alternative, the department may levy a fine on

 5  any member employer failing to pay an assessment when due.

 6  Such fine shall not exceed 5 percent of the unpaid assessment

 7  per month, except that no fine shall be less than $100 per

 8  month.

 9         (g)  Revoke the designation of any servicing facility

10  if the department finds that claims are being handled

11  unsatisfactorily.

12         (7)  EFFECT OF PAID CLAIMS.--

13         (a)  Any person who recovers from the association under

14  this section shall be deemed to have assigned his or her

15  rights to the association to the extent of such recovery.

16  Every claimant seeking the protection of this section shall

17  cooperate with the association to the same extent as such

18  person would have been required to cooperate with the

19  insolvent member.  The association shall have no cause of

20  action against the employee of the insolvent member for any

21  sums the association has paid out, except such causes of

22  action as the insolvent member would have had if such sums had

23  been paid by the insolvent member.  In the case of an

24  insolvent member operating on a plan with assessment

25  liability, payments of claims by the association shall not

26  operate to reduce the liability of the insolvent member to the

27  receiver, liquidator, or statutory successor for unpaid

28  assessments.

29         (b)  The receiver, liquidator, or statutory successor

30  of an insolvent member shall be bound by settlements of

31  covered claims by the association or a similar organization in

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 1  another state.  The court having jurisdiction shall grant such

 2  claims priority against the assets of the insolvent member

 3  equal to that to which the claimant would have been entitled

 4  in the absence of this section. The expense of the association

 5  or similar organization in handling claims shall be accorded

 6  the same priority as the expenses of the liquidator.

 7         (c)  The association shall file periodically with the

 8  receiver or liquidator of the insolvent member statements of

 9  the covered claims paid by the association and estimates of

10  anticipated claims on the association, which shall preserve

11  the rights of the association against the assets of the

12  insolvent member.

13         (8)  NOTIFICATION OF INSOLVENCIES.--To aid in the

14  detection and prevention of employer insolvencies: Upon

15  determination by majority vote that any member employer may be

16  insolvent or in a financial condition hazardous to the

17  employees thereof or to the public, it shall be the duty of

18  the board of directors to notify the department of Insurance

19  of any information indicating such condition.

20         (9)  EXAMINATION OF THE ASSOCIATION.--The association

21  shall be subject to examination and regulation by the

22  department of Insurance.  No later than March 30 of each year,

23  the board of directors shall submit an audited financial

24  statement for the preceding calendar year in a form approved

25  by the department.

26         (10)  IMMUNITY.--There shall be no liability on the

27  part of, and no cause of action of any nature shall arise

28  against, any member employer, the association or its agents or

29  employees, the board of directors, or the department of

30  Insurance or its representatives for any action taken by them

31  

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 1  in the performance of their powers and duties under this

 2  section.

 3         (11)  STAY OF PROCEEDINGS; REOPENING OF DEFAULT

 4  JUDGMENTS.--All proceedings in which an insolvent employer is

 5  a party, or is obligated to defend a party, in any court or

 6  before any quasi-judicial body or administrative board in this

 7  state shall be stayed for up to 6 months, or for such

 8  additional period from the date the employer becomes an

 9  insolvent member, as is deemed necessary by a court of

10  competent jurisdiction to permit proper defense by the

11  association of all pending causes of action as to any covered

12  claims arising from a judgment under any decision, verdict, or

13  finding based on the default of the insolvent member. The

14  association, either on its own behalf or on behalf of the

15  insolvent member, may apply to have such judgment, order,

16  decision, verdict, or finding set aside by the same court or

17  administrator that made such judgment, order, decision,

18  verdict, or finding and shall be permitted to defend against

19  such claim on the merits.  If requested by the association,

20  the stay of proceedings may be shortened or waived.

21         (12)  LIMITATION ON CERTAIN ACTIONS.--Notwithstanding

22  any other provision of this chapter, a covered claim, as

23  defined herein, with respect to which settlement is not

24  effected and pursuant to which suit is not instituted against

25  the insured of an insolvent member or the association within 1

26  year after the deadline for filing claims with the receiver of

27  the insolvent member, or any extension of the deadline, shall

28  thenceforth be barred as a claim against the association.

29         (13)  CORPORATE INCOME TAX CREDIT.--Any sums acquired

30  by a member by refund, dividend, or otherwise from the

31  association shall be payable within 30 days of receipt to the

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 1  Department of Revenue for deposit with the Chief Financial

 2  Officer Treasurer to the credit of the General Revenue Fund.

 3  All provisions of chapter 220 relating to penalties and

 4  interest on delinquent corporate income tax payments apply to

 5  payments due under this subsection.

 6         Section 484.  Subsections (2), (3), and (4) of section

 7  440.386, Florida Statutes, are amended to read:

 8         440.386  Individual self-insurers' insolvency;

 9  conservation; liquidation.--

10         (2)  COMMENCEMENT OF DELINQUENCY PROCEEDING.--The

11  department of Insurance or the Florida Self-Insurers Guaranty

12  Association, Incorporated, may commence a delinquency

13  proceeding by application to the court for an order directing

14  the individual self-insurer to show cause why the department

15  or association should not have the relief sought. On the

16  return of such order to show cause, and after a full hearing,

17  the court shall either deny the application or grant the

18  application, together with such other relief as the nature of

19  the case and the interests of the claimants, creditors,

20  stockholders, members, subscribers, or public may require. The

21  department and the association shall give reasonable written

22  notice to each other of all hearings which pertain to an

23  adjudication of insolvency of a member individual

24  self-insurer.

25         (3)  GROUNDS FOR LIQUIDATION.--The department of

26  Insurance or the association may apply to the court for an

27  order appointing a receiver and directing the receiver to

28  liquidate the business of a domestic individual self-insurer

29  if such individual self-insurer is insolvent.

30         (4)  GROUNDS FOR CONSERVATION; FOREIGN INDIVIDUAL

31  SELF-INSURERS.--

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 1         (a)  The department of Insurance or the association may

 2  apply to the court for an order appointing a receiver or

 3  ancillary receiver, and directing the receiver to conserve the

 4  assets within this state, of a foreign individual self-insurer

 5  if such individual self-insurer is insolvent.

 6         (b)  An order to conserve the assets of an individual

 7  self-insurer shall require the receiver forthwith to take

 8  possession of the property of the receiver within the state

 9  and to conserve it, subject to the further direction of the

10  court.

11         Section 485.  Subsection (2) of section 440.40, Florida

12  Statutes, is amended to read:

13         440.40  Compensation notice.--Every employer who has

14  secured compensation under the provisions of this chapter

15  shall keep posted in a conspicuous place or places in and

16  about her or his place or places of business typewritten or

17  printed notices, in accordance with a form prescribed by the

18  department, the following:

19         (2)  A notice stating: "Anti-Fraud Reward

20  Program.--Rewards of up to $25,000 may be paid to persons

21  providing information to the Department of Financial Services

22  Insurance leading to the arrest and conviction of persons

23  committing insurance fraud, including employers who illegally

24  fail to obtain workers' compensation coverage. Persons may

25  report suspected fraud to the department at ...(Phone No.)....

26  A person is not subject to civil liability for furnishing such

27  information, if such person acts without malice, fraud, or bad

28  faith."

29         Section 486.  Subsections (3), (4), and (6) of section

30  440.44, Florida Statutes, are amended to read:

31         440.44  Workers' compensation; staff organization.--

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 1         (3)  EXPENDITURES.--The department, the agency, the

 2  office, the Department of Education, and the director of the

 3  Division of Administrative Hearings shall make such

 4  expenditures, including expenditures for personal services and

 5  rent at the seat of government and elsewhere, for law books;

 6  for telephone services and WATS lines; for books of reference,

 7  periodicals, equipment, and supplies; and for printing and

 8  binding as may be necessary in the administration of this

 9  chapter. All expenditures in the administration of this

10  chapter shall be allowed and paid as provided in s. 440.50

11  upon the presentation of itemized vouchers therefor approved

12  by the department, the agency, the office, the Department of

13  Education, or the director of the Division of Administrative

14  Hearings.

15         (4)  PERSONNEL ADMINISTRATION.--Subject to the other

16  provisions of this chapter, the department, the agency, the

17  office, the Department of Education, and the Division of

18  Administrative Hearings may appoint, and prescribe the duties

19  and powers of, bureau chiefs, attorneys, accountants, medical

20  advisers, technical assistants, inspectors, claims examiners,

21  and such other employees as may be necessary in the

22  performance of their duties under this chapter.

23         (6)  SEAL.--The department and the judges of

24  compensation claims shall have a seal upon which shall be

25  inscribed the words "State of Florida Department of Financial

26  Services Insurance--Seal" and "Division of Administrative

27  Hearings--Seal," respectively.

28         Section 487.  Subsections (8) and (9) of section

29  440.49, Florida Statutes, are amended to read:

30         440.49  Limitation of liability for subsequent injury

31  through Special Disability Trust Fund.--

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 1         (8)  PREFERRED WORKER PROGRAM.--The Department of

 2  Education or administrator shall issue identity cards to

 3  preferred workers upon request by qualified employees and the

 4  Department of Financial Services Insurance shall reimburse an

 5  employer, from the Special Disability Trust Fund, for the cost

 6  of workers' compensation premium related to the preferred

 7  workers payroll for up to 3 years of continuous employment

 8  upon satisfactory evidence of placement and issuance of

 9  payroll and classification records and upon the employee's

10  certification of employment. The Department of Financial

11  Services and the Department of Education may by rule prescribe

12  definitions, forms, and procedures for the administration of

13  the preferred worker program. The Department of Education may

14  by rule prescribe the schedule for submission of forms for

15  participation in the program.

16         (9)  SPECIAL DISABILITY TRUST FUND.--

17         (a)  There is established in the State Treasury a

18  special fund to be known as the "Special Disability Trust

19  Fund," which shall be available only for the purposes stated

20  in this section; and the assets thereof may not at any time be

21  appropriated or diverted to any other use or purpose. The

22  Chief Financial Officer Treasurer shall be the custodian of

23  such fund, and all moneys and securities in such fund shall be

24  held in trust by such Chief Financial Officer Treasurer and

25  shall not be the money or property of the state. The Chief

26  Financial Officer Treasurer is authorized to disburse moneys

27  from such fund only when approved by the department or

28  corporation and upon the order of the Comptroller. The Chief

29  Financial Officer Treasurer shall deposit any moneys paid into

30  such fund into such depository banks as the department may

31  designate and is authorized to invest any portion of the fund

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 1  which, in the opinion of the department, is not needed for

 2  current requirements, in the same manner and subject to all

 3  the provisions of the law with respect to the deposits of

 4  state funds by such Chief Financial Officer Treasurer. All

 5  interest earned by such portion of the fund as may be invested

 6  by the Chief Financial Officer Treasurer shall be collected by

 7  her or him and placed to the credit of such fund.

 8         (b)1.  The Special Disability Trust Fund shall be

 9  maintained by annual assessments upon the insurance companies

10  writing compensation insurance in the state, the commercial

11  self-insurers under ss. 624.462 and 624.4621, the assessable

12  mutuals as defined in s. 628.6011 under s. 628.601, and the

13  self-insurers under this chapter, which assessments shall

14  become due and be paid quarterly at the same time and in

15  addition to the assessments provided in s. 440.51. The

16  department shall estimate annually in advance the amount

17  necessary for the administration of this subsection and the

18  maintenance of this fund and shall make such assessment in the

19  manner hereinafter provided.

20         2.  The annual assessment shall be calculated to

21  produce during the ensuing fiscal year an amount which, when

22  combined with that part of the balance in the fund on June 30

23  of the current fiscal year which is in excess of $100,000, is

24  equal to the average of:

25         a.  The sum of disbursements from the fund during the

26  immediate past 3 calendar years, and

27         b.  Two times the disbursements of the most recent

28  calendar year.

29  

30  Such amount shall be prorated among the insurance companies

31  writing compensation insurance in the state and the

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 1  self-insurers. Provided however, for those carriers that have

 2  excluded ceded reinsurance premiums from their assessments on

 3  or before January 1, 2000, no assessments on ceded reinsurance

 4  premiums shall be paid by those carriers until such time as

 5  the former Division of Workers' Compensation of the Department

 6  of Labor and Employment Security or the department advises

 7  each of those carriers of the impact that the inclusion of

 8  ceded reinsurance premiums has on their assessment. The

 9  department may not recover any past underpayments of

10  assessments levied against any carrier that on or before

11  January 1, 2000, excluded ceded reinsurance premiums from

12  their assessment prior to the point that the former Division

13  of Workers' Compensation of the Department of Labor and

14  Employment Security or the department advises of the

15  appropriate assessment that should have been paid.

16         3.  The net premiums written by the companies for

17  workers' compensation in this state and the net premium

18  written applicable to the self-insurers in this state are the

19  basis for computing the amount to be assessed as a percentage

20  of net premiums. Such payments shall be made by each carrier

21  and self-insurer to the department for the Special Disability

22  Trust Fund in accordance with such regulations as the

23  department prescribes.

24         4.  The Chief Financial Officer Treasurer is authorized

25  to receive and credit to such Special Disability Trust Fund

26  any sum or sums that may at any time be contributed to the

27  state by the United States under any Act of Congress, or

28  otherwise, to which the state may be or become entitled by

29  reason of any payments made out of such fund.

30  

31  

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 1         (c)  Notwithstanding the Special Disability Trust Fund

 2  assessment rate calculated pursuant to this section, the rate

 3  assessed shall not exceed 4.52 percent.

 4         (d)  The Special Disability Trust Fund shall be

 5  supplemented by a $250 notification fee on each notice of

 6  claim filed or refiled after July 1, 1997, and a $500 fee on

 7  each proof of claim filed in accordance with subsection (7).

 8  Revenues from the fee shall be deposited into the Special

 9  Disability Trust Fund and are exempt from the deduction

10  required by s. 215.20. The fees provided in this paragraph

11  shall not be imposed upon any insurer which is in receivership

12  with the department of Insurance.

13         (e)  The department or administrator shall report

14  annually on the status of the Special Disability Trust Fund.

15  The report shall update the estimated undiscounted and

16  discounted fund liability, as determined by an independent

17  actuary, change in the total number of notices of claim on

18  file with the fund in addition to the number of newly filed

19  notices of claim, change in the number of proofs of claim

20  processed by the fund, the fee revenues refunded and revenues

21  applied to pay down the liability of the fund, the average

22  time required to reimburse accepted claims, and the average

23  administrative costs per claim.  The department or

24  administrator shall submit its report to the Governor, the

25  President of the Senate, and the Speaker of the House of

26  Representatives by December 1 of each year.

27         Section 488.  Subsections (1), (2), and (3) of section

28  440.50, Florida Statutes, are amended to read:

29         440.50  Workers' Compensation Administration Trust

30  Fund.--

31  

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 1         (1)(a)  There is established in the State Treasury a

 2  special fund to be known as the "Workers' Compensation

 3  Administration Trust Fund" for the purpose of providing for

 4  the payment of all expenses in respect to the administration

 5  of this chapter, including the vocational rehabilitation of

 6  injured employees as provided in s. 440.49 and the payments

 7  due under s. 440.15(1)(f), the funding of the fixed

 8  administrative expenses of the plan, and the funding of the

 9  Bureau of Workers' Compensation Fraud within the Department of

10  Financial Services Insurance.  Such fund shall be administered

11  by the department.

12         (b)  The department is authorized to transfer as a loan

13  an amount not in excess of $250,000 from such special fund to

14  the Special Disability Trust Fund established by s. 440.49(9),

15  which amount shall be repaid to said special fund in annual

16  payments equal to not less than 10 percent of moneys received

17  for such Special Disability Trust Fund.

18         (2)  The Chief Financial Officer Treasurer is

19  authorized to disburse moneys from such fund only when

20  approved by the department and upon the order of the

21  Comptroller.

22         (3)  The Chief Financial Officer Treasurer shall

23  deposit any moneys paid into such fund into such depository

24  banks as the department may designate and is authorized to

25  invest any portion of the fund which, in the opinion of the

26  department, is not needed for current requirements, in the

27  same manner and subject to all the provisions of the law with

28  respect to the deposit of state funds by such Chief Financial

29  Officer Treasurer.  All interest earned by such portion of the

30  fund as may be invested by the Chief Financial Officer

31  

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 1  Treasurer shall be collected by him or her and placed to the

 2  credit of such fund.

 3         Section 489.  Paragraph (a) of subsection (1) and

 4  subsection (3) of section 440.51, Florida Statutes, are

 5  amended to read:

 6         440.51  Expenses of administration.--

 7         (1)  The department shall estimate annually in advance

 8  the amounts necessary for the administration of this chapter,

 9  in the following manner.

10         (a)  The department shall, by July 1 of each year,

11  notify carriers and self-insurers of the assessment rate,

12  which shall be based on the anticipated expenses of the

13  administration of this chapter for the next calendar year.

14  Such assessment rate shall take effect January 1 of the next

15  calendar year and shall be included in workers' compensation

16  rate filings approved by the office Department of Insurance

17  which become effective on or after January 1 of the next

18  calendar year. Assessments shall become due and be paid

19  quarterly.

20         (3)  If any carrier fails to pay the amounts assessed

21  against him or her under the provisions of this section within

22  60 days from the time such notice is served upon him or her,

23  the office, upon being notified by the department, may suspend

24  or revoke the authorization to insure compensation in

25  accordance with the procedure in s. 440.38(3)(a). The

26  department may permit a carrier to remit any underpayment of

27  assessments for assessments levied after January 1, 2001.

28         Section 490.  Section 440.515, Florida Statutes, is

29  amended to read:

30         440.515  Reports from self-insurers;

31  confidentiality.--The department of Insurance shall maintain

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 1  the reports filed in accordance with s. 440.51(6)(b) as

 2  confidential and exempt from the provisions of s. 119.07(1),

 3  and such reports shall be released only for bona fide research

 4  or educational purposes or after receipt of consent from the

 5  employer.

 6         Section 491.  Subsections (3) and (4) of section

 7  440.52, Florida Statutes, are amended to read:

 8         440.52  Registration of insurance carriers; notice of

 9  cancellation or expiration of policy; suspension or revocation

10  of authority.--

11         (3)  If the department finds, after due notice and a

12  hearing at which the insurance carrier is entitled to be heard

13  in person or by counsel and present evidence, that the

14  insurance carrier has repeatedly failed to comply with its

15  obligations under this chapter, the department may request the

16  office to suspend or revoke the authorization of such

17  insurance carrier to write workers' compensation insurance

18  under this chapter. Such suspension or revocation shall not

19  affect the liability of any such insurance carrier under

20  policies in force prior to the suspension or revocation.

21         (4)  In addition to the penalties prescribed in

22  subsection (3), violation of s. 440.381 by an insurance

23  carrier shall result in the imposition of a fine not to exceed

24  $1,000 per audit, if the insurance carrier fails to act on

25  said audits by correcting errors in employee classification or

26  accepted applications for coverage where it knew employee

27  classifications were incorrect. Such fines shall be levied by

28  the office Department of Insurance and deposited into the

29  Insurance Commissioner's Regulatory Trust Fund.

30         Section 492.  Section 440.525, Florida Statutes, is

31  amended to read:

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 1         440.525  Examination of carriers.--The department and

 2  office may examine each carrier as often as is warranted to

 3  ensure that carriers are fulfilling their obligations under

 4  this chapter the law. The examination may cover any period of

 5  the carrier's operations since the last previous examination.

 6         Section 493.  Section 440.591, Florida Statutes, is

 7  amended to read:

 8         440.591  Administrative procedure; rulemaking

 9  authority.--The department, the Financial Services Commission,

10  the agency, and the Department of Education may adopt rules

11  pursuant to ss. 120.536(1) and 120.54 to implement the

12  provisions of this chapter conferring duties upon it.

13         Section 494.  Paragraph (a) of subsection (5) of

14  section 443.131, Florida Statutes, is amended to read:

15         443.131  Contributions.--

16         (5)  FINANCING BENEFITS PAID TO EMPLOYEES OF THE STATE

17  AND POLITICAL SUBDIVISIONS OF THE STATE.--Benefits paid to

18  employees of this state or any instrumentality of this state,

19  or to employees of any political subdivision of this state or

20  any instrumentality thereof, based upon service defined in s.

21  443.036(21)(b), shall be financed in accordance with this

22  subsection.

23         (a)1.  Unless an election is made as provided in

24  paragraph (c), the state or any political subdivision of the

25  state shall pay into the Unemployment Compensation Trust Fund

26  an amount equivalent to the amount of regular benefits,

27  short-time compensation benefits, and extended benefits paid

28  to individuals, based on wages paid by the state or the

29  political subdivision for service defined in s.

30  443.036(21)(b).

31  

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 1         2.  If Should any state agency becomes become more than

 2  120 days delinquent on reimbursements due to the Unemployment

 3  Compensation Trust Fund, the division shall certify to the

 4  Chief Financial Officer Comptroller the amount due and the

 5  Chief Financial Officer Comptroller shall transfer the amount

 6  due to the Unemployment Compensation Trust Fund from the funds

 7  of such agency that may legally be used for such purpose.  In

 8  the event any political subdivision of the state or any

 9  instrumentality thereof becomes more than 120 days delinquent

10  on reimbursements due to the Unemployment Compensation Trust

11  Fund, then, upon request by the division after a hearing, the

12  Department of Revenue or the Department of Financial Services

13  Banking and Finance, as the case may be, shall deduct the

14  amount owed by the political subdivision or instrumentality

15  from any funds to be distributed by it to the county, city,

16  special district, or consolidated form of government for

17  further distribution to the trust fund in accordance with this

18  chapter. Should any employer for whom the city or county tax

19  collector collects taxes fail to make the reimbursements to

20  the Unemployment Compensation Trust Fund required by this

21  chapter, the tax collector after a hearing, at the request of

22  the division and upon receipt of a certificate showing the

23  amount owed by the employer, shall deduct the amount so

24  certified from any taxes collected for the employer and remit

25  same to the Department of Labor and Employment Security for

26  further distribution to the trust fund in accordance with this

27  chapter. This subparagraph does not apply to those amounts due

28  for benefits paid prior to October 1, 1979.  This subparagraph

29  does not apply to amounts owed by a political subdivision for

30  benefits erroneously paid where the claimant is required to

31  

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 1  repay to the division under s. 443.151(6)(a) or (b) any sum as

 2  benefits received.

 3         Section 495.  Subsections (2), (3), and (4) of section

 4  443.191, Florida Statutes, are amended to read:

 5         443.191  Unemployment Compensation Trust Fund;

 6  establishment and control.--

 7         (2)  The Chief Financial Officer Treasurer is the ex

 8  officio treasurer and custodian of the fund and shall

 9  administer the fund in accordance with the directions of the

10  division.  All payments from the fund must be approved by the

11  division or by a duly authorized agent and must be made by the

12  Treasurer upon warrants issued by the Comptroller, except as

13  hereinafter provided.  The Chief Financial Officer Treasurer

14  shall maintain within the fund three separate accounts:

15         (a)  A clearing account;

16         (b)  An Unemployment Compensation Trust Fund account;

17  and

18         (c)  A benefit account.

19  

20  All moneys payable to the fund, including moneys received from

21  the United States as reimbursement for extended benefits paid

22  by the division, upon receipt thereof by the division, must be

23  forwarded to the Chief Financial Officer Treasurer, who shall

24  immediately deposit them in the clearing account. Refunds

25  payable under s. 443.141 may be paid from the clearing account

26  upon warrants issued by the Comptroller.  After clearance, all

27  other moneys in the clearing account must be immediately

28  deposited with the Secretary of the Treasury of the United

29  States to the credit of the account of this state in the

30  Unemployment Compensation Trust Fund established and

31  maintained under s. 904 of the Social Security Act, as

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 1  amended, any provisions of the law in this state relating to

 2  the deposit, administration, release, or disbursement of

 3  moneys in the possession or custody of this state to the

 4  contrary notwithstanding.  The benefit account shall consist

 5  of all moneys requisitioned from this state's account in the

 6  Unemployment Compensation Trust Fund.  Except as otherwise

 7  provided, moneys in the clearing and benefit accounts may be

 8  deposited by the Chief Financial Officer Treasurer, under the

 9  direction of the division, in any bank or public depository in

10  which general funds of the state may be deposited, but no

11  public deposit insurance charge or premium may be paid out of

12  the fund.  If any warrant issued against the clearing account

13  or the benefit account is not presented for payment within 1

14  year after issuance thereof, the Chief Financial Officer

15  Comptroller must cancel the same and credit without

16  restriction the amount of such warrant to the account upon

17  which it is drawn. When the payee or person entitled to any

18  warrant so canceled requests payment thereof, the Chief

19  Financial Officer Comptroller, upon direction of the division,

20  must issue a new warrant therefor, to be paid out of the

21  account against which the canceled warrant had been drawn.

22         (3)  Moneys shall be requisitioned from the state's

23  account in the Unemployment Compensation Trust Fund solely for

24  the payment of benefits and extended benefits and in

25  accordance with rules prescribed by the division, except that

26  money credited to this state's account pursuant to s. 903 of

27  the Social Security Act, as amended, shall be used exclusively

28  as provided in subsection (5).  The division, through the

29  Chief Financial Officer Treasurer, shall from time to time

30  requisition from the Unemployment Compensation Trust Fund such

31  amounts, not exceeding the amounts standing to this state's

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 1  account therein, as it deems necessary for the payment of

 2  benefits and extended benefits for a reasonable future period.

 3  Upon receipt thereof, the Chief Financial Officer Treasurer

 4  shall deposit such moneys in the benefit account in the State

 5  Treasury and warrants for the payment of benefits and extended

 6  benefits shall be drawn by the Comptroller upon the order of

 7  the division against such benefit account.  All warrants for

 8  benefits and extended benefits shall be payable directly to

 9  the ultimate beneficiary. Expenditures of such moneys in the

10  benefit account and refunds from the clearing account shall

11  not be subject to any provisions of law requiring specific

12  appropriations or other formal release by state officers of

13  money in their custody. All warrants issued for the payment of

14  benefits and refunds shall bear the signature of the Chief

15  Financial Officer Comptroller as above set forth.  Any balance

16  of moneys requisitioned from the Unemployment Compensation

17  Trust Fund which remains unclaimed or unpaid in the benefit

18  account after the expiration of the period for which such sums

19  were requisitioned shall either be deducted from estimates

20  for, and may be utilized for the payment of, benefits and

21  extended benefits during succeeding periods, or, in the

22  discretion of the division, shall be redeposited with the

23  Secretary of the Treasury of the United States, to the credit

24  of this state's account in the Unemployment Compensation Trust

25  Fund, as provided in subsection (2).

26         (4)  The provisions of subsections (1), (2), and (3),

27  to the extent that they relate to the Unemployment

28  Compensation Trust Fund, shall be operative only so long as

29  such unemployment trust fund continues to exist and so long as

30  the Secretary of the Treasury of the United States continues

31  to maintain for this state a separate book account of all

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 1  funds deposited therein by this state for benefit purposes,

 2  together with this state's proportionate share of the earnings

 3  of such Unemployment Compensation Trust Fund, from which no

 4  other state is permitted to make withdrawals.  If and when

 5  such Unemployment Compensation Trust Fund ceases to exist, or

 6  such separate book account is no longer maintained, all

 7  moneys, properties, or securities therein belonging to the

 8  Unemployment Compensation Trust Fund of this state shall be

 9  transferred to the treasurer of the Unemployment Compensation

10  Trust Fund, who shall hold, invest, transfer, sell, deposit,

11  and release such moneys, properties, or securities in a manner

12  approved by the division in accordance with the provisions of

13  this chapter; however, such moneys shall be invested in the

14  following readily marketable classes of securities:  bonds or

15  other interest-bearing obligations of the United States or of

16  the state.  Further, such investment shall at all times be so

17  made that all the assets of the fund shall always be readily

18  convertible into cash when needed for the payment of benefits.

19  The treasurer shall dispose of securities or other properties

20  belonging to the Unemployment Compensation Trust Fund only

21  under the direction of the division.

22         Section 496.  Subsections (1) and (2) of section

23  443.211, Florida Statutes, are amended to read:

24         443.211  Employment Security Administration Trust Fund;

25  appropriation; reimbursement.--

26         (1)  EMPLOYMENT SECURITY ADMINISTRATION TRUST

27  FUND.--There is created in the State Treasury a special fund

28  to be known as the "Employment Security Administration Trust

29  Fund."  All moneys that are deposited into this fund remain

30  continuously available to the division for expenditure in

31  accordance with the provisions of this chapter and do not

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 1  lapse at any time and may not be transferred to any other

 2  fund.  All moneys in this fund which are received from the

 3  Federal Government or any agency thereof or which are

 4  appropriated by this state for the purposes described in ss.

 5  443.171 and 443.181, except money received under s.

 6  443.191(5)(c), must be expended solely for the purposes and in

 7  the amounts found necessary by the authorized cooperating

 8  federal agencies for the proper and efficient administration

 9  of this chapter. The fund shall consist of all moneys

10  appropriated by this state; all moneys received from the

11  United States or any agency thereof; all moneys received from

12  any other source for such purpose; any moneys received from

13  any agency of the United States or any other state as

14  compensation for services or facilities supplied to such

15  agency; any amounts received pursuant to any surety bond or

16  insurance policy or from other sources for losses sustained by

17  the Employment Security Administration Trust Fund or by reason

18  of damage to equipment or supplies purchased from moneys in

19  such fund; and any proceeds realized from the sale or

20  disposition of any such equipment or supplies which may no

21  longer be necessary for the proper administration of this

22  chapter. Notwithstanding any provision of this section, all

23  money requisitioned and deposited in this fund under s.

24  443.191(5)(c) remains part of the Unemployment Compensation

25  Trust Fund and must be used only in accordance with the

26  conditions specified in s. 443.191(5).  All moneys in this

27  fund must be deposited, administered, and disbursed in the

28  same manner and under the same conditions and requirements as

29  is provided by law for other special funds in the State

30  Treasury.  Such moneys must be secured by the depositary in

31  which they are held to the same extent and in the same manner

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 1  as required by the general depositary law of the state, and

 2  collateral pledged must be maintained in a separate custody

 3  account. All payments from the Employment Security

 4  Administration Trust Fund must be approved by the division or

 5  by a duly authorized agent and must be made by the Chief

 6  Financial Officer Treasurer upon warrants issued by the

 7  Comptroller.  Any balances in this fund do not lapse at any

 8  time and must remain continuously available to the division

 9  for expenditure consistent with this chapter.

10         (2)  SPECIAL EMPLOYMENT SECURITY ADMINISTRATION TRUST

11  FUND.--There is created in the State Treasury a special fund,

12  to be known as the "Special Employment Security Administration

13  Trust Fund," into which shall be deposited or transferred all

14  interest on contributions, penalties, and fines or fees

15  collected under this chapter.  Interest on contributions,

16  penalties, and fines or fees deposited during any calendar

17  quarter in the clearing account in the Unemployment

18  Compensation Trust Fund shall, as soon as practicable after

19  the close of such calendar quarter and upon certification of

20  the division, be transferred to the Special Employment

21  Security Administration Trust Fund.  However, there shall be

22  withheld from any such transfer the amount certified by the

23  division to be required under this chapter to pay refunds of

24  interest on contributions, penalties, and fines or fees

25  collected and erroneously deposited into the clearing account

26  in the Unemployment Compensation Trust Fund.  Such amounts of

27  interest and penalties so certified for transfer shall be

28  deemed to have been erroneously deposited in the clearing

29  account, and the transfer thereof to the Special Employment

30  Security Administration Trust Fund shall be deemed to be a

31  refund of such erroneous deposits. All moneys in this fund

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 1  shall be deposited, administered, and disbursed in the same

 2  manner and under the same conditions and requirements as are

 3  provided by law for other special funds in the State Treasury.

 4  These moneys shall not be expended or be available for

 5  expenditure in any manner which would permit their

 6  substitution for, or permit a corresponding reduction in,

 7  federal funds which would, in the absence of these moneys, be

 8  available to finance expenditures for the administration of

 9  the Unemployment Compensation Law.  But nothing in this

10  section shall prevent these moneys from being used as a

11  revolving fund to cover expenditures, necessary and proper

12  under the law, for which federal funds have been duly

13  requested but not yet received, subject to the charging of

14  such expenditures against such funds when received.  The

15  moneys in this fund, with the approval of the Executive Office

16  of the Governor, shall be used by the Division of Unemployment

17  Compensation and the Agency for Workforce Innovation for the

18  payment of costs of administration which are found not to have

19  been properly and validly chargeable against funds obtained

20  from federal sources. All moneys in the Special Employment

21  Security Administration Trust Fund shall be continuously

22  available to the division for expenditure in accordance with

23  the provisions of this chapter and shall not lapse at any

24  time.  All payments from the Special Employment Security

25  Administration Trust Fund shall be approved by the division or

26  by a duly authorized agent thereof and shall be made by the

27  Chief Financial Officer Treasurer upon warrants issued by the

28  Comptroller. The moneys in this fund are hereby specifically

29  made available to replace, as contemplated by subsection (3),

30  expenditures from the Employment Security Administration Trust

31  Fund, established by subsection (1), which have been found by

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 1  the Bureau of Employment Security, or other authorized federal

 2  agency or authority, because of any action or contingency, to

 3  have been lost or improperly expended.  The Chief Financial

 4  Officer Treasurer shall be liable on her or his official bond

 5  for the faithful performance of her or his duties in

 6  connection with the Special Employment Security Administration

 7  Trust Fund.

 8         Section 497.  Subsection (4) of section 445.0325,

 9  Florida Statutes, is amended to read:

10         445.0325  Welfare Transition Trust Fund.--

11         (4)  All funds transferred to and retained in the trust

12  fund shall be invested pursuant to s. 17.61 s. 18.125. Any

13  interest accruing to the trust fund shall be for the benefit

14  of the welfare transition program. Notwithstanding s. 216.301

15  and pursuant to s. 216.351, any undisbursed balance remaining

16  in the trust fund and interest accruing to the trust fund not

17  distributed at the end of the fiscal year shall remain in the

18  trust fund and shall increase the total funds available to

19  implement the welfare transition program.

20         Section 498.  Section 447.12, Florida Statutes, is

21  amended to read:

22         447.12  Fees for registration.--All fees collected by

23  the department under this part shall be paid to the Chief

24  Financial Officer Treasurer and credited to the General

25  Revenue Fund.

26         Section 499.  Subsection (1) of section 450.155,

27  Florida Statutes, is amended to read:

28         450.155  Child Labor Law Trust Fund.--

29         (1)  There is created in the State Treasury an account

30  to be known as the Child Labor Law Trust Fund. Subject to such

31  appropriations as the Legislature may make therefor from time

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 1  to time, disbursements from this account may be made by the

 2  division, subject to the approval of the department, in order

 3  to carry out the proper responsibilities of administering the

 4  Child Labor Law, to protect the working youth of the state,

 5  and to provide education about the Child Labor Law to

 6  employers, public school employees, the general public, and

 7  working youth. The Child Labor Law Trust Fund and the moneys

 8  deposited therein shall be under the direct supervision and

 9  control of the department, and such moneys may be disbursed by

10  the Chief Financial Officer Treasurer from time to time as

11  determined by the department.

12         Section 500.  Subsections (1) and (2) of section

13  468.392, Florida Statutes, are amended to read:

14         468.392  Auctioneer Recovery Fund.--There is created

15  the Auctioneer Recovery Fund as a separate account in the

16  Professional Regulation Trust Fund.  The fund shall be

17  administered by the Florida Board of Auctioneers.

18         (1)  The Chief Financial Officer Treasurer shall invest

19  the money not currently needed to meet the obligations of the

20  fund in the same manner as other public funds may be invested.

21  Interest that accrues from these investments shall be

22  deposited to the credit of the Auctioneer Recovery Fund and

23  shall be available for the same purposes as other moneys

24  deposited in the Auctioneer Recovery Fund.

25         (2)  All payments and disbursements from the Auctioneer

26  Recovery Fund shall be made by the Chief Financial Officer

27  Treasurer upon a voucher signed by the Secretary of Business

28  and Professional Regulation or the secretary's designee.

29  Amounts transferred to the Auctioneer Recovery Fund shall not

30  be subject to any limitation imposed by an appropriation act

31  of the Legislature.

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 1         Section 501.  Subsection (3) of section 468.529,

 2  Florida Statutes, is amended to read:

 3         468.529  Licensee's insurance; employment tax; benefit

 4  plans.--

 5         (3)  A licensed employee leasing company shall within

 6  30 days of initiation or termination notify its workers'

 7  compensation insurance carrier, the Division of Workers'

 8  Compensation of the Department of Financial Services, and the

 9  Division of Unemployment Compensation of the Department of

10  Labor and Employment Security of both the initiation or the

11  termination of the company's relationship with any client

12  company.

13         Section 502.  Subsection (2) of section 473.3065,

14  Florida Statutes, is amended to read:

15         473.3065  Certified Public Accountant Education

16  Minority Assistance Program; advisory council.--

17         (2)  All moneys used to provide scholarships under the

18  program shall be funded by a portion of existing license fees,

19  as set by the board, not to exceed $10 per license.  Such

20  moneys shall be deposited into the Professional Regulation

21  Trust Fund in a separate account maintained for that purpose.

22  The department is authorized to spend up to $100,000 per year

23  for the program from this program account, but may not

24  allocate overhead charges to it.  Moneys for scholarships

25  shall be disbursed annually upon recommendation of the

26  advisory council and approval by the board, based on the

27  adopted eligibility criteria and comparative evaluation of all

28  applicants. Funds in the program account may be invested by

29  the Chief Financial Officer Treasurer under the same

30  limitations as apply to investment of other state funds, and

31  

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 1  all interest earned thereon shall be credited to the program

 2  account.

 3         Section 503.  Subsection (7) of section 475.045,

 4  Florida Statutes, is amended to read:

 5         475.045  Florida Real Estate Commission Education and

 6  Research Foundation.--

 7         (7)  The Chief Financial Officer Treasurer shall invest

 8  $3 million from the portion of the Professional Regulation

 9  Trust Fund credited to the real estate profession, under the

10  same limitations as applied to investments of other state

11  funds, and the income earned thereon shall be available to the

12  foundation to fund the activities and projects authorized

13  under this section. However, any balance of such interest in

14  excess of $1 million shall revert to the portion of the

15  Professional Regulation Trust Fund credited to the real estate

16  profession.  In the event the foundation is abolished, the

17  funds in the trust fund shall revert to such portion of the

18  Professional Regulation Trust Fund.

19         Section 504.  Subsection (6) of section 475.484,

20  Florida Statutes, is amended to read:

21         475.484  Payment from the fund.--

22         (6)  All payments and disbursements from the Real

23  Estate Recovery Fund shall be made by the Chief Financial

24  Officer Treasurer upon a voucher signed by the secretary of

25  the department.  Amounts transferred to the Real Estate

26  Recovery Fund shall not be subject to any limitation imposed

27  by an appropriation act of the Legislature.

28         Section 505.  Section 475.485, Florida Statutes, is

29  amended to read:

30         475.485  Investment of the fund.--The funds in the Real

31  Estate Recovery Fund may be invested by the Chief Financial

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 1  Officer Treasurer under the same limitations as apply to

 2  investment of other state funds, and the interest earned

 3  thereon shall be deposited to the credit of the Real Estate

 4  Recovery Fund and shall be available for the same purposes as

 5  other moneys deposited in the Real Estate Recovery Fund.

 6         Section 506.  Section 489.114, Florida Statutes, is

 7  amended to read:

 8         489.114  Evidence of workers' compensation

 9  coverage.--Except as provided in s. 489.115(5)(d), any person,

10  business organization, or qualifying agent engaged in the

11  business of contracting in this state and certified or

12  registered under this part shall, as a condition precedent to

13  the issuance or renewal of a certificate, registration, or

14  certificate of authority of the contractor, provide to the

15  Construction Industry Licensing Board, as provided by board

16  rule, evidence of workers' compensation coverage pursuant to

17  chapter 440.  In the event that the Division of Workers'

18  Compensation of the Department of Financial Services Labor and

19  Employment Security receives notice of the cancellation of a

20  policy of workers' compensation insurance insuring a person or

21  entity governed by this section, the Division of Workers'

22  Compensation shall certify and identify all persons or

23  entities by certification or registration license number to

24  the department after verification is made by the Division of

25  Workers' Compensation that persons or entities governed by

26  this section are no longer covered by workers' compensation

27  insurance.  Such certification and verification by the

28  Division of Workers' Compensation may result from records

29  furnished to the Division of Workers' Compensation by the

30  persons or entities governed by this section or an

31  investigation completed by the Division of Workers'

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 1  Compensation.  The department shall notify the persons or

 2  entities governed by this section who have been determined to

 3  be in noncompliance with chapter 440, and the persons or

 4  entities notified shall provide certification of compliance

 5  with chapter 440 to the department and pay an administrative

 6  fine in the amount of $500. The failure to maintain workers'

 7  compensation coverage as required by law shall be grounds for

 8  the board to revoke, suspend, or deny the issuance or renewal

 9  of a certificate, registration, or certificate of authority of

10  the contractor under the provisions of s. 489.129.

11         Section 507.  Section 489.144, Florida Statutes, is

12  amended to read:

13         489.144  Investment of the fund.--The funds in the

14  Construction Industries Recovery Fund may be invested by the

15  Chief Financial Officer Treasurer under the same limitations

16  as apply to the investment of other state funds, and the

17  interest earned thereon shall be deposited to the credit of

18  the Construction Industries Recovery Fund and shall be

19  available for the same purposes as other moneys deposited in

20  the Construction Industries Recovery Fund.

21         Section 508.  Subsection (6) of section 489.145,

22  Florida Statutes, is amended to read:

23         489.145  Guaranteed energy performance savings

24  contracting.--

25         (6)  PROGRAM ADMINISTRATION AND CONTRACT REVIEW.--The

26  Department of Management Services, with the assistance of the

27  Office of the Chief Financial Officer Comptroller, may, within

28  available resources, provide technical assistance to state

29  agencies contracting for energy conservation measures and

30  engage in other activities considered appropriate by the

31  department for promoting and facilitating guaranteed energy

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 1  performance contracting by state agencies. The Office of the

 2  Chief Financial Officer Comptroller, with the assistance of

 3  the Department of Management Services, may, within available

 4  resources, develop model contractual and related documents for

 5  use by state agencies.  Prior to entering into a guaranteed

 6  energy performance savings contract, any contract or lease for

 7  third-party financing, or any combination of such contracts, a

 8  state agency shall submit such proposed contract or lease to

 9  the Office of the Chief Financial Officer Comptroller for

10  review and approval.

11         Section 509.  Section 489.510, Florida Statutes, is

12  amended to read:

13         489.510  Evidence of workers' compensation

14  coverage.--Except as provided in s. 489.515(3)(b), any person,

15  business organization, or qualifying agent engaged in the

16  business of contracting in this state and certified or

17  registered under this part shall, as a condition precedent to

18  the issuance or renewal of a certificate or registration of

19  the contractor, provide to the Electrical Contractors'

20  Licensing Board, as provided by board rule, evidence of

21  workers' compensation coverage pursuant to chapter 440.  In

22  the event that the Division of Workers' Compensation of the

23  Department of Financial Services Labor and Employment Security

24  receives notice of the cancellation of a policy of workers'

25  compensation insurance insuring a person or entity governed by

26  this section, the Division of Workers' Compensation shall

27  certify and identify all persons or entities by certification

28  or registration license number to the department after

29  verification is made by the Division of Workers' Compensation

30  that persons or entities governed by this section are no

31  longer covered by workers' compensation insurance.  Such

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 1  certification and verification by the Division of Workers'

 2  Compensation may result from records furnished to the Division

 3  of Workers' Compensation by the persons or entities governed

 4  by this section or an investigation completed by the Division

 5  of Workers' Compensation. The department shall notify the

 6  persons or entities governed by this section who have been

 7  determined to be in noncompliance with chapter 440, and the

 8  persons or entities notified shall provide certification of

 9  compliance with chapter 440 to the department and pay an

10  administrative fine in the amount of $500. The failure to

11  maintain workers' compensation coverage as required by law

12  shall be grounds for the board to revoke, suspend, or deny the

13  issuance or renewal of a certificate or registration of the

14  contractor under the provisions of s. 489.533.

15         Section 510.  Subsection (5) of section 489.533,

16  Florida Statutes, is amended to read:

17         489.533  Disciplinary proceedings.--

18         (5)  When the board imposes administrative fines

19  pursuant to subsection (2) resulting from violation of chapter

20  633 or violation of the rules of the State Fire Marshal, 50

21  percent of the fine shall be paid into the Insurance

22  Commissioner's Regulatory Trust Fund to help defray the costs

23  of investigating the violations and obtaining the corrective

24  action. The State Fire Marshal may participate at its

25  discretion, but not as a party, in any proceedings before the

26  board relating to violation of chapter 633 or the rules of the

27  State Fire Marshal, in order to make recommendations as to the

28  appropriate penalty in such case. However, the State Fire

29  Marshal shall not have standing to bring disciplinary

30  proceedings regarding certification.

31  

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 1         Section 511.  Subsection (8) of section 494.001,

 2  Florida Statutes, is amended, present subsections (9) through

 3  (29) of that section are renumbered as (10) through (30),

 4  respectively, and a new subsection (9) is added to that

 5  subsection to read:

 6         494.001  Definitions.--As used in ss. 494.001-494.0077,

 7  the term:

 8         (8)  "Commission" means the Financial Services

 9  Commission "Department" means the Department of Banking and

10  Finance.

11         (9)  "Office" means the Office of Financial

12  Institutions and Securities Regulation of the commission.

13         Section 512.  Section 494.0011, Florida Statutes, is

14  amended to read:

15         494.0011  Powers and duties of the commission and

16  office department.--

17         (1)  The office department shall be responsible for the

18  administration and enforcement of ss. 494.001-494.0077.

19         (2)  The commission department has authority to adopt

20  rules pursuant to ss. 120.536(1) and 120.54 to implement ss.

21  494.001-494.0077.  The commission department may adopt rules

22  to allow electronic submission of any forms, documents, or

23  fees required by this act. The commission department may also

24  adopt rules to accept certification of compliance with

25  requirements of this act in lieu of requiring submission of

26  documents.

27         (3)  All fees, charges, and fines collected by the

28  department pursuant to ss. 494.001-494.0077 shall be deposited

29  in the State Treasury to the credit of the Regulatory Trust

30  Fund under the office department.

31  

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 1         (4)(a)  The office department has the power to issue

 2  and to serve subpoenas and subpoenas duces tecum to compel the

 3  attendance of witnesses and the production of all books,

 4  accounts, records, and other documents and materials relevant

 5  to an examination or investigation. The office department, or

 6  its duly authorized representative, has the power to

 7  administer oaths and affirmations to any person.

 8         (b)  The office department may, in its discretion, seek

 9  subpoenas or subpoenas duces tecum from any court of competent

10  jurisdiction commanding the appearance of witnesses and the

11  production of books, accounts, records, and other documents or

12  materials at a time and place named in the subpoenas; and any

13  authorized representative of the office department may serve

14  any subpoena.

15         (5)(a)  In the event of substantial noncompliance with

16  a subpoena or subpoena duces tecum issued or caused to be

17  issued by the office department, the office department may

18  petition the circuit court or any other court of competent

19  jurisdiction of the county in which the person subpoenaed

20  resides or has its principal place of business for an order

21  requiring the subpoenaed person to appear and testify and to

22  produce such books, accounts, records, and other documents as

23  are specified in the subpoena duces tecum.  The court may

24  grant injunctive relief restraining the person from

25  advertising, promoting, soliciting, entering into, offering to

26  enter into, continuing, or completing any mortgage loan

27  transaction or mortgage loan servicing transaction.  The court

28  may grant such other relief, including, but not limited to,

29  the restraint, by injunction or appointment of a receiver, of

30  any transfer, pledge, assignment, or other disposition of the

31  person's assets or any concealment, alteration, destruction,

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 1  or other disposition of books, accounts, records, or other

 2  documents and materials as the court deems appropriate, until

 3  the person has fully complied with the subpoena duces tecum

 4  and the office department has completed its investigation or

 5  examination. In addition, the court may order the refund of

 6  any fees collected in a mortgage loan transaction whenever

 7  books and documents substantiating the transaction are not

 8  produced or cannot be produced. The office department is

 9  entitled to the summary procedure provided in s. 51.011, and

10  the court shall advance such cause on its calendar.

11  Attorney's fees and any other costs incurred by the office

12  department to obtain an order granting, in whole or part, a

13  petition for enforcement of a subpoena or subpoena duces tecum

14  shall be taxed against the subpoenaed person, and failure to

15  comply with such order is a contempt of court.

16         (b)  When it appears to the office department that the

17  compliance with a subpoena or subpoena duces tecum issued or

18  caused to be issued by the office department pursuant to this

19  section is essential and otherwise unavailable to an

20  investigation or examination, the office department, in

21  addition to the other remedies provided for in this section,

22  may apply to the circuit court or any other court of competent

23  jurisdiction of the county in which the subpoenaed person

24  resides or has its principal place of business for a writ of

25  ne exeat. The court shall thereupon direct the issuance of the

26  writ against the subpoenaed person requiring sufficient bond

27  conditioned on compliance with the subpoena or subpoena duces

28  tecum.  The court shall cause to be endorsed on the writ a

29  suitable amount of bond upon the payment of which the person

30  named in the writ shall be freed, having a due regard to the

31  nature of the case.

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 1         (c)  Alternatively, the office department may seek a

 2  writ of attachment from the court having jurisdiction over the

 3  person who has refused to obey a subpoena, who has refused to

 4  give testimony, or who has refused to produce the matters

 5  described in the subpoena duces tecum.

 6         Section 513.  Section 494.0012, Florida Statutes, is

 7  amended to read:

 8         494.0012  Investigations; complaints; examinations.--

 9         (1)  The office department may conduct an investigation

10  of any person whenever the office department has reason to

11  believe, either upon complaint or otherwise, that any

12  violation of ss. 494.001-494.0077 has been committed or is

13  about to be committed.

14         (2)  Any person having reason to believe that a

15  provision of this act has been violated may file a written

16  complaint with the office department setting forth details of

17  the alleged violation.

18         (3)(a)  The office department may, at intermittent

19  periods, conduct examinations of any licensee or other person

20  under the provisions of ss. 494.001-494.0077.

21         (b)  The office department shall conduct all

22  examinations at a convenient location in this state unless the

23  office department determines that it is more effective or

24  cost-efficient to perform an examination at the licensee's

25  out-of-state location. For an examination performed at the

26  licensee's out-of-state location, the licensee shall pay the

27  travel expense and per diem subsistence at the rate provided

28  by law for up to thirty 8-hour days per year for each office

29  department examiner who participates in such an examination.

30  However, if the examination involves or reveals fraudulent

31  conduct by the licensee, the licensee shall pay the travel

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 1  expense and per diem subsistence provided by law, without

 2  limitation, for each participating examiner.

 3         Section 514.  Section 494.00125, Florida Statutes, is

 4  amended to read:

 5         494.00125  Confidentiality of information relating to

 6  investigations and examinations.--

 7         (1)(a)  Except as otherwise provided by this section,

 8  information relative to an investigation or examination by the

 9  office department pursuant to this chapter, including any

10  consumer complaint received by the office or the Department of

11  Financial Services, is confidential and exempt from s.

12  119.07(1) until the investigation or examination is completed

13  or ceases to be active. The information compiled by the office

14  department in such an investigation or examination shall

15  remain confidential and exempt from s. 119.07(1) after the

16  office's department's investigation or examination is

17  completed or ceases to be active if the office department

18  submits the information to any law enforcement or

19  administrative agency for further investigation. Such

20  information shall remain confidential and exempt from s.

21  119.07(1) until that agency's investigation is completed or

22  ceases to be active. For purposes of this section, an

23  investigation or examination shall be considered "active" so

24  long as the office department or any law enforcement or

25  administrative agency is proceeding with reasonable dispatch

26  and has a reasonable good faith belief that the investigation

27  or examination may lead to the filing of an administrative,

28  civil, or criminal proceeding or to the denial or conditional

29  grant of a license. This section shall not be construed to

30  prohibit disclosure of information which is required by law to

31  be filed with the office department and which, but for the

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 1  investigation or examination, would be subject to s.

 2  119.07(1).

 3         (b)  Except as necessary for the office department to

 4  enforce the provisions of this chapter, a consumer complaint

 5  and other information relative to an investigation or

 6  examination shall remain confidential and exempt from s.

 7  119.07(1) after the investigation or examination is completed

 8  or ceases to be active to the extent disclosure would:

 9         1.  Jeopardize the integrity of another active

10  investigation or examination.

11         2.  Reveal the name, address, telephone number, social

12  security number, or any other identifying number or

13  information of any complainant, customer, or account holder.

14         3.  Disclose the identity of a confidential source.

15         4.  Disclose investigative techniques or procedures.

16         5.  Reveal a trade secret as defined in s. 688.002.

17         (c)  In the event that office department personnel are

18  or have been involved in an investigation or examination of

19  such nature as to endanger their lives or physical safety or

20  that of their families, then the home addresses, telephone

21  numbers, places of employment, and photographs of such

22  personnel, together with the home addresses, telephone

23  numbers, photographs, and places of employment of spouses and

24  children of such personnel and the names and locations of

25  schools and day care facilities attended by the children of

26  such personnel are confidential and exempt from s. 119.07(1).

27         (d)  Nothing in this section shall be construed to

28  prohibit the office department from providing information to

29  any law enforcement or administrative agency. Any law

30  enforcement or administrative agency receiving confidential

31  information in connection with its official duties shall

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 1  maintain the confidentiality of the information so long as it

 2  would otherwise be confidential.

 3         (e)  All information obtained by the office department

 4  from any person which is only made available to the office

 5  department on a confidential or similarly restricted basis

 6  shall be confidential and exempt from s. 119.07(1). This

 7  exemption shall not be construed to prohibit disclosure of

 8  information which is required by law to be filed with the

 9  office department or which is otherwise subject to s.

10  119.07(1).

11         (2)  If information subject to subsection (1) is

12  offered in evidence in any administrative, civil, or criminal

13  proceeding, the presiding officer may, in her or his

14  discretion, prevent the disclosure of information which would

15  be confidential pursuant to paragraph (1)(b).

16         (3)  A privilege against civil liability is granted to

17  a person who furnishes information or evidence to the office

18  department, unless such person acts in bad faith or with

19  malice in providing such information or evidence.

20         Section 515.  Section 494.0013, Florida Statutes, is

21  amended to read:

22         494.0013  Injunction to restrain violations.--

23         (1)  The office department may bring action through its

24  own counsel in the name and on behalf of the state against any

25  person who has violated or is about to violate any provision

26  of ss. 494.001-494.0077 or any rule of the commission or order

27  of the office department issued under ss. 494.001-494.0077 to

28  enjoin the person from continuing in or engaging in any act in

29  furtherance of the violation.

30         (2)  In any injunctive proceeding, the court may, on

31  due showing by the office department, issue a subpoena or

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 1  subpoena duces tecum requiring the attendance of any witness

 2  and requiring the production of any books, accounts, records,

 3  or other documents and materials that appear necessary to the

 4  expeditious resolution of the application for injunction.

 5         (3)  In addition to all other means provided by law for

 6  the enforcement of any temporary restraining order, temporary

 7  injunction, or permanent injunction issued in any such court

 8  proceeding, the court has the power and jurisdiction, upon

 9  application of the office department, to impound, and to

10  appoint a receiver or administrator for, the property, assets,

11  and business of the defendant, including, but not limited to,

12  the books, records, documents, and papers appertaining

13  thereto. Such receiver or administrator, when appointed and

14  qualified, has all powers and duties as to custody,

15  collection, administration, winding up, and liquidation of the

16  property and business as are from time to time conferred upon

17  him or her by the court.  In any such action, the court may

18  issue an order staying all pending suits and enjoining any

19  further suits affecting the receiver's or administrator's

20  custody or possession of the property, assets, and business,

21  or the court, in its discretion and with the consent of the

22  chief judge of the circuit, may require that all such suits be

23  assigned to the circuit court judge who appoints the receiver

24  or administrator.

25         Section 516.  Section 494.0014, Florida Statutes, is

26  amended to read:

27         494.0014  Cease and desist orders; refund orders.--

28         (1)  The office department has the power to issue and

29  serve upon any person an order to cease and desist and to take

30  corrective action whenever it has reason to believe the person

31  is violating, has violated, or is about to violate any

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 1  provision of ss. 494.001-494.0077, any rule or order of the

 2  department issued under ss. 494.001-494.0077, or any written

 3  agreement between the person and the office department. All

 4  procedural matters relating to issuance and enforcement of

 5  such a cease and desist order are governed by the

 6  Administrative Procedure Act.

 7         (2)  The office department has the power to order the

 8  refund of any fee directly or indirectly assessed and charged

 9  on a mortgage loan transaction which is unauthorized or

10  exceeds the maximum fee specifically authorized in ss.

11  494.001-494.0077.

12         (3)  The office department may prohibit the association

13  by a mortgage broker business, or the employment by a mortgage

14  lender or correspondent mortgage lender, of any person who has

15  engaged in a pattern of misconduct while an associate of a

16  mortgage brokerage business or an employee of a mortgage

17  lender or correspondent mortgage lender.  For the purpose of

18  this subsection, the term "pattern of misconduct" means the

19  commission of three or more violations of ss. 494.001-494.0077

20  or the provisions of chapter 494 in effect prior to October 1,

21  1991, during any 1-year period or any criminal conviction for

22  violating ss. 494.001-494.0077 or the provisions of chapter

23  494 in effect prior to October 1, 1991.

24         Section 517.  Section 494.0016, Florida Statutes, is

25  amended to read:

26         494.0016  Books, accounts, and records; maintenance;

27  examinations by the office department.--

28         (1)  Each licensee shall maintain, at the principal

29  place of business designated on the license, all books,

30  accounts, records, and documents necessary to determine the

31  licensee's compliance with ss. 494.001-494.0077.

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 1         (2)  The office department may authorize maintenance of

 2  records at a location other than a principal place of

 3  business. The office department may require books, accounts,

 4  and records to be produced and available at a reasonable and

 5  convenient location in this state.

 6         (3)  All books, accounts, records, documents, and

 7  receipts for expenses paid by the licensee on behalf of the

 8  borrower, including each closing statement signed by a

 9  borrower, shall be preserved and kept available for

10  examination by the office department for at least 3 years

11  after the date of original entry.

12         (4)  The commission department may prescribe by rule

13  the minimum information to be shown in the books, accounts,

14  records, and documents of licensees so that such records will

15  enable the office department to determine the licensee's

16  compliance with ss. 494.001-494.0077.

17         Section 518.  Subsection (2) of section 494.00165,

18  Florida Statutes, is amended to read:

19         494.00165  Prohibited advertising; record

20  requirements.--

21         (2)  Each person required to be licensed under this

22  chapter shall maintain a record of samples of each of its

23  advertisements, including commercial scripts of each radio or

24  television broadcast, for examination by the office department

25  for a period of 2 years after the date of publication or

26  broadcast.

27         Section 519.  Section 494.0017, Florida Statutes, is

28  amended to read:

29         494.0017  Mortgage Brokerage Guaranty Fund.--

30         (1)  The office department shall make transfers from

31  the Regulatory Trust Fund to the Mortgage Brokerage Guaranty

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 1  Fund to pay valid claims arising under former ss. 494.042,

 2  494.043, and 494.044, as provided in former s. 494.00171.

 3         (2)  Any money paid to the Mortgage Brokerage Guaranty

 4  Fund in excess of any liability to claimants against the

 5  Mortgage Brokerage Guaranty Fund shall be transferred to the

 6  Regulatory Trust Fund.

 7         (3)  The Mortgage Brokerage Guaranty Fund shall be

 8  disbursed as provided in former s. 494.044, upon approval by

 9  the office department, to any party to a mortgage financing

10  transaction who:

11         (a)  Is adjudged by a court of competent jurisdiction

12  of this state to have suffered monetary damages as a result of

13  any violation of chapter 494 in effect prior to October 1,

14  1991, committed by a licensee or registrant;

15         (b)  Has filed a claim for recovery prior to January 1,

16  1992; and

17         (c)  Has suffered monetary damages as a result of an

18  act occurring prior to October 1, 1991.

19         (4)  Notwithstanding s. 215.965, the office department

20  may disburse funds to a court or court-appointed person for

21  distribution, if the conditions precedent for recovery exist

22  and the distribution would be the fairest and most equitable

23  manner of distributing the funds.

24         Section 520.  Section 494.0021, Florida Statutes, is

25  amended to read:

26         494.0021  Public records.--All audited financial

27  statements submitted pursuant to ss. 494.001-494.0077 are

28  confidential and exempt from the requirements of s. 119.07(1),

29  except that office department employees may have access to

30  such information in the administration and enforcement of ss.

31  494.001-494.0077 and such information may be used by office

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 1  department personnel in the prosecution of violations under

 2  ss. 494.001-494.0077.

 3         Section 521.  Subsections (1), (2), (3), (5), and (7)

 4  of section 494.0025, Florida Statutes, are amended to read:

 5         494.0025  Prohibited practices.--It is unlawful for any

 6  person:

 7         (1)  To act as a mortgage lender in this state without

 8  a current, active license issued by the office department

 9  pursuant to ss. 494.006-494.0077.

10         (2)  To act as a correspondent mortgage lender in this

11  state without a current, active license issued by the office

12  department pursuant to ss. 494.006-494.0077.

13         (3)  To act as a mortgage broker in this state without

14  a current, active license issued by the office department

15  pursuant to ss. 494.003-494.0043.

16         (5)  In any matter within the jurisdiction of the

17  office department, to knowingly and willfully falsify,

18  conceal, or cover up by a trick, scheme, or device a material

19  fact, make any false or fraudulent statement or

20  representation, or make or use any false writing or document,

21  knowing the same to contain any false or fraudulent statement

22  or entry.

23         (7)  Who is required to be licensed under ss.

24  494.006-494.0077, to fail to report to the office department

25  the failure to meet the net worth requirements of s. 494.0061,

26  s. 494.0062, or s. 494.0065 within 48 hours after the person's

27  knowledge of such failure or within 48 hours after the person

28  should have known of such failure.

29         Section 522.  Subsection (3) of section 494.0028,

30  Florida Statutes, is amended to read:

31         494.0028  Arbitration.--

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 1         (3)  All agreements subject to this section shall

 2  provide the noninstitutional investor or borrower with the

 3  option to elect arbitration before the American Arbitration

 4  Association or other independent nonindustry arbitration

 5  forum. Any other nonindustry arbitration forum may apply to

 6  the office department to allow such forum to provide

 7  arbitration services. The office department shall grant the

 8  application if the applicant's fees, practices, and procedures

 9  do not materially differ from those of the American

10  Arbitration Association.

11         Section 523.  Section 494.0029, Florida Statutes, is

12  amended to read:

13         494.0029  Mortgage business schools.--

14         (1)  Each person, school, or institution, except

15  accredited colleges, universities, community colleges, and

16  area technical centers in this state, which offers or conducts

17  mortgage business training as a condition precedent to

18  licensure as a mortgage broker or lender or a correspondent

19  mortgage lender shall obtain a permit from the office

20  department and abide by the regulations imposed upon such

21  person, school, or institution by this chapter and rules

22  adopted pursuant to this chapter. The commission department

23  shall, by rule, recertify the permits annually with initial

24  and renewal permit fees that do not exceed $500 plus the cost

25  of accreditation.

26         (2)  All such schools shall maintain curriculum and

27  training materials necessary to determine the school's

28  compliance with this chapter and rules adopted pursuant to

29  this chapter. Any school that offers or conducts mortgage

30  business training shall at all times maintain an operation of

31  training, materials, and curriculum which is open to review by

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 1  the office department to determine compliance and competency

 2  as a mortgage business school.

 3         (3)(a)  It is unlawful for any such person, school, or

 4  institution to offer or conduct mortgage business courses,

 5  regardless of the number of pupils, without first procuring a

 6  permit or to guarantee that the pupils will pass any mortgage

 7  business examination given on behalf of the office department

 8  or to represent that the issuance of a permit is any

 9  recommendation or endorsement of the person, school, or

10  institution to which it is issued or of any course of

11  instruction given thereunder. Any person who violates this

12  paragraph commits a misdemeanor of the second degree,

13  punishable as provided in s. 775.082 or s. 775.083.

14         (b)  The location of classes and the frequency of class

15  meetings shall be in the discretion of the school offering the

16  courses, if such courses conform to this chapter and related

17  rules adopted by the commission department.

18         (c)  A mortgage business school may not use advertising

19  of any nature which is false, inaccurate, misleading, or

20  exaggerated.  Publicity and advertising of a mortgage business

21  school, or of its representative, shall be based upon relevant

22  facts and supported by evidence establishing their truth.

23         (d)  A representative of a mortgage business school

24  subject to the provisions of this chapter may not promise or

25  guarantee employment or placement of any pupil or prospective

26  pupil, using information, training, or skill purported to be

27  provided or otherwise enhanced by a course or school as

28  inducement to enroll in the school, unless such person offers

29  the pupil or prospective pupil a bona fide contract of

30  employment.

31  

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 1         (e)  A school shall advertise only as a school and

 2  under the permitted name of such school as recognized by the

 3  office department.

 4         (f)  Reference may not be made in any publication or

 5  communication medium as to a pass/fail ratio on mortgage

 6  business examinations by any school permitted by the office

 7  department.

 8         Section 524.  Subsections (1) and (3) of section

 9  494.00295, Florida Statutes, are amended to read:

10         494.00295  Professional education.--

11         (1)  Each mortgage broker, mortgage lender, and

12  correspondent mortgage lender must certify to the office

13  department at the time of renewal that during the 2 years

14  prior to an application for license renewal, all mortgage

15  brokers and the principal representative, loan originators,

16  and associates of a mortgage lender or correspondent mortgage

17  lender have successfully completed at least 14 hours of

18  professional education programs covering primary and

19  subordinate mortgage financing transactions and the provisions

20  of this chapter. Licensees shall maintain records documenting

21  compliance with this subsection for a period of 4 years.

22         (3)  The commission department shall adopt rules

23  necessary to administer this section, including rules

24  governing qualifying hours for professional education programs

25  and standards for electronically transmitted or distance

26  education courses, including course completion requirements.

27         Section 525.  Subsections (1), (2), (4), and (5) of

28  section 494.0031, Florida Statutes, are amended to read:

29         494.0031  Licensure as a mortgage brokerage business.--

30         (1)  The office department shall issue a mortgage

31  brokerage business license to each person who:

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 1         (a)  Has submitted a completed application form and a

 2  nonrefundable application fee of $425; and

 3         (b)  Has a qualified principal broker pursuant to s.

 4  494.0035.

 5         (2)  The commission department may require that each

 6  officer, director, and ultimate equitable owner of a

 7  10-percent or greater interest in the mortgage brokerage

 8  business submit a complete set of fingerprints taken by an

 9  authorized law enforcement officer.

10         (4)  A mortgage brokerage business or branch office

11  license may be canceled if it was issued through mistake or

12  inadvertence of the office department. A notice of

13  cancellation must be issued by the office department within 90

14  days after the issuance of the license. A notice of

15  cancellation shall be effective upon receipt. The notice of

16  cancellation shall provide the applicant with notification of

17  the right to request a hearing within 21 days after the

18  applicant's receipt of the notice of cancellation.  A license

19  shall be reinstated if the applicant can demonstrate that the

20  requirements for obtaining the license pursuant to this

21  chapter have been satisfied.

22         (5)  If an initial mortgage brokerage business or

23  branch office license has been issued but the check upon which

24  the license is based is returned due to insufficient funds,

25  the license shall be deemed canceled. A license deemed

26  canceled pursuant to this subsection shall be reinstated if

27  the office department receives a certified check for the

28  appropriate amount within 30 days after the date the check was

29  returned due to insufficient funds.

30         Section 526.  Section 494.0032, Florida Statutes, is

31  amended to read:

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 1         494.0032  Renewal of mortgage brokerage business

 2  license or branch office license.--

 3         (1)  The office department shall renew a mortgage

 4  brokerage business license upon receipt of a completed renewal

 5  form and payment of a nonrefundable renewal fee of $375.  Each

 6  licensee shall pay at the time of renewal a nonrefundable

 7  renewal fee of $225 for the renewal of each branch office

 8  license.

 9         (2)  The commission department shall adopt rules

10  establishing a procedure for the biennial renewal of mortgage

11  brokerage business licenses and branch office licenses. The

12  commission department may prescribe the form for renewal and

13  may require an update of all information provided in the

14  licensee's initial application.

15         (3)  A mortgage brokerage business or branch office

16  license that is not renewed by the end of the biennium

17  established by the commission department shall revert from

18  active to inactive status.  An inactive license may be

19  reactivated within 6 months after becoming inactive by filing

20  a completed reactivation form with the office department,

21  payment of the renewal fee, and payment of a nonrefundable

22  reactivation fee of $100. A license that is not renewed within

23  6 months after the end of the biennial period automatically

24  expires.

25         Section 527.  Subsections (2), (3), (6), and (7) of

26  section 494.0033, Florida Statutes, are amended to read:

27         494.0033  Mortgage broker's license.--

28         (2)  Each initial application for a mortgage broker's

29  license must be in the form prescribed by rule of the

30  commission department. The commission department may require

31  each applicant to provide any information reasonably necessary

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 1  to make a determination of the applicant's eligibility for

 2  licensure. The office department shall issue an initial

 3  license to any natural person who:

 4         (a)  Is at least 18 years of age;

 5         (b)  Has passed a written test adopted by the office

 6  department which is designed to determine competency in

 7  primary and subordinate mortgage financing transactions as

 8  well as to test knowledge of ss. 494.001-494.0077 and the

 9  rules adopted pursuant thereto;

10         (c)  Has submitted a completed application and a

11  nonrefundable application fee of $200. The commission

12  department may set by rule an additional fee for a retake of

13  the examination; and

14         (d)  Has filed a complete set of fingerprints, taken by

15  an authorized law enforcement officer, for submission by the

16  office department to the Department of Law Enforcement or the

17  Federal Bureau of Investigation for processing.

18         (3)  Any person applying after July 1, 1992, must have

19  completed 24 hours of classroom education on primary and

20  subordinate financing transactions and the laws and rules of

21  ss. 494.001-494.0077 to be eligible for licensure.  The

22  commission department may adopt rules regarding qualifying

23  hours.

24         (6)  A mortgage broker license may be canceled if it

25  was issued through mistake or inadvertence of the office

26  department. A notice of cancellation must be issued by the

27  office department within 90 days after the issuance of the

28  license. A notice of cancellation shall be effective upon

29  receipt. The notice of cancellation shall provide the

30  applicant with notification of the right to request a hearing

31  within 21 days after the applicant's receipt of the notice of

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 1  cancellation. A license shall be reinstated if the applicant

 2  can demonstrate that the requirements for obtaining the

 3  license pursuant to this chapter have been satisfied.

 4         (7)  If an initial mortgage broker license has been

 5  issued but the check upon which the license is based is

 6  returned due to insufficient funds, the license shall be

 7  deemed canceled. A license deemed canceled pursuant to this

 8  subsection shall be reinstated if the office department

 9  receives a certified check for the appropriate amount within

10  30 days after the date the check was returned due to

11  insufficient funds.

12         Section 528.  Section 494.0034, Florida Statutes, is

13  amended to read:

14         494.0034  Renewal of mortgage broker's license.--

15         (1)  The office department shall renew a mortgage

16  broker license upon receipt of the completed renewal form,

17  certification of compliance with continuing education

18  requirements of s. 494.00295, and payment of a nonrefundable

19  renewal fee of $150.

20         (2)  The commission department shall adopt rules

21  establishing a procedure for the biennial renewal of mortgage

22  broker's licenses. The commission department may prescribe the

23  form of the renewal application and may require an update of

24  information since the licensee's last renewal.

25         (3)  A license that is not renewed by the end of the

26  biennium prescribed by the commission department shall revert

27  from active to inactive status. An inactive license may be

28  reactivated within 2 years after becoming inactive by filing a

29  completed reactivation form with the office department,

30  payment of the renewal fee, and payment of a nonrefundable

31  

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 1  reactivation fee of $100. A license that is not renewed within

 2  2 years after becoming inactive automatically expires.

 3         Section 529.  Section 494.0035, Florida Statutes, is

 4  amended to read:

 5         494.0035  Principal broker and branch broker

 6  requirements.--

 7         (1)  Each mortgage brokerage business must have a

 8  principal broker who shall operate the business under such

 9  broker's full charge, control, and supervision. The principal

10  broker must have been a licensed mortgage broker pursuant to

11  s. 494.0033 for at least 1 year prior to being designated as a

12  principal broker, or shall demonstrate to the satisfaction of

13  the office department that such principal broker has been

14  actively engaged in a mortgage-related business for at least 1

15  year prior to being designated as a principal broker. Each

16  mortgage brokerage business shall maintain a form as

17  prescribed by the commission department indicating the

18  business's designation of principal broker and the

19  individual's acceptance of such responsibility. If the form is

20  unavailable, inaccurate, or incomplete, it is deemed that the

21  business was operated in the full charge, control, and

22  supervision by each officer, director, or ultimate equitable

23  owner of a 10-percent or greater interest in the mortgage

24  brokerage business, or any other person in a similar capacity.

25         (2)  Each branch office of a mortgage brokerage

26  business must have a designated branch broker who shall

27  operate the business under such broker's full charge, control,

28  and supervision. The designated branch broker must be a

29  licensed mortgage broker pursuant to s. 494.0033.  Each branch

30  office shall maintain a form as prescribed by the commission

31  department logging the branch's designation of a branch broker

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 1  and the individual's acceptance of such responsibility.  If

 2  the form is unavailable, inaccurate, or incomplete, it is

 3  deemed that the branch was operated in the full charge,

 4  control, and supervision by each officer, director, or

 5  ultimate equitable owner of a 10-percent or greater interest

 6  in the mortgage brokerage business, or any other person in a

 7  similar capacity.

 8         Section 530.  Subsection (2) of section 494.0036,

 9  Florida Statutes, is amended to read:

10         494.0036  Mortgage brokerage business branch offices.--

11         (2)  The office department shall issue a mortgage

12  brokerage business branch office license upon receipt of a

13  completed application in a form as prescribed by commission

14  department rule and payment of an initial nonrefundable branch

15  office license fee of $225. Branch office licenses must be

16  renewed in conjunction with the renewal of the mortgage

17  brokerage business license. The branch office license shall be

18  issued in the name of the mortgage brokerage business that

19  maintains the branch office.

20         Section 531.  Paragraph (c) of subsection (1) of

21  section 494.0038, Florida Statutes, is amended to read:

22         494.0038  Mortgage broker disclosures.--

23         (1)

24         (c)  The commission department may prescribe by rule

25  the form of disclosure of brokerage fees.

26         Section 532.  Subsections (2), (3), (4), and (6) of

27  section 494.004, Florida Statutes, are amended to read:

28         494.004  Requirements of licensees.--

29         (2)  Each licensee under ss. 494.003-494.0043 shall

30  report, in a form prescribed by rule of the commission

31  department, any conviction of, or plea of nolo contendere to,

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 1  regardless of whether adjudication is withheld, any felony

 2  committed by the licensee or any natural person named in s.

 3  494.0031(3), not later than 30 days after the date of

 4  conviction or the date the plea of nolo contendere is entered.

 5         (3)  Each licensee under ss. 494.003-494.0043 shall

 6  report any action in bankruptcy, voluntary or involuntary, to

 7  the office department not later than 7 business days after the

 8  action is instituted.

 9         (4)  Each licensee under ss. 494.003-494.0043 shall

10  report any change in the form of business organization or any

11  change of a person named, pursuant to s. 494.0031(3), to the

12  office department in writing not later than 30 days after the

13  change is effective.

14         (6)  On or before April 30, 2000, each mortgage

15  brokerage business shall file an initial report stating the

16  name, social security number, date of birth, mortgage broker

17  license number, date of hire and, if applicable, date of

18  termination for each person who was an associate of the

19  mortgage brokerage business during the immediate preceding

20  quarter. Thereafter, a mortgage brokerage business shall file

21  a quarterly report only if a person became an associate or

22  ceased to be an associate of the mortgage brokerage business

23  during the immediate preceding quarter. Such report shall be

24  filed within 30 days after the last day of each calendar

25  quarter and shall contain the name, social security number,

26  date of birth, mortgage broker license number, date of hire

27  and, if applicable, the date of termination of each person who

28  became or ceased to be an associate of the mortgage brokerage

29  business during the immediate preceding quarter. The

30  commission department shall prescribe, by rule, the procedures

31  for filing reports required by this subsection.

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 1         Section 533.  Subsection (1) and paragraphs (j), (m),

 2  and (n) of subsection (2) of section 494.0041, Florida

 3  Statutes, are amended to read:

 4         494.0041  Administrative penalties and fines; license

 5  violations.--

 6         (1)  Whenever the office department finds a person in

 7  violation of an act specified in subsection (2), it may enter

 8  an order imposing one or more of the following penalties

 9  against the person:

10         (a)  Revocation of a license or registration.

11         (b)  Suspension of a license or registration subject to

12  reinstatement upon satisfying all reasonable conditions that

13  the office department specifies.

14         (c)  Placement of the licensee, registrant, or

15  applicant on probation for a period of time and subject to all

16  reasonable conditions that the office department specifies.

17         (d)  Issuance of a reprimand.

18         (e)  Imposition of a fine in an amount not exceeding

19  $5,000 for each count or separate offense.

20         (f)  Denial of a license or registration.

21         (2)  Each of the following acts constitutes a ground

22  for which the disciplinary actions specified in subsection (1)

23  may be taken:

24         (j)  Failure to comply with any department order or

25  rule made or issued under ss. 494.001-494.0077.

26         (m)  Failure to maintain, preserve, and keep available

27  for examination all books, accounts, or other documents

28  required by ss. 494.001-494.0077 and the rules of the

29  commission department.

30  

31  

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 1         (n)  Refusal to permit an investigation or examination

 2  of books and records, or refusal to comply with an office a

 3  department subpoena or subpoena duces tecum.

 4         Section 534.  Subsection (7) of section 494.00421,

 5  Florida Statutes, is amended to read:

 6         494.00421  Fees earned upon obtaining a bona fide

 7  commitment.--Notwithstanding the provisions of ss.

 8  494.001-494.0077, any mortgage brokerage business which

 9  contracts to receive from a borrower a mortgage brokerage fee

10  upon obtaining a bona fide commitment shall accurately

11  disclose in the mortgage brokerage agreement:

12         (7)(a)  The following statement, in no less than

13  12-point boldface type immediately above the signature lines

14  for the borrowers:

15  

16  "You are entering into a contract with a mortgage brokerage

17  business to obtain a bona fide mortgage loan commitment under

18  the same terms and conditions as stated hereinabove or in a

19  separate executed good faith estimate form.  If the mortgage

20  brokerage business obtains a bona fide commitment under the

21  same terms and conditions, you will be obligated to pay the

22  mortgage brokerage business fees, including, but not limited

23  to, a mortgage brokerage fee, even if you choose not to

24  complete the loan transaction.  If the provisions of s.

25  494.00421, Florida Statutes, are not met, the mortgage

26  brokerage fee can only be earned upon the funding of the

27  mortgage loan.  The borrower may contact the Department of

28  Financial Services Banking and Finance, Tallahassee, Florida,

29  regarding any complaints that the borrower may have against

30  the mortgage broker or the mortgage brokerage business. The

31  

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 1  telephone number of the department as set by rule of the

 2  department is:  ...[insert telephone number]...."

 3         (b)  Paragraph (a) does not apply to nonresidential

 4  mortgage loan commitments in excess of $1 million.

 5         Section 535.  Subsections (1), (3), (6), (7), (8), (9),

 6  and (10) of section 494.0061, Florida Statutes, are amended to

 7  read:

 8         494.0061  Mortgage lender's license requirements.--

 9         (1)  The commission or office department may require

10  each applicant for a mortgage lender license to provide any

11  information reasonably necessary to make a determination of

12  the applicant's eligibility for licensure. The office

13  department shall issue an initial mortgage lender license to

14  any person that submits:

15         (a)  A completed application form;

16         (b)  A nonrefundable application fee of $575;

17         (c)  Audited financial statements, which documents

18  disclose that the applicant has a bona fide and verifiable net

19  worth, pursuant to generally accepted accounting principles,

20  of at least $250,000, which must be continuously maintained as

21  a condition of licensure;

22         (d)  A surety bond in the amount of $10,000, payable to

23  the state and conditioned upon compliance with ss.

24  494.001-494.0077, which inures to the office department and

25  which must be continuously maintained thereafter in full

26  force;

27         (e)  Documentation that the applicant is duly

28  incorporated, registered, or otherwise formed as a general

29  partnership, limited partnership, limited liability company,

30  or other lawful entity under the laws of this state or another

31  state of the United States; and

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 1         (f)  For applications submitted after October 1, 2001,

 2  proof that the applicant's principal representative has

 3  completed 24 hours of classroom instruction in primary and

 4  subordinate financing transactions and in the provisions of

 5  this chapter and rules adopted under this chapter.

 6         (3)  Each initial application for a mortgage lender's

 7  license must be in a form prescribed by the commission

 8  department. The commission or office department may require

 9  each applicant to provide any information reasonably necessary

10  to make a determination of the applicant's eligibility for

11  licensure. The commission or office department may require

12  that each officer, director, and ultimate equitable owner of a

13  10-percent or greater interest in the applicant submit a

14  complete set of fingerprints taken by an authorized law

15  enforcement officer.

16         (6)  A mortgage lender or branch office license may be

17  canceled if it was issued through mistake or inadvertence of

18  the office department. A notice of cancellation must be issued

19  by the office department within 90 days after the issuance of

20  the license. A notice of cancellation shall be effective upon

21  receipt. The notice of cancellation shall provide the

22  applicant with notification of the right to request a hearing

23  within 21 days after the applicant's receipt of the notice of

24  cancellation. A license shall be reinstated if the applicant

25  can demonstrate that the requirements for obtaining the

26  license pursuant to this chapter have been satisfied.

27         (7)  If an initial mortgage lender or branch office

28  license has been issued but the check upon which the license

29  is based is returned due to insufficient funds, the license

30  shall be deemed canceled. A license deemed canceled pursuant

31  to this subsection shall be reinstated if the office

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 1  department receives a certified check for the appropriate

 2  amount within 30 days after the date the check was returned

 3  due to insufficient funds.

 4         (8)  Each lender, regardless of the number of branches

 5  it operates, shall designate a principal representative who

 6  exercises control of the licensee's business and shall

 7  maintain a form prescribed by the commission department

 8  designating the principal representative. If the form is not

 9  accurately maintained, the business is considered to be

10  operated by each officer, director, or equitable owner of a

11  10-percent or greater interest in the business.

12         (9)  After October 1, 2001, an applicant's principal

13  representative must pass a written test prescribed by the

14  commission department which covers primary and subordinate

15  mortgage financing transactions and the provisions of this

16  chapter and rules adopted under this chapter.

17         (10)  A lender shall notify the office department of

18  the name and address of any new principal representative and

19  shall document that the person has completed the educational

20  and testing requirements of this section upon the designation

21  of a new principal representative.

22         Section 536.  Subsections (1), (3), (9), (10), (11),

23  (12), and (13) of section 494.0062, Florida Statutes, are

24  amended to read:

25         494.0062  Correspondent mortgage lender's license

26  requirements.--

27         (1)  The office department shall issue an initial

28  correspondent mortgage lender license to any person who

29  submits:

30         (a)  A completed application form;

31         (b)  A nonrefundable application fee of $500;

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 1         (c)  Audited financial statements, which document that

 2  the application has a bona fide and verifiable net worth

 3  pursuant to generally accepted accounting principles of

 4  $25,000 or more, which must be continuously maintained as a

 5  condition of licensure;

 6         (d)  A surety bond in the amount of $10,000, payable to

 7  the State of Florida and conditioned upon compliance with ss.

 8  494.001-494.0077, which inures to the office department and

 9  which must be continuously maintained, thereafter, in full

10  force;

11         (e)  Documentation that the applicant is duly

12  incorporated, registered, or otherwise formed as a general

13  partnership, limited partnership, limited liability company,

14  or other lawful entity under the laws of this state or another

15  state of the United States; and

16         (f)  For applications filed after October 1, 2001,

17  proof that the applicant's principal representative has

18  completed 24 hours of classroom instruction in primary and

19  subordinate financing transactions and in the provisions of

20  this chapter and rules enacted under this chapter.

21         (3)  Each initial application for a correspondent

22  mortgage lender's license must be in a form prescribed by the

23  commission department. The commission or office department may

24  require each applicant to provide any information reasonably

25  necessary to make a determination of the applicant's

26  eligibility for licensure. The commission or office department

27  may require that each officer, director, and ultimate

28  equitable owner of a 10-percent or greater interest submit a

29  complete set of fingerprints taken by an authorized law

30  enforcement officer.

31  

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 1         (9)  A correspondent mortgage lender or branch office

 2  license may be canceled if it was issued through mistake or

 3  inadvertence of the office department. A notice of

 4  cancellation must be issued by the office department within 90

 5  days after the issuance of the license. A notice of

 6  cancellation shall be effective upon receipt. The notice of

 7  cancellation shall provide the applicant with notification of

 8  the right to request a hearing within 21 days after the

 9  applicant's receipt of the notice of cancellation. A license

10  shall be reinstated if the applicant can demonstrate that the

11  requirements for obtaining the license pursuant to this

12  chapter have been satisfied.

13         (10)  If an initial correspondent mortgage lender or

14  branch office license has been issued but the check upon which

15  the license is based is returned due to insufficient funds,

16  the license shall be deemed canceled. A license deemed

17  canceled pursuant to this subsection shall be reinstated if

18  the office department receives a certified check for the

19  appropriate amount within 30 days after the date the check was

20  returned due to insufficient funds.

21         (11)  Each correspondent lender shall designate a

22  principal representative who exercises control over the

23  business and shall maintain a form prescribed by the

24  commission department designating the principal

25  representative. If the form is not accurately maintained, the

26  business is considered to be operated by each officer,

27  director, or equitable owner of a 10-percent or greater

28  interest in the business.

29         (12)  After October 1, 2001, an applicant's principal

30  representative must pass a written test prescribed by the

31  commission department which covers primary and subordinate

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 1  mortgage financing transactions and the provisions of this

 2  chapter and rules adopted under this chapter.

 3         (13)  A correspondent lender shall notify the office

 4  department of the name and address of any new principal

 5  representative and shall document that such person has

 6  completed the educational and testing requirements of this

 7  section upon the lender's designation of a new principal

 8  representative.

 9         Section 537.  Section 494.0064, Florida Statutes, is

10  amended to read:

11         494.0064  Renewal of mortgage lender's license; branch

12  office license renewal.--

13         (1)(a)  The office department shall renew a mortgage

14  lender license upon receipt of a completed renewal form and

15  the nonrefundable renewal fee of $575. The office department

16  shall renew a correspondent lender license upon receipt of a

17  completed renewal form and a nonrefundable renewal fee of

18  $475.  Each licensee shall pay at the time of renewal a

19  nonrefundable fee of $325 for the renewal of each branch

20  office license.

21         (b)  A licensee shall also submit, as part of the

22  renewal form, certification that during the preceding 2 years

23  the licensee's principal representative, loan originators, and

24  associates have completed the education requirements of s.

25  494.00295.

26         (2)  The commission department shall adopt rules

27  establishing a procedure for the biennial renewal of mortgage

28  lender's licenses, correspondent lender's licenses, and branch

29  office permits. The commission department may prescribe the

30  form for renewal and may require an update of all information

31  provided in the licensee's initial application.

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 1         (3)  The license of a mortgage lender, correspondent

 2  mortgage lender, or branch office that is not renewed by the

 3  end of the biennium prescribed by the commission department

 4  automatically reverts to inactive status. An inactive license

 5  may be reactivated within 6 months after becoming inactive by

 6  filing a completed reactivation form with the office

 7  department, payment of the appropriate renewal fee, and

 8  payment of a nonrefundable reactivation fee of $100.  A

 9  license that is not renewed within 6 months after the end of

10  the biennial period automatically expires.

11         (4)  The commission department may adopt rules setting

12  forth the evidence or documentation of minimum net worth to be

13  submitted for renewal of a license.

14         Section 538.  Paragraph (a) of subsection (1) and

15  subsections (2), (3), (5), and (8) of section 494.0065,

16  Florida Statutes, are amended to read:

17         494.0065  Saving clause.--

18         (1)(a)  Any person in good standing who holds an active

19  registration pursuant to former s. 494.039 or license pursuant

20  to former s. 521.205, or any person who acted solely as a

21  mortgage servicer on September 30, 1991, is eligible to apply

22  to the office department for a mortgage lender's license and

23  is eligible for licensure if the applicant:

24         1.  For at least 12 months during the period of October

25  1, 1989, through September 30, 1991, has engaged in the

26  business of either acting as a seller or assignor of mortgage

27  loans or as a servicer of mortgage loans, or both;

28         2.  Has documented a minimum net worth of $25,000 in

29  audited financial statements; and

30         3.  Has applied for licensure pursuant to this section

31  by January 1, 1992, and paid an application fee of $100.

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 1         (2)  A licensee issued a license pursuant to subsection

 2  (1) may renew its mortgage lending license if it documents a

 3  minimum net worth of $25,000, according to generally accepted

 4  accounting principles, which must be continuously maintained

 5  as a condition to licensure. The office department shall

 6  require an audited financial statement which documents such

 7  net worth.

 8         (3)  The commission department may prescribe by rule

 9  forms and procedures for application for licensure, and

10  amendment and withdrawal of application for licensure, or

11  transfer, including any existing branch offices, in accordance

12  with subsections (4) and (5), and for renewal of licensure of

13  licensees under this section.

14         (5)  The commission or office department may require

15  each applicant for any transfer to provide any information

16  reasonably necessary to make a determination of the

17  applicant's eligibility for licensure. The office department

18  shall issue the transfer of licensure to any person who

19  submits the following documentation at least 90 days prior to

20  the anticipated transfer:

21         (a)  A completed application form.

22         (b)  A nonrefundable fee set by rule of the commission

23  department in the amount of $500.

24         (c)  Audited financial statements that substantiate

25  that the applicant has a bona fide and verifiable net worth,

26  according to generally accepted accounting principles, of at

27  least $25,000, which must be continuously maintained as a

28  condition of licensure.

29         (d)  Documentation that the applicant is incorporated,

30  registered, or otherwise formed as a general partnership,

31  limited partnership, limited liability company, or other

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 1  lawful entity under the laws of this state or another state of

 2  the United States.

 3  

 4  The commission or office department may require that each

 5  officer, director, and ultimate equitable owner of a

 6  10-percent or greater interest in the applicant submit a

 7  complete set of fingerprints taken by an authorized law

 8  enforcement officer.

 9         (8)  The department shall require Each person applying

10  for a transfer of any branch office pursuant to subsection (4)

11  must of this section to comply with the requirements of s.

12  494.0066.

13         Section 539.  Subsection (2) of section 494.0066,

14  Florida Statutes, is amended to read:

15         494.0066  Branch offices.--

16         (2)  The office department shall issue a branch office

17  license upon receipt of a completed application form as

18  prescribed by rule by the commission department and an initial

19  nonrefundable branch office license fee of $325. The branch

20  office application must include the name and license number of

21  the licensee under ss. 494.006-494.0077, the name of the

22  licensee's employee in charge of the branch office, and the

23  address of the branch office.  The branch office license shall

24  be issued in the name of the licensee under ss.

25  494.006-494.0077 and must be renewed in conjunction with the

26  license renewal.

27         Section 540.  Subsections (4), (5), (6), (8), and (9)

28  of section 494.0067, Florida Statutes, are amended to read:

29         494.0067  Requirements of licensees under ss.

30  494.006-494.0077.--

31  

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 1         (4)  The commission or office department may require

 2  each licensee under ss. 494.006-494.0077 to report any change

 3  of address of the principal place of business, change of

 4  address of any branch office, or change of principal officer,

 5  director, or ultimate equitable owner of 10 percent or more of

 6  the licensed corporation to the office department in a form

 7  prescribed by rule of the commission department not later than

 8  30 business days after the change is effective.

 9         (5)  Each licensee under ss. 494.006-494.0077 shall

10  report in a form prescribed by rule by the commission

11  department any indictment, information, charge, conviction,

12  plea of nolo contendere, or plea of guilty to any crime or

13  administrative violation that involves fraud, dishonest

14  dealing, or any other act of moral turpitude, in any

15  jurisdiction, by the licensee under ss. 494.006-494.0077 or

16  any principal officer, director, or ultimate equitable owner

17  of 10 percent or more of the licensed corporation, not later

18  than 30 business days after the indictment, information,

19  charge, conviction, or final administrative action.

20         (6)  Each licensee under ss. 494.006-494.0077 shall

21  report any action in bankruptcy, voluntary or involuntary, to

22  the office department, not later than 7 business days after

23  the action is instituted.

24         (8)  Each licensee under ss. 494.006-494.0077 shall

25  provide an applicant for a mortgage loan a good faith estimate

26  of the costs the applicant can reasonably expect to pay in

27  obtaining a mortgage loan.  The good faith estimate of costs

28  shall be mailed or delivered to the applicant within a

29  reasonable time after the licensee receives a written loan

30  application from the applicant. The estimate of costs may be

31  provided to the applicant by a person other than the licensee

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 1  making the loan. The commission department may adopt rules

 2  that set forth the disclosure requirements of this section.

 3         (9)  On or before April 30, 2000, each mortgage lender

 4  or correspondent mortgage lender shall file an initial report

 5  stating the full legal name, residential address, social

 6  security number, date of birth, mortgage broker license

 7  number, date of hire, and, if applicable, date of termination

 8  for each person who acted as a loan originator or an associate

 9  of the mortgage lender or correspondent mortgage lender during

10  the immediate preceding quarter.   Thereafter, a mortgage

11  lender or correspondent mortgage lender shall file a report

12  only if a person became or ceased to be a loan originator or

13  an associate of the mortgage lender or correspondent mortgage

14  lender during the immediate preceding quarter.  Such report

15  shall be filed within 30 days after the last day of each

16  calendar quarter and shall contain the full legal name,

17  residential address, social security number, date of birth,

18  date of hire and, if applicable, the mortgage broker license

19  number and date of termination of each person who became or

20  ceased to be a loan originator or an associate of the mortgage

21  lender or correspondent mortgage lender during the immediate

22  preceding quarter. The commission department shall prescribe,

23  by rule, the procedures for filing reports required by this

24  subsection.

25         Section 541.  Subsection (6) of section 494.0069,

26  Florida Statutes, is amended to read:

27         494.0069  Lock-in agreement.--

28         (6)  The commission department may adopt by rule a form

29  for required lock-in agreement disclosures.

30  

31  

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 1         Section 542.  Subsection (1) and paragraphs (j), (m),

 2  and (n) of subsection (2) of section 494.0072, Florida

 3  Statutes, are amended to read:

 4         494.0072  Administrative penalties and fines; license

 5  violations.--

 6         (1)  Whenever the office department finds a person in

 7  violation of an act specified in subsection (2), it may enter

 8  an order imposing one or more of the following penalties

 9  against that person:

10         (a)  Revocation of a license or registration.

11         (b)  Suspension of a license or registration, subject

12  to reinstatement upon satisfying all reasonable conditions

13  that the office department specifies.

14         (c)  Placement of the licensee or applicant on

15  probation for a period of time and subject to all reasonable

16  conditions that the office department specifies.

17         (d)  Issuance of a reprimand.

18         (e)  Imposition of a fine in an amount not exceeding

19  $5,000 for each count or separate offense.

20         (f)  Denial of a license or registration.

21         (2)

22         (j)  Failure to comply with any department order or

23  rule made or issued under the provisions of ss.

24  494.001-494.0077.

25         (m)  Failure to maintain, preserve, and keep available

26  for examination all books, accounts, or other documents

27  required by ss. 494.001-494.0077 or the rules of the

28  commission department.

29         (n)  Refusal to permit an investigation or examination

30  of books and records, or refusal to comply with an office a

31  department subpoena or subpoena duces tecum.

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 1         Section 543.  Subsection (2) of section 494.00721,

 2  Florida Statutes, is amended to read:

 3         494.00721  Net worth.--

 4         (2)  If a mortgage lender or correspondent mortgage

 5  lender fails to satisfy the net worth requirements, the

 6  mortgage lender or correspondent mortgage lender shall

 7  immediately cease taking any new mortgage loan applications.

 8  Thereafter, the mortgage lender or correspondent mortgage

 9  lender shall have up to 60 days within which to satisfy the

10  net worth requirements. If the licensee makes the office

11  department aware, prior to an examination, that the licensee

12  no longer meets the net worth requirements, the mortgage

13  lender or correspondent mortgage lender shall have 120 days

14  within which to satisfy the net worth requirements. A mortgage

15  lender or correspondent mortgage lender shall not resume

16  acting as a mortgage lender or correspondent mortgage lender

17  without written authorization from the office department,

18  which authorization shall be granted if the mortgage lender or

19  correspondent mortgage lender provides the office department

20  with documentation which satisfies the requirements of s.

21  494.0061(1)(c), s. 494.0062(1)(c), or s. 494.0065(2),

22  whichever is applicable.

23         Section 544.  Paragraph (b) of subsection (2) of

24  section 494.0076, Florida Statutes, is amended to read:

25         494.0076  Servicing audits.--

26         (2)

27         (b)  The commission may department is authorized to

28  adopt rules to ensure that investors are adequately protected

29  under this subsection.

30         Section 545.  Subsection (5) of section 494.0079,

31  Florida Statutes, is amended, present subsections (6) and (7)

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 1  of that section are renumbered as (7) and (8), respectively,

 2  and a new subsection (6) is added to that section to read:

 3         494.0079  Definitions.--As used in this act:

 4         (5)  "Commission" means the Financial Services

 5  Commission "Department" means the Department of Banking and

 6  Finance.

 7         (6)  "Office" means the Office of Financial

 8  Institutions and Securities Regulation of the commission.

 9         Section 546.  Section 494.00795, Florida Statutes, is

10  amended to read:

11         494.00795  Powers and duties of the commission and

12  office Department of Banking and Finance; investigations;

13  examinations; injunctions; orders.--

14         (1)(a)  The commission and office are department shall

15  be responsible for the administration and enforcement of this

16  act.

17         (b)  The commission department may adopt rules pursuant

18  to ss. 120.536(1) and 120.54 to implement this act. The

19  commission department may adopt rules to allow electronic

20  submission of any forms, documents, or fees required by this

21  act.

22         (2)(a)  The office department may conduct an

23  investigation of any person whenever the office department has

24  reason to believe, upon complaint or otherwise, that any

25  violation of the act has occurred.

26         (b)  Any person having reason to believe that a

27  provision of this act has been violated may file a written

28  complaint with the office department setting forth the details

29  of the alleged violation.

30         (c)  The office department may conduct examinations of

31  any person to determine compliance with this act.

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 1         (3)(a)  The office department may bring action, through

 2  its own counsel in the name and on behalf of the state,

 3  against any person who has violated or is about to violate any

 4  provision of this act, or any rule or order of the department

 5  issued under the act, to enjoin the person from continuing in

 6  or engaging in any act in furtherance of the violation.

 7         (b)  In any injunctive proceeding, the court may, on

 8  due showing by the office department, issue a subpoena or

 9  subpoena duces tecum requiring the attendance of any witness

10  and requiring the production of any books, accounts, records,

11  or other documents and materials that appear necessary to the

12  expeditious resolution of the application for injunction.

13         (4)  The office department may issue and serve upon any

14  person an order to cease and desist and to take corrective

15  action whenever the office department has reason to believe

16  the person is violating, has violated, or is about to violate

17  any provision of this act, any rule or order of the department

18  issued under this act, or any written agreement between the

19  person and the office department. All procedural matters

20  relating to issuance and enforcement of cease and desist

21  orders are governed by the Administrative Procedure Act.

22         (5)  Whenever the office department finds a person in

23  violation of this act, it may enter an order imposing a fine

24  in an amount not exceeding $5,000 for each count or separate

25  offense, provided that the aggregate fine for all violations

26  of this act that could have been asserted at the time of the

27  order imposing the fine shall not exceed $500,000.

28         (6)  Any violation of this act shall also be deemed to

29  be a violation of chapter 494, chapter 516, chapter 520,

30  chapter 655, chapter 657, chapter 658, chapter 660, chapter

31  

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 1  663, chapter 665, or chapter 667. The commission department

 2  may adopt rules to enforce this subsection.

 3         Section 547.  Section 494.00797, Florida Statutes, is

 4  amended to read:

 5         494.00797  General rule.--All counties and

 6  municipalities of this state are prohibited from enacting and

 7  enforcing ordinances, resolutions, and rules regulating

 8  financial or lending activities, including ordinances,

 9  resolutions, and rules disqualifying persons from doing

10  business with a city, county, or municipality based upon

11  lending interest rates or imposing reporting requirements or

12  any other obligations upon persons regarding financial

13  services or lending practices of persons or entities, and any

14  subsidiaries or affiliates thereof, who:

15         (1)  Are subject to the jurisdiction of the office

16  department, including for activities subject to this chapter,

17  except entities licensed under s. 537.004;

18         (2)  Are subject to the jurisdiction of the Office of

19  Thrift Supervision, the Office of the Comptroller of the

20  Currency, the National Credit Union Administration, the

21  Federal Deposit Insurance Corporation, the Federal Trade

22  Commission, or the United States Department of Housing and

23  Urban Development;

24         (3)  Originate, purchase, sell, assign, secure, or

25  service property interests or obligations created by financial

26  transactions or loans made, executed, or originated by persons

27  referred to in subsection (1) or subsection (2) to assist or

28  facilitate such transactions;

29         (4)  Are chartered by the United States Congress to

30  engage in secondary market mortgage transactions; or

31  

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 1         (5)  Are created by the Florida Housing Finance

 2  Corporation.

 3  

 4  Proof of noncompliance with this act can be used by a city,

 5  county, or municipality of this state to disqualify a vendor

 6  or contractor from doing business with a city, county, or

 7  municipality of this state.

 8         Section 548.  Subsection (16) of section 497.005,

 9  Florida Statutes, is amended to read:

10         497.005  Definitions.--As used in this chapter:

11         (16)  "Department" means the Department of Financial

12  Services Banking and Finance.

13         Section 549.  Subsection (1) of section 497.101,

14  Florida Statutes, is amended to read:

15         497.101  Board of Funeral and Cemetery Services;

16  membership; appointment; terms.--

17         (1)  The Board of Funeral and Cemetery Services is

18  created within the department of Banking and Finance and shall

19  consist of seven members appointed by the Governor, from

20  nominations made by the Chief Financial Officer Comptroller,

21  and confirmed by the Senate. The Chief Financial Officer

22  Comptroller shall nominate three persons for each vacancy on

23  the board, and the Governor shall fill each vacancy on the

24  board by appointing one of the three persons nominated by the

25  Chief Financial Officer Comptroller to fill that vacancy. If

26  the Governor objects to each of the three nominations for a

27  vacancy, she or he shall inform the Chief Financial Officer

28  Comptroller in writing. Upon notification of an objection by

29  the Governor, the Chief Financial Officer Comptroller shall

30  submit three additional nominations for that vacancy until the

31  vacancy is filled.

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 1         Section 550.  Section 497.105, Florida Statutes, is

 2  amended to read:

 3         497.105  Department of Banking and Finance; powers and

 4  duties.--The department of Banking and Finance shall:

 5         (1)  Adopt rules establishing procedures for the

 6  renewal of licenses, registrations, and certificates of

 7  authority.

 8         (2)  Appoint the executive director of the Board of

 9  Funeral and Cemetery Services, subject to the approval of the

10  board.

11         (3)  With the advice of the board, submit a biennial

12  budget to the Legislature at a time and in the manner provided

13  by law.

14         (4)  Develop a training program for persons newly

15  appointed to membership on the board.  The program shall

16  familiarize such persons with the substantive and procedural

17  laws and rules which relate to the regulation under this

18  chapter and with the structure of the department.

19         (5)  Adopt rules pursuant to ss. 120.536(1) and 120.54

20  to implement the provisions of this chapter conferring duties

21  upon it.

22         (6)  Establish by rule procedures by which the

23  department shall use the expert or technical advice of the

24  board, for the purposes of investigation, inspection, audit,

25  evaluation of applications, other duties of the department, or

26  any other areas the department may deem appropriate.

27         (7)  Require all proceedings of the board or panels

28  thereof within the department and all formal or informal

29  proceedings conducted by the department, an administrative law

30  judge, or a hearing officer with respect to licensing,

31  registration, certification, or discipline to be

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 1  electronically recorded in a manner sufficient to ensure the

 2  accurate transcription of all matters so recorded.

 3         (8)  Select only those investigators approved by the

 4  board.  Such investigators shall report to and work in

 5  coordination with the executive director of the board and are

 6  responsible for all inspections and investigations other than

 7  financial examinations.

 8         Section 551.  Section 497.107, Florida Statutes, is

 9  amended to read:

10         497.107  Headquarters.--The Board of Funeral and

11  Cemetery Services may be contacted through the headquarters of

12  the department of Banking and Finance in the City of

13  Tallahassee.

14         Section 552.  Subsection (4) of section 497.109,

15  Florida Statutes, is amended to read:

16         497.109  Board of Funeral and Cemetery Services;

17  membership.--

18         (4)  Unless otherwise provided by law, a board member

19  shall be compensated $50 for each day the member attends an

20  official meeting of the board and for each day the member

21  participates in any other business involving the board. The

22  board shall adopt rules defining the phrase "other business

23  involving the board," but the phrase may not be defined to

24  include telephone conference calls.  A board member is

25  entitled to reimbursement for expenses pursuant to s. 112.061,

26  but travel out of state requires the prior approval of the

27  Chief Financial Officer Comptroller.

28         Section 553.  Section 497.115, Florida Statutes, is

29  amended to read:

30         497.115  Board rules; final agency action;

31  challenges.--

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 1         (1)  The Chief Financial Officer Comptroller shall have

 2  standing to challenge any rule or proposed rule of the board

 3  pursuant to s. 120.56.  In addition to challenges for any

 4  invalid exercise of delegated legislative authority, the

 5  administrative law judge, upon such a challenge by the Chief

 6  Financial Officer Comptroller, may declare all or part of a

 7  rule or proposed rule invalid if it:

 8         (a)  Does not protect the public from any significant

 9  and discernible harm or damages;

10         (b)  Unreasonably restricts competition or the

11  availability of professional services in the state or in a

12  significant part of the state; or

13         (c)  Unnecessarily increases the cost of professional

14  services without a corresponding or equivalent public benefit.

15  

16  However, there shall not be created a presumption of the

17  existence of any of the conditions cited in this subsection in

18  the event that the rule or proposed rule is challenged.

19         (2)  In addition, either the Chief Financial Officer

20  Comptroller or the board shall be a substantially interested

21  party for purposes of s. 120.54(7). The board may, as an

22  adversely affected party, initiate and maintain an action

23  pursuant to s. 120.68 challenging the final agency action.

24         Section 554.  Section 497.117, Florida Statutes, is

25  amended to read:

26         497.117  Legal and investigative services.--

27         (1)  The Department of Legal Affairs shall provide

28  legal services to the board within the Department of Financial

29  Services Banking and Finance, but the primary responsibility

30  of the Department of Legal Affairs shall be to represent the

31  interests of the citizens of the state by vigorously

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 1  counseling the board with respect to its obligations under the

 2  laws of the state. Subject to the prior approval of the

 3  Attorney General, the board may retain independent legal

 4  counsel to provide legal advice to the board on a specific

 5  matter. Fees and costs of such counsel shall be paid from the

 6  Regulatory Trust Fund of the Department of Financial Services

 7  Banking and Finance.

 8         (2)  The Department of Financial Services Banking and

 9  Finance may employ or utilize the legal services of outside

10  counsel and the investigative services of outside personnel.

11  However, no attorney employed or utilized by the department

12  shall prosecute a matter or provide legal services to the

13  board with respect to the same matter.

14         Section 555.  Subsections (1), (4), and (8) of section

15  497.131, Florida Statutes, are amended to read:

16         497.131  Disciplinary proceedings.--

17         (1)  The department shall cause to be investigated any

18  complaint which is filed before it if the complaint is in

19  writing, signed by the complainant, and legally sufficient.  A

20  complaint is legally sufficient if it contains ultimate facts

21  which show that a violation of this chapter, or of any rule

22  promulgated by the department or board has occurred.  In order

23  to determine legal sufficiency, the department may require

24  supporting information or documentation.  The department may

25  investigate or continue to investigate, and the department and

26  the board may take appropriate final action on, a complaint

27  even though the original complainant withdraws it or otherwise

28  indicates her or his desire not to cause the complaint to be

29  investigated or prosecuted to completion.  The department may

30  investigate an anonymous complaint if the complaint is in

31  writing and is legally sufficient, if the alleged violation of

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 1  law or rules is substantial, and if the department has reason

 2  to believe, after preliminary inquiry, that the alleged

 3  violations in the complaint are true.  The department may

 4  investigate a complaint made by a confidential informant if

 5  the complaint is legally sufficient, if the alleged violation

 6  of law or rule is substantial, and if the department has

 7  reason to believe, after preliminary inquiry, that the

 8  allegations of the complainant are true.  The department may

 9  initiate an investigation if it has reasonable cause to

10  believe that a person has violated a state statute, a rule of

11  the department, or a rule of the board.  When an investigation

12  of any person is undertaken, the department shall promptly

13  furnish to the person or her or his attorney a copy of the

14  complaint or document which resulted in the initiation of the

15  investigation.  The person may submit a written response to

16  the information contained in such complaint or document within

17  20 days after service to the person of the complaint or

18  document.  The person's written response shall be considered

19  by the probable cause panel.  This right to respond shall not

20  prohibit the department from issuing a summary emergency order

21  if necessary to protect the public. However, if the Chief

22  Financial Officer Comptroller or her or his designee and the

23  chair of the board or the chair of its probable cause panel

24  agree in writing that such notification would be detrimental

25  to the investigation, the department may withhold

26  notification.  The department may conduct an investigation

27  without notification to any person if the act under

28  investigation is a criminal offense.

29         (4)  The determination as to whether probable cause

30  exists shall be made by majority vote of the probable cause

31  panel of the board. The board shall provide, by rule, that the

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 1  determination of probable cause shall be made by a panel of

 2  its members or by the department. The board may provide, by

 3  rule, for multiple probable cause panels composed of at least

 4  two members. The board may provide, by rule, that one or more

 5  members of the panel or panels may be a former board member.

 6  The length of term or repetition of service of any such former

 7  board member on a probable cause panel may vary according to

 8  the direction of the board when authorized by board rule. Any

 9  probable cause panel must include one of the board's former or

10  present consumer members, if one is available, willing to

11  serve, and is authorized to do so by the board chair. Any

12  probable cause panel must include a present board member. Any

13  probable cause panel must include a former or present

14  professional board member. However, any former professional

15  board member serving on the probable cause panel must hold an

16  active valid license for that profession. All probable cause

17  proceedings conducted pursuant to the provisions of this

18  section are exempt from the provisions of s. 286.011 and s.

19  24(b), Art. I of the State Constitution. The probable cause

20  panel may make a reasonable request, and upon such request the

21  department shall provide such additional investigative

22  information as is necessary to the determination of probable

23  cause. A request for additional investigative information

24  shall be made within 15 days from the date of receipt by the

25  probable cause panel of the investigative report of the

26  department. The probable cause panel shall make its

27  determination of probable cause within 30 days after receipt

28  by it of the final investigative report of the department. The

29  Chief Financial Officer Comptroller may grant extensions of

30  the 15-day and the 30-day time limits. If the probable cause

31  panel does not find probable cause within the 30-day time

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 1  limit, as may be extended, or if the probable cause panel

 2  finds no probable cause, the department may determine, within

 3  10 days after the panel fails to determine probable cause or

 4  10 days after the time limit has elapsed, that probable cause

 5  exists. If the probable cause panel finds that probable cause

 6  exists, it shall direct the department to file a formal

 7  complaint against the licensee. The department shall follow

 8  the directions of the probable cause panel regarding the

 9  filing of a formal complaint. If directed to do so, the

10  department shall file a formal complaint against the subject

11  of the investigation and prosecute that complaint pursuant to

12  the provisions of chapter 120. However, the department may

13  decide not to prosecute the complaint if it finds that

14  probable cause had been improvidently found by the panel. In

15  such cases, the department shall refer the matter to the

16  board. The board may then file a formal complaint and

17  prosecute the complaint pursuant to the provisions of chapter

18  120. The department shall also refer to the board any

19  investigation or disciplinary proceeding not before the

20  Division of Administrative Hearings pursuant to chapter 120 or

21  otherwise completed by the department within 1 year after the

22  filing of a complaint. A probable cause panel or the board may

23  retain independent legal counsel, employ investigators, and

24  continue the investigation as it deems necessary; all costs

25  thereof shall be paid from the department's Regulatory Trust

26  Fund. All proceedings of the probable cause panel shall be

27  exempt from the provisions of s. 120.525.

28         (8)  Any proceeding for the purpose of summary

29  suspension of a license, or for the restriction of a license,

30  of a licensee pursuant to s. 120.60(6) shall be conducted by

31  

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 1  the Chief Financial Officer Comptroller or her or his

 2  designee, who shall issue the final summary order.

 3         Section 556.  Paragraph (f) of subsection (3) of

 4  section 497.201, Florida Statutes, is amended to read:

 5         497.201  Cemetery companies; license; application;

 6  fee.--

 7         (3)  If the board finds that the applicant meets the

 8  criteria established in subsection (2), the department shall

 9  notify the applicant that a license will be issued when:

10         (f)  The applicant has recorded, in the public records

11  of the county in which the land is located, a notice which

12  contains the following language:

13  

14                              NOTICE

15  

16  The property described herein shall not be sold, conveyed,

17  leased, mortgaged, or encumbered without the prior written

18  approval of the Department of Financial Services Banking and

19  Finance, as provided in the Florida Funeral and Cemetery

20  Services Act.

21  

22  Such notice shall be clearly printed in boldfaced type of not

23  less than 10 points and may be included on the face of the

24  deed of conveyance to the licensee or may be contained in a

25  separate recorded instrument which contains a description of

26  the property.

27         Section 557.  Paragraph (d) of subsection (3) of

28  section 497.253, Florida Statutes, is amended to read:

29         497.253  Minimum acreage; sale or disposition of

30  cemetery lands.--

31         (3)

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 1         (d)  Any deed, mortgage, or other conveyance by a

 2  cemetery company or other owner pursuant to subsections (a)

 3  and (c) above must contain a disclosure in the following or

 4  substantially similar form:

 5  

 6  NOTICE:  The property described herein was formerly used and

 7  dedicated as a cemetery. Conveyance of this property and its

 8  use for noncemetery purposes was authorized by the Florida

 9  Department of Financial Services Banking and Finance by Order

10  No. ...., dated .....

11         Section 558.  Subsection (4) of section 497.313,

12  Florida Statutes, is amended to read:

13         497.313  Other charges.--Other than the fees for the

14  sale of burial rights, burial merchandise, and burial

15  services, no other fee may be directly or indirectly charged,

16  contracted for, or received by a cemetery company as a

17  condition for a customer to use any burial right, burial

18  merchandise, or burial service, except for:

19         (4)  Charges for credit life and credit disability

20  insurance, as requested by the purchaser, the premiums for

21  which may not exceed the applicable premiums chargeable in

22  accordance with the rates filed with the Office of Insurance

23  Regulation of the Financial Services Commission Department of

24  Insurance.

25         Section 559.  Section 497.403, Florida Statutes, is

26  amended to read:

27         497.403  Insurance business not authorized.--Nothing in

28  the Florida Insurance Code or this chapter shall be deemed to

29  authorize any preneed funeral merchandise or service contract

30  business or any preneed burial merchandise or service business

31  to transact any insurance business, other than that of preneed

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 1  funeral merchandise or service insurance or preneed burial

 2  merchandise or service insurance, or otherwise to engage in

 3  any other type of insurance unless it is authorized under a

 4  certificate of authority issued by the Department of Insurance

 5  under the provisions of the Florida Insurance Code.  Any

 6  insurance business transacted under this section must comply

 7  with the provisions of s. 626.785.

 8         Section 560.  Paragraphs (d) and (m) of subsection (1)

 9  of section 498.025, Florida Statutes, are amended to read:

10         498.025  Exemptions.--

11         (1)  Except as provided in s. 498.022, the provisions

12  of this chapter do not apply to:

13         (d)  An offer or transfer of securities currently

14  registered with the Office of Financial Institutions and

15  Securities Regulation of the Financial Services Commission

16  Department of Banking and Finance or the United States

17  Securities and Exchange Commission, except when s. 498.023(4)

18  applies.

19         (m)  The offer or disposition of an interest in

20  subdivided lands to an accredited investor, as defined by rule

21  of the Financial Services Commission Florida Department of

22  Banking and Finance in accordance with Securities and Exchange

23  Commission Regulation 230.501, 17 C.F.R. s. 230.501.

24         Section 561.  Subsection (5) of section 498.049,

25  Florida Statutes, is amended to read:

26         498.049  Suspension; revocation; civil penalties.--

27         (5)  Each person who materially participates in any

28  offer or disposition of any interest in subdivided lands in

29  violation of this chapter or relevant rules involving fraud,

30  deception, false pretenses, misrepresentation, or false

31  advertising or the disposition, concealment, or diversion of

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 1  any funds or assets of any person which adversely affects the

 2  interests of a purchaser of any interest in subdivided lands,

 3  and who directly or indirectly controls a subdivider or is a

 4  general partner, officer, director, agent, or employee of a

 5  subdivider shall also be liable under this subsection jointly

 6  and severally with and to the same extent as the subdivider,

 7  unless that person did not know, and in the exercise of

 8  reasonable care could not have known, of the existence of the

 9  facts creating the alleged liability.  Among these persons a

10  right of contribution shall exist, except that a creditor of a

11  subdivider shall not be jointly and severally liable unless

12  the creditor has assumed managerial or fiduciary

13  responsibility in a manner related to the basis for the

14  liability of the subdivider under this subsection.  Civil

15  penalties shall be limited to $10,000 for each offense, and

16  all amounts collected shall be deposited with the Chief

17  Financial Officer Treasurer to the credit of the Division of

18  Florida Land Sales, Condominiums, and Mobile Homes Trust Fund.

19  No order requiring the payment of a civil penalty shall become

20  effective until 20 days after the date of the order, unless

21  otherwise agreed in writing by the person on whom the penalty

22  is imposed.

23         Section 562.  Section 499.057, Florida Statutes, is

24  amended to read:

25         499.057  Expenses and salaries.--All expenses and

26  salaries shall be paid out of the special fund hereby created

27  in the office of the Chief Financial Officer Treasurer, which

28  fund is to be known as the "Florida Drug, Device, and Cosmetic

29  Trust Fund."

30         Section 563.  Subsection (4) of section 501.212,

31  Florida Statutes, is amended to read:

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 1         501.212  Application.--This part does not apply to:

 2         (4)  Any person or activity regulated under laws

 3  administered by the Department of Financial Services or the

 4  Office of Insurance Regulation of the Financial Services

 5  Commission Department of Insurance or banks and savings and

 6  loan associations regulated by the Office of Financial

 7  Institutions and Securities Regulation of the Financial

 8  Services Commission Department of Banking and Finance or banks

 9  or savings and loan associations regulated by federal

10  agencies.

11         Section 564.  Subsection (3) of section 507.03, Florida

12  Statutes, is amended to read:

13         507.03  Registration.--

14         (3)  Registration fees shall be $300 per year per

15  mover. All amounts collected shall be deposited by the Chief

16  Financial Officer Treasurer to the credit of the General

17  Inspection Trust Fund of the department for the sole purpose

18  of administration of this act.

19         Section 565.  Subsection (7) of section 509.215,

20  Florida Statutes, is amended to read:

21         509.215  Firesafety.--

22         (7)  The National Fire Protection Association

23  publications referenced in this section are the ones most

24  recently adopted by rule of the Division of State Fire Marshal

25  of the Department of Financial Services Insurance.

26         Section 566.  Paragraph (a) of subsection (2) of

27  section 513.055, Florida Statutes, is amended to read:

28         513.055  Revocation or suspension of permit; fines;

29  procedure.--

30         (2)

31  

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 1         (a)  In lieu of such suspension or revocation of a

 2  permit, the department may impose a fine against a permittee

 3  for the permittee's failure to comply with the provisions

 4  described in paragraph (1)(a) or may place such licensee on

 5  probation.  No fine so imposed shall exceed $500 for each

 6  offense, and all amounts collected in fines shall be deposited

 7  with the Chief Financial Officer Treasurer to the credit of

 8  the County Health Department Trust Fund.

 9         Section 567.  Subsection (3) of section 516.01, Florida

10  Statutes is amended, present subsections (4) through (6) of

11  that section are renumbered as (5) through (7), respectively,

12  and a new subsection (4) is added to that section to read:

13         516.01  Definitions.--As used in this chapter, the

14  term:

15         (3)  "Commission" means the Financial Services

16  Commission "Department" means the Department of Banking and

17  Finance.

18         (4)  "Office" means the Office of Financial

19  Institutions and Securities Regulation of the commission.

20         Section 568.  Subsection (1) of section 516.02, Florida

21  Statutes, is amended to read:

22         516.02  Loans; lines of credit; rate of interest;

23  license.--

24         (1)  A person must not engage in the business of making

25  consumer finance loans unless she or he is authorized to do so

26  under this chapter or other statutes and unless the person

27  first obtains a license from the office department.

28         Section 569.  Section 516.03, Florida Statutes, is

29  amended to read:

30         516.03  Application for license; fees; etc.--

31  

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 1         (1)  APPLICATION.--Application for a license to make

 2  loans under this chapter shall be in the form prescribed by

 3  rule of the commission department, and shall contain the name,

 4  residence and business addresses of the applicant and, if the

 5  applicant is a copartnership or association, of every member

 6  thereof and, if a corporation, of each officer and director

 7  thereof, also the county and municipality with the street and

 8  number or approximate location where the business is to be

 9  conducted, and such further relevant information as the

10  commission or office department may require.  At the time of

11  making such application the applicant shall pay to the office

12  department a biennial license fee of $625. Applications,

13  except for applications to renew or reactivate a license, must

14  also be accompanied by an investigation fee of $200. The

15  commission department may adopt rules to allow electronic

16  submission of any form, document, or fee required by this act.

17         (2)  FEES.--Fees herein provided for shall be collected

18  by the office department and shall be turned into the State

19  Treasury to the credit of the regulatory trust fund under the

20  office department.  The office department shall have full

21  power to employ such examiners or clerks to assist the office

22  department as may from time to time be deemed necessary and

23  fix their compensation. The commission department may adopt

24  rules to allow electronic submission of any fee required by

25  this section.

26         Section 570.  Subsection (2) of section 516.031,

27  Florida Statutes, is amended to read:

28         516.031  Finance charge; maximum rates.--

29         (2)  ANNUAL PERCENTAGE RATE UNDER FEDERAL TRUTH IN

30  LENDING ACT.--The annual percentage rate of finance charge

31  which may be contracted for and received under any loan

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 1  contract made by a licensee under this chapter may equal, but

 2  not exceed, the annual percentage rate which must be computed

 3  and disclosed as required by the federal Truth in Lending Act

 4  and Regulation Z of the Board of Governors of the Federal

 5  Reserve System.  The maximum annual percentage rate of finance

 6  charge which may be contracted for and received is 12 times

 7  the maximum monthly rate, and the maximum monthly rate shall

 8  be computed on the basis of one-twelfth of the annual rate for

 9  each full month. The commission department shall by rule

10  regulation establish the rate for each day in a fraction of a

11  month when the period for which the charge is computed is more

12  or less than 1 month.

13         Section 571.  Section 516.05, Florida Statutes, is

14  amended to read:

15         516.05  License.--

16         (1)  Upon the filing of an application for a license

17  and payment of all applicable fees, the office department

18  shall, unless the application is to renew or reactivate an

19  existing license, make an investigation of the facts

20  concerning the applicant's proposed activities.  If the office

21  department determines that a license should be granted, it

22  shall issue the license for a period not to exceed 2 years.

23  Biennial licensure periods and procedures for renewal of

24  licenses shall be established by the rule of the commission

25  department.  If the office department determines that grounds

26  exist under this chapter for denial of an application other

27  than an application to renew a license, it shall deny such

28  application, return to the applicant the sum paid as a license

29  fee, and retain the investigation fee.

30         (2)  A license that is not renewed at the end of the

31  biennium established by the commission department shall

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 1  automatically revert to inactive status. An inactive license

 2  may be reactivated upon submission of a completed reactivation

 3  application, payment of the biennial license fee, and payment

 4  of a reactivation fee which shall equal the biennial license

 5  fee.  A license expires on the date at which it has been

 6  inactive for 6 months.

 7         (3)  Only one place of business for the purpose of

 8  making loans under this chapter may be maintained under one

 9  license, but the office department may issue additional

10  licenses to a licensee upon compliance with all the provisions

11  of this chapter governing issuance of a single license.

12         (4)  Prior to relocating his or her place of business,

13  a licensee must file with the office department, in the manner

14  prescribed by commission department rule, notice of the

15  relocation.

16         (5)  A licensee may conduct the business of making

17  loans under this chapter within a place of business in which

18  other business is solicited or engaged in, unless the office

19  department shall find that the conduct of such other business

20  by the licensee results in an evasion of this chapter.  Upon

21  such finding, the office department shall order the licensee

22  to desist from such evasion; provided, however, that no

23  license shall be granted to or renewed for any person or

24  organization engaged in the pawnbroker business.

25         (6)  If any person purchases substantially all of the

26  assets of any existing licensed place of business, the

27  purchaser shall give immediate notice thereof to the office

28  department and shall be granted a 90-day temporary license for

29  the place of business within 10 days after the office's

30  department's receipt of an application for a permanent

31  license.  Issuance of a temporary license for a place of

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 1  business nullifies the existing license for the place of

 2  business, and the temporary licensee is subject to any

 3  disciplinary action provided for by this chapter.

 4         (7)  Licenses are not transferable or assignable.  A

 5  licensee may invalidate any license by delivering it to the

 6  office department with a written notice of the delivery, but

 7  such delivery does not affect any civil or criminal liability

 8  or the authority to enforce this chapter for acts committed in

 9  violation thereof.

10         (8)  The office department may refuse to process an

11  initial application for a license if the applicant or any

12  person with power to direct the management or policies of the

13  applicant's business is the subject of a pending criminal

14  prosecution in any jurisdiction until conclusion of such

15  criminal prosecution.

16         (9)  A licensee that is the subject of a voluntary or

17  involuntary bankruptcy filing must report such filing to the

18  office department within 7 business days after the filing

19  date.

20         Section 572.  Subsections (1), (2), and (3) of section

21  516.07, Florida Statutes, are amended to read:

22         516.07  Grounds for denial of license or for

23  disciplinary action.--

24         (1)  The following acts are violations of this chapter

25  and constitute grounds for denial of an application for a

26  license to make consumer finance loans and grounds for any of

27  the disciplinary actions specified in subsection (2):

28         (a)  A material misstatement of fact in an application

29  for a license;

30  

31  

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 1         (b)  Failure to maintain liquid assets of at least

 2  $25,000 at all times for the operation of business at a

 3  licensed location or proposed location;

 4         (c)  Failure to demonstrate financial responsibility,

 5  experience, character, or general fitness, such as to command

 6  the confidence of the public and to warrant the belief that

 7  the business operated at the licensed or proposed location is

 8  lawful, honest, fair, efficient, and within the purposes of

 9  this chapter;

10         (d)  The violation, either knowingly or without the

11  exercise of due care, of any provision of this chapter, any

12  rule or order adopted under this chapter, or any written

13  agreement entered into with the office department;

14         (e)  Any act of fraud, misrepresentation, or deceit,

15  regardless of reliance by or damage to a borrower, or any

16  illegal activity, where such acts are in connection with a

17  loan under this chapter.  Such acts include, but are not

18  limited to:

19         1.  Willful imposition of illegal or excessive charges;

20  or

21         2.  Misrepresentation, circumvention, or concealment of

22  any matter required to be stated or furnished to a borrower;

23         (f)  The use of unreasonable collection practices or of

24  false, deceptive, or misleading advertising, where such acts

25  are in connection with the operation of a business to make

26  consumer finance loans;

27         (g)  Any violation of part III of chapter 817 or part

28  II of chapter 559 or of any rule adopted under part II of

29  chapter 559;

30         (h)  Failure to maintain, preserve, and keep available

31  for examination, all books, accounts, or other documents

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 1  required by this chapter, by any rule or order adopted under

 2  this chapter, or by any agreement entered into with the office

 3  department;

 4         (i)  Refusal to permit inspection of books and records

 5  in an investigation or examination by the office department or

 6  refusal to comply with a subpoena issued by the office

 7  department;

 8         (j)  Pleading nolo contendere to, or having been

 9  convicted or found guilty of, a crime involving fraud,

10  dishonest dealing, or any act of moral turpitude, regardless

11  of whether adjudication is withheld;

12         (k)  Paying money or anything else of value, directly

13  or indirectly, to any person as compensation, inducement, or

14  reward for referring loan applicants to a licensee;

15         (l)  Allowing any person other than the licensee to use

16  the licensee's business name, address, or telephone number in

17  an advertisement;

18         (m)  Accepting or advertising that the licensee accepts

19  money on deposit or as consideration for the issuance or

20  delivery of certificates of deposit, savings certificates, or

21  similar instruments, except to the extent permitted under

22  chapter 517; or

23         (n)  Failure to pay any fee, charge, or fine imposed or

24  assessed pursuant to this chapter or any rule adopted under

25  this chapter.

26         (2)  Upon a finding by the office department that any

27  person has committed any of the acts set forth in subsection

28  (1), the office department may enter an order taking one or

29  more of the following actions:

30         (a)  Denying an application for a license;

31  

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 1         (b)  Revoking or suspending a license previously

 2  granted;

 3         (c)  Placing a licensee or an applicant for a license

 4  on probation for a period of time and subject to such

 5  conditions as the office department may specify;

 6         (d)  Placing permanent restrictions or conditions upon

 7  issuance or maintenance of a license;

 8         (e)  Issuing a reprimand; or

 9         (f)  Imposing an administrative fine not to exceed

10  $1,000 for each such act.

11         (3)  The office department may take any of the actions

12  specified in subsection (2) against any partnership,

13  corporation, or association, if the office department finds

14  that any of the acts set forth in subsection (1) have been

15  committed by any member of the partnership, any officer or

16  director of the corporation or association, or any person with

17  power to direct the management or policies of the partnership,

18  corporation, or association.

19         Section 573.  Section 516.11, Florida Statutes, is

20  amended to read:

21         516.11  Investigations and complaints.--

22         (1)  The office department shall, at intermittent

23  periods, make such investigations and examinations of any

24  licensee or other person as it deems necessary to determine

25  compliance with this chapter.  For such purposes, the office

26  department may examine the books, accounts, records, and other

27  documents or matters of any licensee or other person and

28  compel the production of all relevant books, records, and

29  other documents and materials relative to an examination or

30  investigation.  Examinations of a licensee may not be made

31  more often than once a year unless the office department has

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 1  reason to believe the licensee is not complying with this

 2  chapter.

 3         (2)  The office department shall conduct all

 4  examinations at a convenient location in this state unless the

 5  office department determines that it is more effective or

 6  cost-efficient to perform an examination at the licensee's

 7  out-of-state location. For an examination performed at the

 8  licensee's out-of-state location, the licensee shall pay the

 9  travel expense and per diem subsistence at the rate provided

10  by law for up to thirty 8-hour days per year for each examiner

11  who participates in such an examination. However, if the

12  examination involves or reveals possible fraudulent conduct of

13  the licensee, the licensee shall pay the travel expenses and

14  per diem subsistence provided by law, without limitation, for

15  each participating examiner.

16         (3)  Any person who has reason to believe that this

17  chapter has been or will be violated may file a written

18  complaint with the office department.

19         Section 574.  Section 516.12, Florida Statutes, is

20  amended to read:

21         516.12  Records to be kept by licensee.--

22         (1)  The licensee shall keep and use in her or his

23  business such books, accounts, and records in accordance with

24  sound and accepted accounting practices to enable the office

25  department to determine whether such licensee is complying

26  with the provisions of this chapter and with the rules and

27  regulations lawfully made by the commission department

28  hereunder. Every licensee shall preserve such books, accounts,

29  and records, including cards used in the card system, if any,

30  for at least 2 years after making the final entry on any loan

31  recorded therein.

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 1         (2)  A licensee, operating two or more licensed places

 2  of business in this state, may maintain the books, accounts,

 3  and records of all such offices at any one of such offices, or

 4  at any other office maintained by such licensee, upon the

 5  filing of a written request with the office department

 6  designating in the written request the office at which such

 7  records are maintained. However, the licensee shall make all

 8  books, accounts, and records available at a convenient

 9  location in this state upon request of the office department.

10         Section 575.  Section 516.22, Florida Statutes, is

11  amended to read:

12         516.22  Rules; certified copies.--

13         (1)  RULES.--The commission may department has

14  authority to adopt rules pursuant to ss. 120.536(1) and 120.54

15  to implement the provisions of law conferring duties upon it.

16         (2)  CERTIFIED COPIES OF OFFICIAL DOCUMENTS.--On

17  application of any person and payment of the costs thereof, at

18  the same rate and fees as allowed clerks of the circuit court

19  by statute, the office department shall furnish a certified

20  copy of any license, regulation, or order.  In any court or

21  proceeding, such copy shall be prima facie evidence of the

22  fact of the issuance of such license, regulation, or order.

23         Section 576.  Section 516.221, Florida Statutes, is

24  amended to read:

25         516.221  Liability when acting upon department's order,

26  declaratory statement, or rule.--No person or licensee

27  hereunder shall be deemed to be in violation of this chapter

28  nor shall such person or licensee be subject to any civil or

29  criminal liability for any act or omission to act in good

30  faith in reliance upon a subsisting order, declaratory

31  statement, or rule issued by the office or commission

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 1  department, notwithstanding a subsequent decision by a court

 2  of competent jurisdiction invalidating the order, declaratory

 3  statement, or rule.

 4         Section 577.  Section 516.23, Florida Statutes, is

 5  amended to read:

 6         516.23  Subpoenas; enforcement actions; rules.--

 7         (1)  The office department may issue and serve

 8  subpoenas to compel the attendance of witnesses and the

 9  production of documents, papers, books, records, and other

10  evidence before it in any matter pertaining to this chapter.

11  The office department may administer oaths and affirmations to

12  any person whose testimony is required.  If any person refuses

13  to testify, produce books, records, and documents, or

14  otherwise refuses to obey a subpoena issued under this

15  section, the office department may enforce the subpoena in the

16  same manner as subpoenas issued under the Administrative

17  Procedure Act are enforced. Witnesses are entitled to the same

18  fees and mileage as they are entitled to by law for attending

19  as witnesses in the circuit court, unless such examination or

20  investigation is held at the place of business or residence of

21  the witness.

22         (2)  In addition to any other powers conferred upon it

23  to enforce or administer this chapter, the office department

24  may:

25         (a)  Bring an action in any court of competent

26  jurisdiction to enforce or administer this chapter, any rule

27  or order adopted under this chapter, or any written agreement

28  entered into with the office department.  In such action, the

29  office department may seek any relief at law or equity

30  including a temporary or permanent injunction, appointment of

31  a receiver or administrator, or an order of restitution.

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 1         (b)  Issue and serve upon a person an order requiring

 2  such person to cease and desist and take corrective action

 3  whenever the office department finds that such person is

 4  violating, has violated, or is about to violate any provision

 5  of this chapter, any rule or order adopted under this chapter,

 6  or any written agreement entered into with the office

 7  department.

 8         (c)  Impose and collect an administrative fine against

 9  any person found to have violated any provision of this

10  chapter, any rule or order adopted under this chapter, or any

11  written agreement entered into with the office department, in

12  an amount not to exceed $1,000 for each violation.

13         (3)  The commission may department has authority to

14  adopt rules pursuant to ss. 120.536(1) and 120.54 to implement

15  the provisions of this chapter.

16         Section 578.  Section 516.32, Florida Statutes, is

17  amended to read:

18         516.32  Consumer credit counseling.--The office

19  department shall be responsible for promoting a consumer

20  credit counseling service for the purpose of promoting and

21  helping establish consumer credit counseling services for

22  individuals in areas where a need has been established.  The

23  purposes of the consumer credit counseling service shall be

24  to:

25         (1)  Assist and educate individual consumers as to

26  money management.

27         (2)  Assist individual consumers in consolidating

28  obligations when a situation exists in which the individual

29  consumer is in need of such assistance.

30  

31  

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 1         (3)  Work with consumer credit grantors in an effort to

 2  establish better relations with the individual consumer and

 3  with state and federal regulatory agencies.

 4         Section 579.  Section 516.33, Florida Statutes, is

 5  amended to read:

 6         516.33  Public disclosures.--All findings of facts and

 7  orders filed with the commission or office department shall be

 8  a public record.

 9         Section 580.  Subsection (1) of section 516.35, Florida

10  Statutes, is amended to read:

11         516.35  Credit insurance must comply with credit

12  insurance act.--

13         (1)  Tangible property offered as security may be

14  reasonably insured against loss for a reasonable term,

15  considering the circumstances of the loan.  If such insurance

16  is sold at standard rates through a person duly licensed by

17  the Office of Insurance Regulation of the Financial Services

18  Commission Department of Insurance and if the policy is

19  payable to the borrower or any member of her or his family, it

20  shall not be deemed to be a collateral sale, purchase, or

21  agreement even though a customary mortgagee clause is attached

22  or the licensee is a coassured.

23         Section 581.  Subsection (7) of section 517.021,

24  Florida Statutes, is amended, present subsections (8) through

25  (20) of that section are renumbered as (9) through (21),

26  respectively, and a new subsection (8) is added to that

27  section to read:

28         517.021  Definitions.--When used in this chapter,

29  unless the context otherwise indicates, the following terms

30  have the following respective meanings:

31  

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 1         (7)  "Commission" means the Financial Services

 2  Commission "Department" means the Department of Banking and

 3  Finance.

 4         (8)  "Office" means the Office of Financial

 5  Institutions and Securities Regulation of the commission.

 6         Section 582.  Section 517.03, Florida Statutes, is

 7  amended to read:

 8         517.03  Rulemaking; immunity for acts in conformity

 9  with rules.--

10         (1)  The office Department of Banking and Finance shall

11  administer and provide for the enforcement of all the

12  provisions of this chapter.  The commission may department has

13  authority to adopt rules pursuant to ss. 120.536(1) and 120.54

14  to implement the provisions of this chapter conferring powers

15  or duties upon the office it, including, without limitation,

16  adopting rules and forms governing reports. The commission

17  department shall also have the nonexclusive power to define by

18  rule any term, whether or not used in this chapter, insofar as

19  the definition is not inconsistent with the provisions of this

20  chapter.

21         (2)  No provision of this chapter imposing liability

22  shall apply to an act done, or omitted to be done, in

23  conformity with a rule of the commission department in

24  existence at the time of the act or omission, even though such

25  rule may thereafter be amended or repealed or determined by

26  judicial or other authority to be invalid for any reason.

27         Section 583.  Section 517.051, Florida Statutes, is

28  amended to read:

29         517.051  Exempt securities.--The exemptions provided

30  herein from the registration requirements of s. 517.07 are

31  self-executing and do not require any filing with the office

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 1  department prior to claiming such exemption.  Any person who

 2  claims entitlement to any of these exemptions bears the burden

 3  of proving such entitlement in any proceeding brought under

 4  this chapter.  The registration provisions of s. 517.07 do not

 5  apply to any of the following securities:

 6         (1)  A security issued or guaranteed by the United

 7  States or any territory or insular possession of the United

 8  States, by the District of Columbia, or by any state of the

 9  United States or by any political subdivision or agency or

10  other instrumentality thereof; provided that no person shall

11  directly or indirectly offer or sell securities, other than

12  general obligation bonds, under this subsection if the issuer

13  or guarantor is in default or has been in default any time

14  after December 31, 1975, as to principal or interest:

15         (a)  With respect to an obligation issued by the issuer

16  or successor of the issuer; or

17         (b)  With respect to an obligation guaranteed by the

18  guarantor or successor of the guarantor,

19  

20  except by an offering circular containing a full and fair

21  disclosure as prescribed by rule of the commission department.

22         (2)  A security issued or guaranteed by any foreign

23  government with which the United States is maintaining

24  diplomatic relations at the time of the sale or offer of sale

25  of the security, or by any state, province, or political

26  subdivision thereof having the power of taxation or

27  assessment, which security is recognized at the time it is

28  offered for sale in this state as a valid obligation by such

29  foreign government or by such state, province, or political

30  subdivision thereof issuing the security.

31         (3)  A security issued or guaranteed by:

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 1         (a)  A national bank, a federally chartered savings and

 2  loan association, or a federally chartered savings bank, or

 3  the initial subscription for equity securities in such

 4  national bank, federally chartered savings and loan

 5  association, or federally chartered savings bank;

 6         (b)  Any federal land bank, joint-stock land bank, or

 7  national farm loan association under the provisions of the

 8  Federal Farm Loan Act of July 17, 1916;

 9         (c)  An international bank of which the United States

10  is a member; or

11         (d)  A corporation created and acting as an

12  instrumentality of the government of the United States.

13         (4)  A security issued or guaranteed, as to principal,

14  interest, or dividend, by a corporation owning or operating a

15  railroad or any other public service utility; provided that

16  such corporation is subject to regulation or supervision

17  whether as to its rates and charges or as to the issue of its

18  own securities by a public commission, board, or officer of

19  the government of the United States, of any state, territory,

20  or insular possession of the United States, of any

21  municipality located therein, of the District of Columbia, or

22  of the Dominion of Canada or of any province thereof; also

23  equipment securities based on chattel mortgages, leases, or

24  agreements for conditional sale of cars, motive power, or

25  other rolling stock mortgaged, leased, or sold to or furnished

26  for the use of or upon such railroad or other public service

27  utility corporation or where the ownership or title of such

28  equipment is pledged or retained in accordance with the

29  provisions of the laws of the United States or of any state or

30  of the Dominion of Canada to secure the payment of such

31  equipment securities; and also bonds, notes, or other

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 1  evidences of indebtedness issued by a holding corporation and

 2  secured by collateral consisting of any securities hereinabove

 3  described; provided, further, that the collateral securities

 4  equal in fair value at least 125 percent of the par value of

 5  the bonds, notes, or other evidences of indebtedness so

 6  secured.

 7         (5)  A security issued or guaranteed by any of the

 8  following which are subject to the examination, supervision,

 9  or control of this state or of the Federal Deposit Insurance

10  Corporation or the National Credit Union Association:

11         (a)  A bank,

12         (b)  A trust company,

13         (c)  A savings institution,

14         (d)  A building or savings and loan association,

15         (e)  An international development bank, or

16         (f)  A credit union;

17  

18  or the initial subscription for equity securities of any

19  institution listed in paragraphs (a)-(f), provided such

20  institution is subject to the examination, supervision, or

21  control of this state.

22         (6)  A security, other than common stock, providing for

23  a fixed return, which security has been outstanding in the

24  hands of the public for a period of not less than 5 years, and

25  upon which security no default in payment of principal or

26  failure to pay the fixed return has occurred for an

27  immediately preceding period of 5 years.

28         (7)  Securities of nonprofit agricultural cooperatives

29  organized under the laws of this state when the securities are

30  sold or offered for sale to persons principally engaged in

31  agricultural production or selling agricultural products.

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 1         (8)  A note, draft, bill of exchange, or banker's

 2  acceptance having a unit amount of $25,000 or more which

 3  arises out of a current transaction, or the proceeds of which

 4  have been or are to be used for current transactions, and

 5  which has a maturity period at the time of issuance not

 6  exceeding 9 months exclusive of days of grace, or any renewal

 7  thereof which has a maturity period likewise limited.  This

 8  subsection applies only to prime quality negotiable commercial

 9  paper of a type not ordinarily purchased by the general

10  public; that is, paper issued to facilitate well-recognized

11  types of current operational business requirements and of a

12  type eligible for discounting by Federal Reserve banks.

13         (9)  A security issued by a corporation organized and

14  operated exclusively for religious, educational, benevolent,

15  fraternal, charitable, or reformatory purposes and not for

16  pecuniary profit, no part of the net earnings of which

17  corporation inures to the benefit of any private stockholder

18  or individual, or any security of a fund that is excluded from

19  the definition of an investment company under s. 3(c)(10)(B)

20  of the Investment Company Act of 1940; provided that no person

21  shall directly or indirectly offer or sell securities under

22  this subsection except by an offering circular containing full

23  and fair disclosure, as prescribed by the rules of the

24  commission department, of all material information, including,

25  but not limited to, a description of the securities offered

26  and terms of the offering, a description of the nature of the

27  issuer's business, a statement of the purpose of the offering

28  and the intended application by the issuer of the proceeds

29  thereof, and financial statements of the issuer prepared in

30  conformance with generally accepted accounting principles.

31  Section 6(c) of the Philanthropy Protection Act of 1995, Pub.

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 1  L. No. 104-62, shall not preempt any provision of this

 2  chapter.

 3         (10)  Any insurance or endowment policy or annuity

 4  contract or optional annuity contract or self-insurance

 5  agreement issued by a corporation, insurance company,

 6  reciprocal insurer, or risk retention group subject to the

 7  supervision of the insurance regulator commissioner or bank

 8  regulator commissioner, or any agency or officer performing

 9  like functions, of any state or territory of the United States

10  or the District of Columbia.

11         Section 584.  Section 517.061, Florida Statutes, is

12  amended to read:

13         517.061  Exempt transactions.--The exemption for each

14  transaction listed below is self-executing and does not

15  require any filing with the office department prior to

16  claiming such exemption.  Any person who claims entitlement to

17  any of the exemptions bears the burden of proving such

18  entitlement in any proceeding brought under this chapter.  The

19  registration provisions of s. 517.07 do not apply to any of

20  the following transactions; however, such transactions are

21  subject to the provisions of ss. 517.301, 517.311, and

22  517.312:

23         (1)  At any judicial, executor's, administrator's,

24  guardian's, or conservator's sale, or at any sale by a

25  receiver or trustee in insolvency or bankruptcy, or any

26  transaction incident to a judicially approved reorganization

27  in which a security is issued in exchange for one or more

28  outstanding securities, claims, or property interests.

29         (2)  By or for the account of a pledgeholder or

30  mortgagee selling or offering for sale or delivery in the

31  ordinary course of business and not for the purposes of

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 1  avoiding the provisions of this chapter, to liquidate a bona

 2  fide debt, a security pledged in good faith as security for

 3  such debt.

 4         (3)  The isolated sale or offer for sale of securities

 5  when made by or on behalf of a vendor not the issuer or

 6  underwriter of the securities, who, being the bona fide owner

 7  of such securities, disposes of her or his own property for

 8  her or his own account, and such sale is not made directly or

 9  indirectly for the benefit of the issuer or an underwriter of

10  such securities or for the direct or indirect promotion of any

11  scheme or enterprise with the intent of violating or evading

12  any provision of this chapter.  For purposes of this

13  subsection, isolated offers or sales include, but are not

14  limited to, an isolated offer or sale made by or on behalf of

15  a vendor of securities not the issuer or underwriter of the

16  securities if:

17         (a)  The offer or sale of securities is in a

18  transaction satisfying all of the requirements of

19  subparagraphs (11)(a)1., 2., 3., and 4. and paragraph (11)(b);

20  or

21         (b)  The offer or sale of securities is in a

22  transaction exempt under s. 4(1) of the Securities Act of

23  1933, as amended.

24  

25  For purposes of this subsection, any person, including,

26  without limitation, a promoter or affiliate of an issuer,

27  shall not be deemed an underwriter, an issuer, or a person

28  acting for the direct or indirect benefit of the issuer or an

29  underwriter with respect to any securities of the issuer which

30  she or he has owned beneficially for at least 1 year.

31  

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 1         (4)  The distribution by a corporation, trust, or

 2  partnership, actively engaged in the business authorized by

 3  its charter or other organizational articles or agreement, of

 4  securities to its stockholders or other equity security

 5  holders, partners, or beneficiaries as a stock dividend or

 6  other distribution out of earnings or surplus.

 7         (5)  The issuance of securities to such equity security

 8  holders or other creditors of a corporation, trust, or

 9  partnership in the process of a reorganization of such

10  corporation or entity, made in good faith and not for the

11  purpose of avoiding the provisions of this chapter, either in

12  exchange for the securities of such equity security holders or

13  claims of such creditors or partly for cash and partly in

14  exchange for the securities or claims of such equity security

15  holders or creditors.

16         (6)  Any transaction involving the distribution of the

17  securities of an issuer exclusively among its own security

18  holders, including any person who at the time of the

19  transaction is a holder of any convertible security, any

20  nontransferable warrant, or any transferable warrant which is

21  exercisable within not more than 90 days of issuance, when no

22  commission or other remuneration is paid or given directly or

23  indirectly in connection with the sale or distribution of such

24  additional securities.

25         (7)  The offer or sale of securities to a bank, trust

26  company, savings institution, insurance company, dealer,

27  investment company as defined by the Investment Company Act of

28  1940, pension or profit-sharing trust, or qualified

29  institutional buyer as defined by rule of the commission

30  department in accordance with Securities and Exchange

31  Commission Rule 144A (17 C.F.R. 230.144(A)(a)), whether any of

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 1  such entities is acting in its individual or fiduciary

 2  capacity; provided that such offer or sale of securities is

 3  not for the direct or indirect promotion of any scheme or

 4  enterprise with the intent of violating or evading any

 5  provision of this chapter.

 6         (8)  The sale of securities from one corporation to

 7  another corporation provided that:

 8         (a)  The sale price of the securities is $50,000 or

 9  more; and

10         (b)  The buyer and seller corporations each have assets

11  of $500,000 or more.

12         (9)  The offer or sale of securities from one

13  corporation to another corporation, or to security holders

14  thereof, pursuant to a vote or consent of such security

15  holders as may be provided by the articles of incorporation

16  and the applicable corporate statutes in connection with

17  mergers, share exchanges, consolidations, or sale of corporate

18  assets.

19         (10)  The issuance of notes or bonds in connection with

20  the acquisition of real property or renewals thereof, if such

21  notes or bonds are issued to the sellers of, and are secured

22  by all or part of, the real property so acquired.

23         (11)(a)  The offer or sale, by or on behalf of an

24  issuer, of its own securities, which offer or sale is part of

25  an offering made in accordance with all of the following

26  conditions:

27         1.  There are no more than 35 purchasers, or the issuer

28  reasonably believes that there are no more than 35 purchasers,

29  of the securities of the issuer in this state during an

30  offering made in reliance upon this subsection or, if such

31  

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 1  offering continues for a period in excess of 12 months, in any

 2  consecutive 12-month period.

 3         2.  Neither the issuer nor any person acting on behalf

 4  of the issuer offers or sells securities pursuant to this

 5  subsection by means of any form of general solicitation or

 6  general advertising in this state.

 7         3.  Prior to the sale, each purchaser or the

 8  purchaser's representative, if any, is provided with, or given

 9  reasonable access to, full and fair disclosure of all material

10  information.

11         4.  No person defined as a "dealer" in this chapter is

12  paid a commission or compensation for the sale of the issuer's

13  securities unless such person is registered as a dealer under

14  this chapter.

15         5.  When sales are made to five or more persons in this

16  state, any sale in this state made pursuant to this subsection

17  is voidable by the purchaser in such sale either within 3 days

18  after the first tender of consideration is made by such

19  purchaser to the issuer, an agent of the issuer, or an escrow

20  agent or within 3 days after the availability of that

21  privilege is communicated to such purchaser, whichever occurs

22  later.

23         (b)  The following purchasers are excluded from the

24  calculation of the number of purchasers under subparagraph

25  (a)1.:

26         1.  Any relative or spouse, or relative of such spouse,

27  of a purchaser who has the same principal residence as such

28  purchaser.

29         2.  Any trust or estate in which a purchaser, any of

30  the persons related to such purchaser specified in

31  subparagraph 1., and any corporation specified in subparagraph

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 1  3. collectively have more than 50 percent of the beneficial

 2  interest (excluding contingent interest).

 3         3.  Any corporation or other organization of which a

 4  purchaser, any of the persons related to such purchaser

 5  specified in subparagraph 1., and any trust or estate

 6  specified in subparagraph 2. collectively are beneficial

 7  owners of more than 50 percent of the equity securities or

 8  equity interest.

 9         4.  Any purchaser who makes a bona fide investment of

10  $100,000 or more, provided such purchaser or the purchaser's

11  representative receives, or has access to, the information

12  required to be disclosed by subparagraph (a)3.

13         5.  Any accredited investor, as defined by rule of the

14  commission department in accordance with Securities and

15  Exchange Commission Regulation 230.501 (17 C.F.R. 230.501).

16         (c)1.  For purposes of determining which offers and

17  sales of securities constitute part of the same offering under

18  this subsection and are therefore deemed to be integrated with

19  one another:

20         a.  Offers or sales of securities occurring more than 6

21  months prior to an offer or sale of securities made pursuant

22  to this subsection shall not be considered part of the same

23  offering, provided there are no offers or sales by or for the

24  issuer of the same or a similar class of securities during

25  such 6-month period.

26         b.  Offers or sales of securities occurring at any time

27  after 6 months from an offer or sale made pursuant to this

28  subsection shall not be considered part of the same offering,

29  provided there are no offers or sales by or for the issuer of

30  the same or a similar class of securities during such 6-month

31  period.

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 1         2.  Offers or sales which do not satisfy the conditions

 2  of any of the provisions of subparagraph 1. may or may not be

 3  part of the same offering, depending on the particular facts

 4  and circumstances in each case. The commission department may,

 5  but is not required to, adopt a rule or rules indicating what

 6  factors should be considered in determining whether offers and

 7  sales not qualifying for the provisions of subparagraph 1. are

 8  part of the same offering for purposes of this subsection.

 9         (d)  Offers or sales of securities made pursuant to,

10  and in compliance with, any other subsection of this section

11  or any subsection of s. 517.051 shall not be considered part

12  of an offering pursuant to this subsection, regardless of when

13  such offers and sales are made.

14         (12)  The sale of securities by a bank or trust company

15  organized or incorporated under the laws of the United States

16  or this state at a profit to such bank or trust company of not

17  more than 2 percent of the total sale price of such

18  securities; provided that there is no solicitation of this

19  business by such bank or trust company where such bank or

20  trust company acts as agent in the purchase or sale of such

21  securities.

22         (13)  An unsolicited purchase or sale of securities on

23  order of, and as the agent for, another by a dealer registered

24  with the Department of Banking and Finance pursuant to the

25  provisions of s. 517.12; provided that this exemption applies

26  solely and exclusively to such registered dealers and does not

27  authorize or permit the purchase or sale of securities on

28  order of, and as agent for, another by any person other than a

29  dealer so registered; and provided, further, that such

30  purchase or sale is not directly or indirectly for the benefit

31  of the issuer or an underwriter of such securities or for the

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 1  direct or indirect promotion of any scheme or enterprise with

 2  the intent of violation or evading any provision of this

 3  chapter.

 4         (14)  The offer or sale of shares of a corporation

 5  which represent ownership, or entitle the holders of the

 6  shares to possession and occupancy, of specific apartment

 7  units in property owned by such corporation and organized and

 8  operated on a cooperative basis, solely for residential

 9  purposes.

10         (15)  The offer or sale of securities under a bona fide

11  employer-sponsored stock option, stock purchase, pension,

12  profit-sharing, savings, or other benefit plan when offered

13  only to employees of the sponsoring organization or to

14  employees of its controlled subsidiaries.

15         (16)  The sale by or through a registered dealer of any

16  securities option if at the time of the sale of the option:

17         (a)  The performance of the terms of the option is

18  guaranteed by any dealer registered under the federal

19  Securities Exchange Act of 1934, as amended, which guaranty

20  and dealer are in compliance with such requirements or rules

21  as may be approved or adopted by the commission department; or

22         (b)  Such options transactions are cleared by the

23  Options Clearing Corporation or any other clearinghouse

24  recognized by the office department; and

25         (c)  The option is not sold by or for the benefit of

26  the issuer of the underlying security; and

27         (d)  The underlying security may be purchased or sold

28  on a recognized securities exchange or is quoted on the

29  National Association of Securities Dealers Automated Quotation

30  System; and

31  

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 1         (e)  Such sale is not directly or indirectly for the

 2  purpose of providing or furthering any scheme to violate or

 3  evade any provisions of this chapter.

 4         (17)(a)  The offer or sale of securities, as agent or

 5  principal, by a dealer registered pursuant to s. 517.12, when

 6  such securities are offered or sold at a price reasonably

 7  related to the current market price of such securities,

 8  provided such securities are:

 9         1.  Securities of an issuer for which reports are

10  required to be filed by s. 13 or s. 15(d) of the Securities

11  Exchange Act of 1934, as amended;

12         2.  Securities of a company registered under the

13  Investment Company Act of 1940, as amended;

14         3.  Securities of an insurance company, as that term is

15  defined in s. 2(a)(17) of the Investment Company Act of 1940,

16  as amended;

17         4.  Securities, other than any security that is a

18  federal covered security pursuant to s. 18(b)(1) of the

19  Securities Act of 1933 and is not subject to any registration

20  or filing requirements under this act, which appear in any

21  list of securities dealt in on any stock exchange registered

22  pursuant to the Securities Exchange Act of 1934, as amended,

23  and which securities have been listed or approved for listing

24  upon notice of issuance by such exchange, and also all

25  securities senior to any securities so listed or approved for

26  listing upon notice of issuance, or represented by

27  subscription rights which have been so listed or approved for

28  listing upon notice of issuance, or evidences of indebtedness

29  guaranteed by companies any stock of which is so listed or

30  approved for listing upon notice of issuance, such securities

31  to be exempt only so long as such listings or approvals remain

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 1  in effect.  The exemption provided for herein does not apply

 2  when the securities are suspended from listing approval for

 3  listing or trading.

 4         (b)  The exemption provided in this subsection does not

 5  apply if the sale is made for the direct or indirect benefit

 6  of an issuer or controlling persons of such issuer or if such

 7  securities constitute the whole or part of an unsold allotment

 8  to, or subscription or participation by, a dealer as an

 9  underwriter of such securities.

10         (c)  This exemption shall not be available for any

11  securities which have been denied registration by the

12  department pursuant to s. 517.111. Additionally, the office

13  department may deny this exemption with reference to any

14  particular security, other than a federal covered security, by

15  order published in such manner as the office department finds

16  proper.

17         (18)  The offer or sale of any security effected by or

18  through a person registered pursuant to s. 517.12(17).

19         (19)  Other transactions defined by rules as

20  transactions exempted from the registration provisions of s.

21  517.07, which rules the commission department may, but is not

22  required to, adopt from time to time, but only after a finding

23  by the office department that the application of the

24  provisions of s. 517.07 to a particular transaction is not

25  necessary in the public interest and for the protection of

26  investors because of the small dollar amount of securities

27  involved or the limited character of the offering. In

28  conjunction with its adoption of such rules, the commission

29  department may also provide in such rules that persons selling

30  or offering for sale the exempted securities are exempt from

31  the registration requirements of s. 517.12.  No rule so

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 1  adopted may have the effect of narrowing or limiting any

 2  exemption provided for by statute in the other subsections of

 3  this section.

 4         (20)  Any nonissuer transaction by a registered

 5  associated person of a registered dealer, and any resale

 6  transaction by a sponsor of a unit investment trust registered

 7  under the Investment Company Act of 1940, in a security of a

 8  class that has been outstanding in the hands of the public for

 9  at least 90 days; provided, at the time of the transaction:

10         (a)  The issuer of the security is actually engaged in

11  business and is not in the organization stage or in bankruptcy

12  or receivership and is not a blank check, blind pool, or shell

13  company whose primary plan of business is to engage in a

14  merger or combination of the business with, or an acquisition

15  of, any unidentified person;

16         (b)  The security is sold at a price reasonably related

17  to the current market price of the security;

18         (c)  The security does not constitute the whole or part

19  of an unsold allotment to, or a subscription or participation

20  by, the broker-dealer as an underwriter of the security;

21         (d)  A nationally recognized securities manual

22  designated by rule of the commission or order of the office

23  department or a document filed with the Securities and

24  Exchange Commission that is publicly available through the

25  commission's electronic data gathering and retrieval system

26  contains:

27         1.  A description of the business and operations of the

28  issuer;

29         2.  The names of the issuer's officers and directors,

30  if any, or, in the case of an issuer not domiciled in the

31  

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 1  United States, the corporate equivalents of such persons in

 2  the issuer's country of domicile;

 3         3.  An audited balance sheet of the issuer as of a date

 4  within 18 months before such transaction or, in the case of a

 5  reorganization or merger in which parties to the

 6  reorganization or merger had such audited balance sheet, a pro

 7  forma balance sheet; and

 8         4.  An audited income statement for each of the

 9  issuer's immediately preceding 2 fiscal years, or for the

10  period of existence of the issuer, if in existence for less

11  than 2 years or, in the case of a reorganization or merger in

12  which the parties to the reorganization or merger had such

13  audited income statement, a pro forma income statement; and

14         (e)  The issuer of the security has a class of equity

15  securities listed on a national securities exchange registered

16  under the Securities Exchange Act of 1934 or designated for

17  trading on the National Association of Securities Dealers

18  Automated Quotation System, unless:

19         1.  The issuer of the security is a unit investment

20  trust registered under the Investment Company Act of 1940;

21         2.  The issuer of the security has been engaged in

22  continuous business, including predecessors, for at least 3

23  years; or

24         3.  The issuer of the security has total assets of at

25  least $2 million based on an audited balance sheet as of a

26  date within 18 months before such transaction or, in the case

27  of a reorganization or merger in which parties to the

28  reorganization or merger had such audited balance sheet, a pro

29  forma balance sheet.

30         Section 585.  Section 517.07, Florida Statutes, is

31  amended to read:

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 1         517.07  Registration of securities.--

 2         (1)  It is unlawful and a violation of this chapter for

 3  any person to sell or offer to sell a security within this

 4  state unless the security is exempt under s. 517.051, is sold

 5  in a transaction exempt under s. 517.061, is a federal covered

 6  security, or is registered pursuant to this chapter.

 7         (2)  No securities that are required to be registered

 8  under this chapter shall be sold or offered for sale within

 9  this state unless such securities have been registered

10  pursuant to this chapter and unless prior to each sale the

11  purchaser is furnished with a prospectus meeting the

12  requirements of rules adopted by the commission department.

13         (3)  The office department shall issue a permit when

14  registration has been granted by the office department.  A

15  permit to sell securities is effective for 1 year from the

16  date it was granted.  Registration of securities shall be

17  deemed to include the registration of rights to subscribe to

18  such securities if the application under s. 517.081 or s.

19  517.082 for registration of such securities includes a

20  statement that such rights are to be issued.

21         (4)  A record of the registration of securities shall

22  be kept by in the office of the department, in which register

23  of securities shall also be recorded any orders entered by the

24  office department with respect to such securities. Such

25  register, and all information with respect to the securities

26  registered therein, shall be open to public inspection.

27         (5)  Notwithstanding any other provision of this

28  section, offers of securities required to be registered by

29  this section may be made in this state before the registration

30  of such securities if the offers are made in conformity with

31  rules adopted by the commission department.

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 1         Section 586.  Subsections (2), (3), (4), and (5) of

 2  section 517.075, Florida Statutes, are amended to read:

 3         517.075  Cuba, prospectus disclosure of doing business

 4  with, required.--

 5         (2)  Any disclosure required by subsection (1) must

 6  include:

 7         (a)  The name of such person, affiliate, or government

 8  with which the issuer does business and the nature of that

 9  business;

10         (b)  A statement that the information is accurate as of

11  the date the securities were effective with the United States

12  Securities and Exchange Commission or with the office

13  department, whichever date is later; and

14         (c)  A statement that current information concerning

15  the issuer's business dealings with the government of Cuba or

16  with any person or affiliate located in Cuba may be obtained

17  from the office Department of Banking and Finance, which

18  statement must include the address and phone number of the

19  office department.

20         (3)  If an issuer commences engaging in business with

21  the government of Cuba or with any person or affiliate located

22  in Cuba, after the date issuer's securities become effective

23  with the Securities and Exchange Commission or with the office

24  department, whichever date is later, or if the information

25  reported in the prospectus concerning that business changes in

26  any material way, the issuer must provide the office

27  department notice of that business or change, as appropriate,

28  in a manner form acceptable to the office department. The

29  commission department shall prescribe by rule a form for

30  persons to use to report the commencement of such business or

31  any change in such business which occurs after the effective

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 1  registration of such securities.  This form must include, at a

 2  minimum, the information required by subsection (2). The

 3  information reported on the form must be kept current.

 4  Information is current if reported to the office department

 5  within 90 days after the commencement of business or within 90

 6  days after the change occurs with respect to previously

 7  reported information.

 8         (4)  The office department shall provide, upon request,

 9  a copy of any form filed with the office department under

10  subsection (3) to any person requesting the form.

11         (5)  Each securities offering sold in violation of this

12  section, and each failure of an issuer to timely file the form

13  required by subsection (3), subjects the issuer to a fine of

14  up to $5,000.  Any fine collected under this section shall be

15  deposited into the Anti-Fraud Trust Fund of the office

16  Department of Banking and Finance.

17         Section 587.  Section 517.081, Florida Statutes, is

18  amended to read:

19         517.081  Registration procedure.--

20         (1)  All securities required by this chapter to be

21  registered before being sold in this state and not entitled to

22  registration by notification shall be registered in the manner

23  provided by this section.

24         (2)  The office department shall receive and act upon

25  applications to have securities registered and the commission

26  may prescribe forms on which it may require such applications

27  to be submitted. Applications shall be duly signed by the

28  applicant, sworn to by any person having knowledge of the

29  facts, and filed with the office department. The commission

30  department may establish, by rule, procedures for depositing

31  fees and filing documents by electronic means provided such

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 1  procedures provide the office department with the information

 2  and data required by this section. An application may be made

 3  either by the issuer of the securities for which registration

 4  is applied or by any registered dealer desiring to sell the

 5  same within the state.

 6         (3)  The office department may require the applicant to

 7  submit to the office department the following information

 8  concerning the issuer and such other relevant information as

 9  the office department may in its judgment deem necessary to

10  enable it to ascertain whether such securities shall be

11  registered pursuant to the provisions of this section:

12         (a)  The names and addresses of the directors,

13  trustees, and officers, if the issuer be a corporation,

14  association, or trust; of all the partners, if the issuer be a

15  partnership; or of the issuer, if the issuer be an individual.

16         (b)  The location of the issuer's principal business

17  office and of its principal office in this state, if any.

18         (c)  The general character of the business actually to

19  be transacted by the issuer and the purposes of the proposed

20  issue.

21         (d)  A statement of the capitalization of the issuer.

22         (e)  A balance sheet showing the amount and general

23  character of its assets and liabilities on a day not more than

24  90 days prior to the date of filing such balance sheet or such

25  longer period of time, not exceeding 6 months, as the office

26  department may permit at the written request of the issuer on

27  a showing of good cause therefor.

28         (f)  A detailed statement of the plan upon which the

29  issuer proposes to transact business.

30  

31  

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 1         (g)1.  A specimen copy of the security and a copy of

 2  any circular, prospectus, advertisement, or other description

 3  of such securities.

 4         2.  The commission department shall adopt a form for a

 5  simplified offering circular to be used solely by corporations

 6  to register, under this section, securities of the corporation

 7  that are sold in offerings in which the aggregate offering

 8  price in any consecutive 12-month period does not exceed the

 9  amount provided in s. 3(b) of the Securities Act of 1933.  The

10  following issuers shall not be eligible to submit a simplified

11  offering circular adopted pursuant to this subparagraph:

12         a.  An issuer seeking to register securities for resale

13  by persons other than the issuer.

14         b.  An issuer who is subject to any of the

15  disqualifications described in 17 C.F.R. s. 230.262, adopted

16  pursuant to the Securities Act of 1933, or who has been or is

17  engaged or is about to engage in an activity that would be

18  grounds for denial, revocation, or suspension under s.

19  517.111. For purposes of this subparagraph, an issuer includes

20  an issuer's director, officer, shareholder who owns at least

21  10 percent of the shares of the issuer, promoter, or selling

22  agent of the securities to be offered or any officer,

23  director, or partner of such selling agent.

24         c.  An issuer who is a development-stage company that

25  either has no specific business plan or purpose or has

26  indicated that its business plan is to merge with an

27  unidentified company or companies.

28         d.  An issuer of offerings in which the specific

29  business or properties cannot be described.

30         e.  Any issuer the office department determines is

31  ineligible if the form would not provide full and fair

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 1  disclosure of material information for the type of offering to

 2  be registered by the issuer.

 3         f.  Any corporation which has failed to provide the

 4  office department the reports required for a previous offering

 5  registered pursuant to this subparagraph.

 6  

 7  As a condition precedent to qualifying for use of the

 8  simplified offering circular, a corporation shall agree to

 9  provide the office department with an annual financial report

10  containing a balance sheet as of the end of the issuer's

11  fiscal year and a statement of income for such year, prepared

12  in accordance with generally accepted accounting principles

13  and accompanied by an independent accountant's report.  If the

14  issuer has more than 100 security holders at the end of a

15  fiscal year, the financial statements must be audited. Annual

16  financial reports must be filed with the office department

17  within 90 days after the close of the issuer's fiscal year for

18  each of the first 5 years following the effective date of the

19  registration.

20         (h)  A statement of the amount of the issuer's income,

21  expenses, and fixed charges during the last fiscal year or, if

22  in actual business less than 1 year, then for such time as the

23  issuer has been in actual business.

24         (i)  A statement of the issuer's cash sources and

25  application during the last fiscal year or, if in actual

26  business less than 1 year, then for such time as the issuer

27  has been in actual business.

28         (j)  A statement showing the maximum price at which

29  such security is proposed to be sold, together with the

30  maximum amount of commission, including expenses, or other

31  form of remuneration to be paid in cash or otherwise, directly

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 1  or indirectly, for or in connection with the sale or offering

 2  for sale of such securities.

 3         (k)  A copy of the opinion or opinions of counsel

 4  concerning the legality of the issue or other matters which

 5  the office department may determine to be relevant to the

 6  issue.

 7         (l)  A detailed statement showing the items of cash,

 8  property, services, patents, good will, and any other

 9  consideration in payment for which such securities have been

10  or are to be issued.

11         (m)  The amount of securities to be set aside and

12  disposed of and a statement of all securities issued from time

13  to time for promotional purposes.

14         (n)  If the issuer is a corporation, there shall be

15  filed with the application a copy of its articles of

16  incorporation with all amendments and of its existing bylaws,

17  if not already on file in the office department.  If the

18  issuer is a trustee, there shall be filed with the application

19  a copy of all instruments by which the trust is created or

20  declared and in which it is accepted and acknowledged.  If the

21  issuer is a partnership, unincorporated association,

22  joint-stock company, or any other form of organization

23  whatsoever, there shall be filed with the application a copy

24  of its articles of partnership or association and all other

25  papers pertaining to its organization, if not already on file

26  in the office department.

27         (4)  All of the statements, exhibits, and documents of

28  every kind required by the department under this section,

29  except properly certified public documents, shall be verified

30  by the oath of the applicant or of the issuer in such manner

31  and form as may be required by the commission department.

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 1         (5)  The commission department may by rule fix the

 2  maximum discounts, commissions, expenses, remuneration, and

 3  other compensation to be paid in cash or otherwise, not to

 4  exceed 20 percent, directly or indirectly, for or in

 5  connection with the sale or offering for sale of such

 6  securities in this state.

 7         (6)  An issuer filing an application under this section

 8  shall, at the time of filing, pay the office department a

 9  nonreturnable fee of $1,000 per application.

10         (7)  If upon examination of any application the office

11  department shall find that the sale of the security referred

12  to therein would not be fraudulent and would not work or tend

13  to work a fraud upon the purchaser, that the terms of the sale

14  of such securities would be fair, just, and equitable, and

15  that the enterprise or business of the issuer is not based

16  upon unsound business principles, it shall record the

17  registration of such security in the register of securities;

18  and thereupon such security so registered may be sold by any

19  registered dealer, subject, however, to the further order of

20  the office department.

21         Section 588.  Section 517.082, Florida Statutes, is

22  amended to read:

23         517.082  Notification registration.--

24         (1)  Except as provided in subsection (3), securities

25  offered or sold pursuant to a registration statement filed

26  under the Securities Act of 1933 shall be entitled to

27  registration by notification in the manner provided in

28  subsection (2), provided that prior to the offer or sale the

29  registration statement has become effective.

30         (2)  An application for registration by notification

31  shall be filed with the office department, shall contain the

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 1  following information, and shall be accompanied by the

 2  following:

 3         (a)  An application to sell executed by the issuer, any

 4  person on whose behalf the offering is made, a dealer

 5  registered under this chapter, or any duly authorized agent of

 6  any such person, setting forth the name and address of the

 7  applicant, the name and address of the issuer, and the title

 8  of the securities to be offered and sold;

 9         (b)  Copies of such documents filed with the Securities

10  and Exchange Commission as the Financial Services Commission

11  department may by rule require;

12         (c)  An irrevocable written consent to service as

13  required by s. 517.101; and

14         (d)  A nonreturnable fee of $1,000 per application.

15  

16  A registration under this section becomes effective when the

17  federal registration statement becomes effective or as of the

18  date the application is filed with the office department,

19  whichever is later, provided that, in addition to the items

20  listed in paragraphs (a)-(d), the office department has

21  received written notification of effective registration under

22  the Securities Act of 1933 or the Investment Company Act of

23  1940 within 10 business days from the date federal

24  registration is granted.  Failure to provide all the

25  information required by this subsection to the office

26  department within 60 days of the date the registration

27  statement becomes effective with the Securities and Exchange

28  Commission shall be a violation of this chapter.

29         (3)  Except for units of limited partnership interests

30  or such other securities as the commission department

31  describes by rule as exempt from this subsection due to high

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 1  investment quality, the provisions of this section may not be

 2  used to register securities if the offering price at the time

 3  of effectiveness with the Securities and Exchange Commission

 4  is $5 or less per share, unless such securities are listed or

 5  designated, or approved for listing or designation upon notice

 6  of issuance, on a stock exchange registered pursuant to the

 7  Securities Exchange Act of 1934 or on the National Association

 8  of Securities Dealers Automated Quotation (NASDAQ) System, or

 9  unless such securities are of the same issuer and of senior or

10  substantially equal rank to securities so listed or

11  designated.

12         (4)  In lieu of filing with the office department the

13  application, fees, and documents for registration required by

14  subsection (2), the commission department may establish, by

15  rule, procedures for depositing fees and filing documents by

16  electronic means, provided such procedures provide the office

17  department with the information and data required by this

18  section.

19         Section 589.  Section 517.101, Florida Statutes, is

20  amended to read:

21         517.101  Consent to service.--

22         (1)  Upon any initial application for registration

23  under s. 517.081 or s. 517.082 or upon request of the office

24  department, the issuer shall file with such application the

25  irrevocable written consent of the issuer that in suits,

26  proceedings, and actions growing out of the violation of any

27  provision of this chapter, the service on the office

28  department of a notice, process, or pleading therein,

29  authorized by the laws of this state, shall be as valid and

30  binding as if due service had been made on the issuer.

31  

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 1         (2)  Any such action shall be brought either in the

 2  county of the plaintiff's residence or in the county in which

 3  the office department has its official headquarters.  The

 4  written consent shall be authenticated by the seal of said

 5  issuer, if it has a seal, and by the acknowledged signature of

 6  a member of the copartnership or company, or by the

 7  acknowledged signature of any officer of the incorporated or

 8  unincorporated association, if it be an incorporated or

 9  unincorporated association, duly authorized by resolution of

10  the board of directors, trustees, or managers of the

11  corporation or association, and shall in such case be

12  accompanied by a duly certified copy of the resolution of the

13  board of directors, trustees, or managers of the corporation

14  or association, authorizing the officers to execute the same.

15  In case any process or pleadings mentioned in this chapter are

16  served upon the office department, it shall be by duplicate

17  copies, one of which shall be filed in the office department

18  and another immediately forwarded by the office department by

19  registered mail to the principal office of the issuer against

20  which said process or pleadings are directed.

21         Section 590.  Section 517.111, Florida Statutes, is

22  amended to read:

23         517.111  Revocation or denial of registration of

24  securities.--

25         (1)  The office department may revoke or suspend the

26  registration of any security, or may deny any application to

27  register securities, if upon examination into the affairs of

28  the issuer of such security it shall appear that:

29         (a)  The issuer is insolvent;

30         (b)  The issuer or any officer, director, or control

31  person of the issuer has violated any provision of this

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 1  chapter or any rule made hereunder or any order of the office

 2  department of which such issuer has notice;

 3         (c)  The issuer or any officer, director, or control

 4  person of the issuer has been or is engaged or is about to

 5  engage in fraudulent transactions;

 6         (d)  The issuer or any officer, director, or control

 7  person of the issuer has been found guilty of a fraudulent act

 8  in connection with any sale of securities, has engaged, is

 9  engaged, or is about to engage, in making a fictitious sale or

10  purchase of any security, or in any practice or sale of any

11  security which is fraudulent or a violation of any law;

12         (e)  The issuer or any officer, director, or control

13  person of the issuer has had a final judgment entered against

14  such issuer or person in a civil action on the grounds of

15  fraud, embezzlement, misrepresentation, or deceit;

16         (f)  The issuer or any officer, director, or control

17  person of the issuer has demonstrated any evidence of

18  unworthiness;

19         (g)  The issuer or any officer, director, or control

20  person of the issuer is in any other way dishonest or has made

21  any fraudulent representations or failed to disclose any

22  material information in any prospectus or in any circular or

23  other literature that has been distributed concerning the

24  issuer or its securities;

25         (h)  The security registered or sought to be registered

26  is the subject of an injunction entered by a court of

27  competent jurisdiction or is the subject of an administrative

28  stop-order or similar order prohibiting the offer or sale of

29  the security;

30  

31  

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 1         (i)  For any security for which registration has been

 2  applied pursuant to s. 517.081, the terms of the offer or sale

 3  of such securities would not be fair, just, or equitable; or

 4         (j)  The issuer or any person acting on behalf of the

 5  issuer has failed to timely complete any application for

 6  registration filed with the office department pursuant to the

 7  provisions of s. 517.081 or s. 517.082 or any rule adopted

 8  under such sections.

 9  

10  In making such examination, the office department shall have

11  access to and may compel the production of all the books and

12  papers of such issuer and may administer oaths to and examine

13  the officers of such issuer or any other person connected

14  therewith as to its business and affairs and may also require

15  a balance sheet exhibiting the assets and liabilities of any

16  such issuer or its income statement, or both, to be certified

17  to by a public accountant either of this state or of any other

18  state where the issuer's business is located. Whenever the

19  office deems department may deem it necessary, it may also

20  require such balance sheet or income statement, or both, to be

21  made more specific in such particulars as the office

22  department may require.

23         (2)  If any issuer shall refuse to permit an

24  examination to be made by the office department, it shall be

25  proper ground for revocation of registration.

26         (3)  If the office deems department shall deem it

27  necessary, it may enter an order suspending the right to sell

28  securities pending any investigation, provided that the order

29  shall state the office's department's grounds for taking such

30  action.

31  

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 1         (4)  Notice of the entry of such order shall be given

 2  by mail, personally, by telephone confirmed in writing, or by

 3  telegraph to the issuer. Before such order is made final, the

 4  issuer applying for registration shall, on application, be

 5  entitled to a hearing.

 6         (5)  The office department may deny any request to

 7  terminate any registration or to withdraw any application for

 8  registration if the office department believes that an act

 9  which would be grounds for denial, suspension, or revocation

10  under this chapter has been committed.

11         Section 591.  Section 517.12, Florida Statutes, is

12  amended to read:

13         517.12  Registration of dealers, associated persons,

14  investment advisers, and branch offices.--

15         (1)  No dealer, associated person, or issuer of

16  securities shall sell or offer for sale any securities in or

17  from offices in this state, or sell securities to persons in

18  this state from offices outside this state, by mail or

19  otherwise, unless the person has been registered with the

20  office department pursuant to the provisions of this section.

21  The office department shall not register any person as an

22  associated person of a dealer unless the dealer with which the

23  applicant seeks registration is lawfully registered with the

24  office department pursuant to this chapter.

25         (2)  The registration requirements of this section do

26  not apply to the issuers of securities exempted by s.

27  517.051(1)-(8) and (10).

28         (3)  Except as otherwise provided in s.

29  517.061(11)(a)4., (13), (16), (17), or (19), the registration

30  requirements of this section do not apply in a transaction

31  exempted by s. 517.061(1)-(12), (14), and (15).

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 1         (4)  No investment adviser or associated person of an

 2  investment adviser or federal covered adviser shall engage in

 3  business from offices in this state, or render investment

 4  advice to persons of this state, by mail or otherwise, unless

 5  the federal covered adviser has made a notice filing with the

 6  office department pursuant to s. 517.1201 or the investment

 7  adviser is registered pursuant to the provisions of this

 8  chapter and associated persons of the federal covered adviser

 9  or investment adviser have been registered with the office

10  department pursuant to this section. The office department

11  shall not register any person or an associated person of a

12  federal covered adviser or an investment adviser unless the

13  federal covered adviser or investment adviser with which the

14  applicant seeks registration is in compliance with the notice

15  filing requirements of s. 517.1201 or is lawfully registered

16  with the office department pursuant to this chapter. A dealer

17  or associated person who is registered pursuant to this

18  section may render investment advice upon notification to and

19  approval from the office department.

20         (5)  No dealer or investment adviser shall conduct

21  business from a branch office within this state unless the

22  branch office is registered with the office department

23  pursuant to the provisions of this section.

24         (6)  A dealer, associated person, investment adviser,

25  or branch office, in order to obtain registration, must file

26  with the office department a written application, on a form

27  which the commission department may by rule prescribe,

28  verified under oath. The commission department may establish,

29  by rule, procedures for depositing fees and filing documents

30  by electronic means provided such procedures provide the

31  office department with the information and data required by

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 1  this section. Each dealer or investment adviser must also file

 2  an irrevocable written consent to service of civil process

 3  similar to that provided for in s. 517.101.  The application

 4  shall contain such information as the commission or office

 5  department may require concerning such matters as:

 6         (a)  The name of the applicant and the address of its

 7  principal office and each office in this state.

 8         (b)  The applicant's form and place of organization;

 9  and, if the applicant is a corporation, a copy of its articles

10  of incorporation and amendments to the articles of

11  incorporation or, if a partnership, a copy of the partnership

12  agreement.

13         (c)  The applicant's proposed method of doing business

14  and financial condition and history, including a certified

15  financial statement showing all assets and all liabilities,

16  including contingent liabilities of the applicant as of a date

17  not more than 90 days prior to the filing of the application.

18         (d)  The names and addresses of all associated persons

19  of the applicant to be employed in this state and the offices

20  to which they will be assigned.

21         (7)  The application shall also contain such

22  information as the commission or office department may require

23  about the applicant; any partner, officer, or director of the

24  applicant or any person having a similar status or performing

25  similar functions; any person directly or indirectly

26  controlling the applicant; or any employee of a dealer or of

27  an investment adviser rendering investment advisory services.

28  Each applicant shall file a complete set of fingerprints taken

29  by an authorized law enforcement officer.  Such fingerprints

30  shall be submitted to the Department of Law Enforcement or the

31  Federal Bureau of Investigation for state and federal

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 1  processing.  The commission department may waive, by rule, the

 2  requirement that applicants must file a set of fingerprints or

 3  the requirement that such fingerprints must be processed by

 4  the Department of Law Enforcement or the Federal Bureau of

 5  Investigation.  The commission or office department may

 6  require information about any such applicant or person

 7  concerning such matters as:

 8         (a)  His or her full name, and any other names by which

 9  he or she may have been known, and his or her age, photograph,

10  qualifications, and educational and business history.

11         (b)  Any injunction or administrative order by a state

12  or federal agency, national securities exchange, or national

13  securities association involving a security or any aspect of

14  the securities business and any injunction or administrative

15  order by a state or federal agency regulating banking,

16  insurance, finance, or small loan companies, real estate,

17  mortgage brokers, or other related or similar industries,

18  which injunctions or administrative orders relate to such

19  person.

20         (c)  His or her conviction of, or plea of nolo

21  contendere to, a criminal offense or his or her commission of

22  any acts which would be grounds for refusal of an application

23  under s. 517.161.

24         (d)  The names and addresses of other persons of whom

25  the office department may inquire as to his or her character,

26  reputation, and financial responsibility.

27         (8)  The commission or office department may require

28  the applicant or one or more principals or general partners,

29  or natural persons exercising similar functions, or any

30  associated person applicant to successfully pass oral or

31  written examinations.  Because any principal, manager,

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 1  supervisor, or person exercising similar functions shall be

 2  responsible for the acts of the associated persons affiliated

 3  with a dealer or investment adviser, the examination standards

 4  may be higher for a dealer, office manager, principal, or

 5  person exercising similar functions than for a nonsupervisory

 6  associated person.  The commission department may waive the

 7  examination process when it determines that such examinations

 8  are not in the public interest.  The office department shall

 9  waive the examination requirements for any person who has

10  passed any tests as prescribed in s. 15(b)(7) of the

11  Securities Exchange Act of 1934 that relates to the position

12  to be filled by the applicant.

13         (9)(a)  All dealers, except securities dealers who are

14  designated by the Federal Reserve Bank of New York as primary

15  government securities dealers or securities dealers registered

16  as issuers of securities, shall comply with the net capital

17  and ratio requirements imposed pursuant to the Securities

18  Exchange Act of 1934. The commission department may by rule

19  require a dealer to file with the office department any

20  financial or operational information that is required to be

21  filed by the Securities Exchange Act of 1934 or any rules

22  adopted under such act.

23         (b)  The commission department may by rule require the

24  maintenance of a minimum net capital for securities dealers

25  who are designated by the Federal Reserve Bank of New York as

26  primary government securities dealers and securities dealers

27  registered as issuers of securities and investment advisers,

28  or prescribe a ratio between net capital and aggregate

29  indebtedness, to assure adequate protection for the investing

30  public. The provisions of this section shall not apply to any

31  investment adviser that maintains its principal place of

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 1  business in a state other than this state, provided such

 2  investment adviser is registered in the state where it

 3  maintains its principal place of business and is in compliance

 4  with such state's net capital requirements.

 5         (10)  An applicant for registration shall pay an

 6  assessment fee of $200, in the case of a dealer or investment

 7  adviser, or $40, in the case of an associated person.  The

 8  assessment fee of an associated person shall be reduced to

 9  $30, but only after the office department determines, by final

10  order, that sufficient funds have been allocated to the

11  Securities Guaranty Fund pursuant to s. 517.1203 to satisfy

12  all valid claims filed in accordance with s. 517.1203(2) and

13  after all amounts payable under any service contract entered

14  into by the office department pursuant to s. 517.1204, and all

15  notes, bonds, certificates of indebtedness, other obligations,

16  or evidences of indebtedness secured by such notes, bonds,

17  certificates of indebtedness, or other obligations, have been

18  paid or provision has been made for the payment of such

19  amounts, notes, bonds, certificates of indebtedness, other

20  obligations, or evidences of indebtedness.  An associated

21  person not having current fingerprint cards filed with the

22  National Association of Securities Dealers or a national

23  securities exchange registered with the Securities and

24  Exchange Commission shall be assessed an additional fee to

25  cover the cost for said fingerprint cards to be processed by

26  the office department.  Such fee shall be determined by rule

27  of the commission department.  Each dealer and each investment

28  adviser shall pay an assessment fee of $100 for each office in

29  this state, except its designated principal office. Such fees

30  become the revenue of the state, except for those assessments

31  provided for under s. 517.131(1) until such time as the

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 1  Securities Guaranty Fund satisfies the statutory limits, and

 2  are not returnable in the event that registration is withdrawn

 3  or not granted.

 4         (11)  If the office department finds that the applicant

 5  is of good repute and character and has complied with the

 6  provisions of this chapter and the rules made pursuant hereto,

 7  it shall register the applicant.  The registration of each

 8  dealer, investment adviser, and associated person will expire

 9  on December 31, and the registration of each branch office

10  will expire on March 31, of the year in which it became

11  effective unless the registrant has renewed its registration

12  on or before that date.  Registration may be renewed by

13  furnishing such information as the commission department may

14  require, together with payment of the fee required in

15  subsection (10) for dealers, investment advisers, associated

16  persons, or branch offices and the payment of any amount

17  lawfully due and owing to the office department pursuant to

18  any order of the office department or pursuant to any

19  agreement with the office department.  Any dealer, investment

20  adviser, or associated person registrant who has not renewed a

21  registration by the time the current registration expires may

22  request reinstatement of such registration by filing with the

23  office department, on or before January 31 of the year

24  following the year of expiration, such information as may be

25  required by the commission department, together with payment

26  of the fee required in subsection (10) for dealers, investment

27  advisers, or associated persons and a late fee equal to the

28  amount of such fee.  Any reinstatement of registration granted

29  by the office department during the month of January shall be

30  deemed effective retroactive to January 1 of that year.

31  

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 1         (12)(a)  The office department may issue a license to a

 2  dealer, investment adviser, associated person, or branch

 3  office to evidence registration under this chapter.  The

 4  office department may require the return to the office

 5  department of any license it may issue prior to issuing a new

 6  license.

 7         (b)  Every dealer, investment adviser, or federal

 8  covered adviser shall promptly file with the office

 9  department, as prescribed by rules adopted by the commission

10  department, notice as to the termination of employment of any

11  associated person registered for such dealer or investment

12  adviser in this state and shall also furnish the reason or

13  reasons for such termination.

14         (c)  Each dealer or investment adviser shall designate

15  in writing to, and register with, the office department a

16  manager for each office the dealer or investment adviser has

17  in this state.

18         (13)  Changes in registration occasioned by changes in

19  personnel of a partnership or in the principals, copartners,

20  officers, or directors of any dealer or investment adviser or

21  by changes of any material fact or method of doing business

22  shall be reported by written amendment in such form and at

23  such time as the commission department may specify.  In any

24  case in which a person or a group of persons, directly or

25  indirectly or acting by or through one or more persons,

26  proposes to purchase or acquire a controlling interest in a

27  registered dealer or investment adviser, such person or group

28  shall submit an initial application for registration as a

29  dealer or investment adviser prior to such purchase or

30  acquisition. The commission department shall adopt rules

31  providing for waiver of the application required by this

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 1  subsection where control of a registered dealer or investment

 2  adviser is to be acquired by another dealer or investment

 3  adviser registered under this chapter or where the application

 4  is otherwise unnecessary in the public interest.

 5         (14)  Every dealer, investment adviser, or branch

 6  office registered or required to be registered with the office

 7  department shall keep records of all currency transactions in

 8  excess of $10,000 and shall file reports, as prescribed under

 9  the financial recordkeeping regulations in 31 C.F.R. part 103,

10  with the office department when transactions occur in or from

11  this state.  All reports required by this subsection to be

12  filed with the office department shall be confidential and

13  exempt from s. 119.07(1) except that any law enforcement

14  agency or the Department of Revenue shall have access to, and

15  shall be authorized to inspect and copy, such reports.

16         (15)  In lieu of filing with the office department the

17  applications specified in subsection (6), the fees required by

18  subsection (10), and the termination notices required by

19  subsection (12), the commission department may by rule

20  establish procedures for the deposit of such fees and

21  documents with the Central Registration Depository of the

22  National Association of Securities Dealers, Inc., as developed

23  under contract with the North American Securities

24  Administrators Association, Inc.; provided, however, that such

25  procedures shall provide the office department with the

26  information and data as required by this section.

27         (16)  Except for securities dealers who are designated

28  by the Federal Reserve Bank of New York as primary government

29  securities dealers or securities dealers registered as issuers

30  of securities, every applicant for initial or renewal

31  registration as a securities dealer and every person

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 1  registered as a securities dealer shall be registered as a

 2  broker or dealer with the Securities and Exchange Commission

 3  and shall be subject to insurance coverage by the Securities

 4  Investor Protection Corporation.

 5         (17)(a)  A dealer that is located in Canada and has no

 6  office or other physical presence in this state may, provided

 7  the dealer is registered in accordance with this section,

 8  effect transactions in securities with or for, or induce or

 9  attempt to induce the purchase or sale of any security by:

10         1.  A person from Canada who temporarily resides in

11  this state and with whom the Canadian dealer had a bona fide

12  dealer-client relationship before the person entered the

13  United States; or

14         2.  A person from Canada who is a resident of this

15  state, and whose transactions are in a self-directed tax

16  advantage retirement plan in Canada of which the person is the

17  holder or contributor.

18         (b)  An associated person who represents a Canadian

19  dealer registered under this section may, provided the agent

20  is registered in accordance with this section, effect

21  transactions in securities in this state as permitted for a

22  dealer, under subsection (a).

23         (c)  A Canadian dealer may register under this section

24  provided that such dealer:

25         1.  Files an application in the form required by the

26  jurisdiction in which the dealer has a head office.

27         2.  Files a consent to service of process.

28         3.  Is registered as a dealer in good standing in the

29  jurisdiction from which it is effecting transactions into this

30  state and files evidence of such registration with the office

31  department.

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 1         4.  Is a member of a self-regulatory organization or

 2  stock exchange in Canada.

 3         (d)  An associated person who represents a Canadian

 4  dealer registered under this section in effecting transactions

 5  in securities in this state may register under this section

 6  provided that such person:

 7         1.  Files an application in the form required by the

 8  jurisdiction in which the dealer has its head office.

 9         2.  Is registered in good standing in the jurisdiction

10  from which he or she is effecting transactions into this state

11  and files evidence of such registration with the office

12  department.

13         (e)  If the office department finds that the applicant

14  is of good repute and character and has complied with the

15  provisions of this chapter, the office department shall

16  register the applicant.

17         (f)  A Canadian dealer registered under this section

18  shall:

19         1.  Maintain its provincial or territorial registration

20  and its membership in a self-regulatory organization or stock

21  exchange in good standing.

22         2.  Provide the office department upon request with its

23  books and records relating to its business in this state as a

24  dealer.

25         3.  Provide the office department notice of each civil,

26  criminal, or administrative action initiated against the

27  dealer.

28         4.  Disclose to its clients in this state that the

29  dealer and its agents are not subject to the full regulatory

30  requirements under this chapter.

31  

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 1         5.  Correct any inaccurate information within 30 days,

 2  if the information contained in the application form becomes

 3  inaccurate for any reason before or after the dealer becomes

 4  registered.

 5         (g)  An associated person of a Canadian dealer

 6  registered under this section shall:

 7         1.  Maintain provincial or territorial registration in

 8  good standing.

 9         2.  Provide the office department with notice of each

10  civil, criminal, or administrative action initiated against

11  such person.

12         3.  Through the dealer, correct any inaccurate

13  information within 30 days, if the information contained in

14  the application form becomes inaccurate for any reason before

15  or after the associated person becomes registered.

16         (h)  Renewal applications for Canadian dealers and

17  associated persons under this section must be filed before

18  December 31 each year.  Every applicant for registration or

19  renewal registration under this section shall pay the fee for

20  dealers and associated persons under this chapter.

21         (18)  Every dealer or associated person registered or

22  required to be registered with the office department shall

23  satisfy any continuing education requirements established by

24  rule pursuant to law.

25         (19)  The registration requirements of this section

26  which apply to investment advisers and associated persons do

27  not apply to a commodity trading adviser who:

28         (a)  Is registered as such with the Commodity Futures

29  Trading Commission pursuant to the Commodity Exchange Act.

30         (b)  Advises or exercises trading discretion, with

31  respect to foreign currency options listed and traded

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 1  exclusively on the Philadelphia Stock Exchange, on behalf of

 2  an "appropriate person" as defined by the Commodity Exchange

 3  Act.

 4  

 5  The exemption provided in this subsection does not apply to a

 6  commodity trading adviser who engages in other activities that

 7  require registration under this chapter.

 8         (20)  The registration requirements of this section do

 9  not apply to any general lines insurance agent or life

10  insurance agent licensed under chapter 626 individuals

11  licensed under s. 626.041 or its successor statute, or s.

12  626.051 or its successor statute, for the sale of a security

13  as defined in s. 517.021(20)(g) s. 517.021(19)(g), if the

14  individual is directly authorized by the issuer to offer or

15  sell the security on behalf of the issuer and the issuer is a

16  federally chartered savings bank subject to regulation by the

17  Federal Deposit Insurance Corporation. Actions under this

18  subsection shall constitute activity under the insurance

19  agent's license for purposes of ss. 626.611 and 626.621.

20         Section 592.  Section 517.1201, Florida Statutes, is

21  amended to read:

22         517.1201  Notice filing requirements for federal

23  covered advisers.--

24         (1)  It is unlawful for a person to transact business

25  in this state as a federal covered adviser unless such person

26  has made a notice filing with the office department.  A notice

27  filing under this section shall consist of a copy of those

28  documents that have been filed or are required to be filed by

29  the federal covered adviser with the Securities and Exchange

30  Commission that the Financial Services Commission department

31  by rule requires to be filed, together with a consent to

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 1  service of process and a filing fee of $200. The commission

 2  department may establish by rule procedures for the deposit of

 3  fees and the filing of documents to be made through electronic

 4  means, if the procedures provide to the office department the

 5  information and data required by this section.

 6         (2)  A notice filing shall be effective upon receipt.

 7  A notice filing shall expire on December 31 of the year in

 8  which the filing became effective unless the federal covered

 9  adviser has renewed the filing on or before that date. A

10  federal covered adviser may renew a notice filing by

11  furnishing to the office department such information that has

12  been filed or is required to be filed with the Securities and

13  Exchange Commission, as the Financial Services Commission or

14  office department may require, together with a renewal fee of

15  $200 and the payment of any amount due and owing the office

16  department pursuant to any agreement with the office

17  department. Any federal covered adviser who has not renewed a

18  notice filing by the time a current notice filing expires may

19  request reinstatement of such notice filing by filing with the

20  office department, on or before January 31 of the year

21  following the year the notice filing expires, such information

22  that has been filed or is required to be filed with the

23  Securities and Exchange Commission as may be required by the

24  Financial Services Commission or office department, together

25  with the payment of $200 and a late fee equal to $200. Any

26  reinstatement of a notice filing granted by the office

27  department during the month of January shall be deemed

28  effective retroactive to January 1 of that year.

29         (3)  The commission department may require, by rule, a

30  federal covered adviser who has made a notice filing pursuant

31  to this section to file with the office department copies of

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 1  any amendments filed or required to be filed with the

 2  Securities and Exchange Commission.

 3         (4)  The office department may issue a permit to

 4  evidence the effectiveness of a notice filing for a federal

 5  covered adviser.

 6         (5)  A notice filing may be terminated by filing notice

 7  of such termination with the office department.  Unless

 8  another date is specified by the federal covered adviser, such

 9  notice shall be effective upon its receipt by the office

10  department.

11         (6)  All fees collected under this section become the

12  revenue of the state, except for those assessments provided

13  for under s. 517.131(1) until such time as the Securities

14  Guaranty Fund satisfies the statutory limits, and are not

15  returnable in the event that a notice filing is withdrawn.

16         Section 593.  Section 517.1203, Florida Statutes, is

17  amended to read:

18         517.1203  Allocation and disbursement of assessment

19  fees.--

20         (1)  Notwithstanding s. 517.131(1), an additional

21  amount equal to 25 percent of all revenues received as

22  assessment fees pursuant to s. 517.12(10) and (11) from

23  persons applying for or renewing registrations as associated

24  persons shall be allocated to the Securities Guaranty Fund and

25  disbursed as provided in this section. This allocation shall

26  continue until the office department determines, by final

27  order, that sufficient funds have been allocated to the

28  Securities Guaranty Fund pursuant to this section to satisfy

29  all valid claims filed in accordance with subsection (2) and

30  until all amounts payable under any service contract entered

31  into by the office department pursuant to s. 517.1204, and all

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 1  notes, bonds, certificates of indebtedness, other obligations,

 2  or evidences of indebtedness secured by such notes, bonds,

 3  certificates of indebtedness, or other obligations, have been

 4  paid or provision has been made for the payment of such

 5  amounts, notes, bonds, certificates of indebtedness, other

 6  obligations, or evidences of indebtedness. This assessment fee

 7  shall be part of the regular license fee and shall be

 8  transferred to or deposited into the Securities Guaranty Fund.

 9  The moneys allocated to the Securities Guaranty Fund under

10  this section shall not be included in the calculation of the

11  allocation of the assessment fees referred to in s.

12  517.131(1)(b).  Moneys allocated under this section in excess

13  of the valid claims filed pursuant to subsection (2) shall be

14  allocated to the Anti-Fraud Trust Fund.

15         (2)(a)  Notwithstanding the provisions of ss. 517.131

16  and 517.141, moneys allocated to the Securities Guaranty Fund

17  under this section shall be used to pay amounts payable under

18  any service contract entered into by the office department

19  pursuant to s. 517.1204, subject to annual appropriation by

20  the Legislature, and to pay investors who have filed claims

21  with the Department of Banking and Finance after October 1,

22  1996, and on or before December 31, 1998, who have:

23         1.  Received a final judgment against an associated

24  person of GIC Government Securities, Inc., based upon

25  allegations which would amount to a violation of s. 517.07 or

26  s. 517.301; or

27         2.  Demonstrated to the former Department of Banking

28  and Finance or office that the claimant has suffered monetary

29  damages as a result of the acts or actions of GIC Government

30  Securities, Inc., or any associated person thereof, based upon

31  

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 1  allegations which would amount to a violation of s. 517.07 or

 2  s. 517.301.

 3         (b)1.  Claims shall be paid in the order that they were

 4  have been filed with the former Department of Banking and

 5  Finance, unless the department has noticed its intent to deny

 6  the claim in whole or in part.  If a notice of intent to deny

 7  a claim in whole or in part was is issued, the claim shall not

 8  be paid until a final order has been entered which is not

 9  subject to an order staying its effect.

10         2.  If at any time the money in the Securities Guaranty

11  Fund allocated under this section is insufficient to satisfy

12  any valid claim or portion of a valid claim approved by the

13  department or office under this section, the office department

14  shall prorate the payment based upon the ratio that the

15  person's claim bears to the total approved claims filed on the

16  same day.  The office department shall satisfy the unpaid

17  claims as soon as a sufficient amount of money has been

18  deposited in or transferred to the fund as provided in this

19  section.

20         3.  A claimant shall not be substantially affected by

21  the payment of another person's claim.

22         (c)  Claims shall be limited to the amount of the

23  investment, reduced by any amounts received from a bankruptcy

24  proceeding or from any other source. If an investor is

25  deceased, the award shall be made to the surviving spouse. If

26  the investor and surviving spouse are both deceased, the award

27  shall be made pursuant to the laws of descent and

28  distribution. Neither the office department nor the Investment

29  Fraud Restoration Financing Corporation shall make payment to

30  assignees, secured parties, lien creditors, or other such

31  entities.

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 1         (3)  In rendering a determination, the office

 2  department may rely on records from the bankruptcy proceeding

 3  regarding GIC Government Securities, Inc., unless there is

 4  good cause to believe that the record is not genuine.

 5         (4)  Amounts deposited into the Securities Guaranty

 6  Fund pursuant to this section shall be applied to or allocated

 7  for payment of amounts payable by the office department

 8  pursuant to paragraph (2)(a), under a service contract entered

 9  into by the office department pursuant to s. 517.1204, subject

10  to annual appropriation by the Legislature, before making or

11  providing for any other disbursements from the fund.

12         Section 594.  Subsection (2), paragraph (e) of

13  subsection (3), and subsections (4), (5), and (6) of section

14  517.1204, Florida Statutes, are amended to read:

15         517.1204  Investment Fraud Restoration Financing

16  Corporation.--

17         (2)  The corporation shall be governed by a board of

18  directors consisting of the director of the office or his or

19  her designee assistant comptroller, the Secretary of Elderly

20  Affairs or the secretary's designee, and the executive

21  director of the Department of Veterans' Affairs or the

22  executive director's designee. The executive director of the

23  State Board of Administration shall be the chief executive

24  officer of the corporation and shall direct and supervise the

25  administrative affairs of the corporation and shall control,

26  direct, and supervise the operation of the corporation.  The

27  corporation shall also have such other officers as may be

28  determined by the board of directors.

29         (3)  The corporation shall have all the powers of a

30  corporate body under the laws of this state to the extent not

31  

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 1  inconsistent with or restricted by the provisions of this

 2  section, including, but not limited to, the power to:

 3         (e)  Elect or appoint and employ such officers, agents,

 4  and employees as the corporation deems advisable to operate

 5  and manage the affairs of the corporation, which officers,

 6  agents, and employees may be officers or employees of the

 7  office department and the state agencies represented on the

 8  board of directors of the corporation.

 9         (4)  The corporation is authorized to enter into one or

10  more service contracts with the office department pursuant to

11  which the corporation shall provide services to the office

12  department in connection with financing the functions and

13  activities provided for in s. 517.1203.  The office department

14  may enter into one or more such service contracts with the

15  corporation and provide for payments under such contracts

16  pursuant to s. 517.1203(2)(a), subject to annual appropriation

17  by the Legislature.  The proceeds from such service contracts

18  may be used for the costs and expenses of administration of

19  the corporation after payments as set forth in subsection (5).

20  Each service contract shall have a term not to exceed 15 years

21  and shall terminate no later than July 1, 2021.  The aggregate

22  amount payable from the Securities Guaranty Fund under all

23  such service contracts shall not exceed the amount provided by

24  s. 517.1203(1). In compliance with provisions of s. 287.0641

25  and other applicable provisions of law, the obligations of the

26  office department under such service contracts shall not

27  constitute a general obligation of the state or a pledge of

28  the faith and credit or taxing power of the state nor shall

29  such obligations be construed in any manner as an obligation

30  of the State Board of Administration or entities for which it

31  invests funds, other than the office department as provided in

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 1  this section, but shall be payable solely from amounts

 2  available in the Securities Guaranty Fund, subject to annual

 3  appropriation.  In compliance with this subsection and s.

 4  287.0582, such service contracts shall expressly include the

 5  following statement: "The State of Florida's performance and

 6  obligation to pay under this contract is contingent upon an

 7  annual appropriation by the Legislature."

 8         (5)  The corporation may issue and incur notes, bonds,

 9  certificates of indebtedness, or other obligations or

10  evidences of indebtedness payable from and secured by amounts

11  payable to the corporation by the office department under a

12  service contract entered into pursuant to subsection (4) for

13  the purpose of the simultaneous payment of all claims approved

14  pursuant to s. 517.1203. The term of any such note, bond,

15  certificate of indebtedness, or other obligation or evidence

16  of indebtedness shall not exceed 15 years. The corporation may

17  select a financing team and issue obligations through

18  competitive bidding or negotiated contracts, whichever is most

19  cost-effective.  Any such indebtedness of the corporation

20  shall not constitute a debt or obligation of the state or a

21  pledge of the faith and credit or taxing power of the state,

22  but shall be payable from and secured by payments made by the

23  office department under the service contract pursuant to

24  subsection (4).

25         (6)  The corporation shall pay all claims approved

26  pursuant to s. 517.1203 as determined by and at the direction

27  of the office department.

28         Section 595.  Section 517.121, Florida Statutes, is

29  amended to read:

30         517.121  Books and records requirements;

31  examinations.--

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 1         (1)  A dealer, investment adviser, branch office, or

 2  associated person shall maintain such books and records as the

 3  commission department may prescribe by rule.

 4         (2)  The office department shall, at intermittent

 5  periods, examine the affairs and books and records of each

 6  registered dealer, investment adviser, branch office, or

 7  associated person, or require such records and reports to be

 8  submitted to it as required it may require by rule of the

 9  commission, to determine compliance with this act.

10         Section 596.  Paragraph (a) of subsection (1),

11  paragraphs (b) and (e) of subsection (3), and subsection (4)

12  of section 517.131, Florida Statutes, are amended to read:

13         517.131  Securities Guaranty Fund.--

14         (1)(a)  The Chief Financial Officer Treasurer shall

15  establish a Securities Guaranty Fund.  An amount not exceeding

16  20 percent of all revenues received as assessment fees

17  pursuant to s. 517.12(10) and (11) for dealers and investment

18  advisers or s. 517.1201 for federal covered advisers and an

19  amount not exceeding 10 percent of all revenues received as

20  assessment fees pursuant to s. 517.12(10) and (11) for

21  associated persons shall be allocated to the fund.  An

22  additional amount not exceeding 3.5 percent of all revenues

23  received as assessment fees for associated persons pursuant to

24  s. 517.12(10) and (11) shall be allocated to the Securities

25  Guaranty Fund but only after the office department determines,

26  by final order, that sufficient funds have been allocated to

27  the fund pursuant to s. 517.1203 to satisfy all valid claims

28  filed in accordance with s. 517.1203(2) and after all amounts

29  payable under any service contract entered into by the office

30  department pursuant to s. 517.1204, and all notes, bonds,

31  certificates of indebtedness, other obligations, or evidences

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 1  of indebtedness secured by such notes, bonds, certificates of

 2  indebtedness, or other obligations, have been paid or

 3  provision has been made for the payment of such amounts,

 4  notes, bonds, certificates of indebtedness, other obligations,

 5  or evidences of indebtedness. This assessment fee shall be

 6  part of the regular license fee and shall be transferred to or

 7  deposited in the Securities Guaranty Fund.

 8         (3)  Any person is eligible to seek recovery from the

 9  Securities Guaranty Fund if:

10         (b)  Such person has made all reasonable searches and

11  inquiries to ascertain whether the judgment debtor possesses

12  real or personal property or other assets subject to being

13  sold or applied in satisfaction of the judgment, and by her or

14  his search the person has discovered no property or assets; or

15  she or he has discovered property and assets and has taken all

16  necessary action and proceedings for the application thereof

17  to the judgment, but the amount thereby realized was

18  insufficient to satisfy the judgment.  To verify compliance

19  with such condition, the office department may require such

20  person to have a writ of execution be issued upon such

21  judgment and may further require a showing that no personal or

22  real property of the judgment debtor liable to be levied upon

23  in complete satisfaction of the judgment can be found.

24         (e)  The office department waives compliance with the

25  requirements of paragraph (a) or paragraph (b).  The office

26  department may waive such compliance if the dealer, investment

27  adviser, or associated person which is the subject of the

28  claim filed with the office department is the subject of any

29  proceeding in which a receiver has been appointed by a court

30  of competent jurisdiction.  If the office department waives

31  such compliance, the office department may, upon petition by

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 1  the debtor or the court-appointed trustee, examiner, or

 2  receiver, distribute funds from the Securities Guaranty Fund

 3  up to the amount allowed under s. 517.141. Any waiver granted

 4  pursuant to this section shall be considered a judgment for

 5  purposes of complying with the requirements of this section

 6  and of s. 517.141.

 7         (4)  Any person who files an action that may result in

 8  the disbursement of funds from the Securities Guaranty Fund

 9  pursuant to the provisions of s. 517.141 shall give written

10  notice by certified mail to the office department as soon as

11  practicable after such action has been filed.  The failure to

12  give such notice shall not bar a payment from the Securities

13  Guaranty Fund if all of the conditions specified in subsection

14  (3) are satisfied.

15         Section 597.  Section 517.141, Florida Statutes, is

16  amended to read:

17         517.141  Payment from the fund.--

18         (1)  Any person who meets all of the conditions

19  prescribed in s. 517.131 may apply to the office department

20  for payment to be made to such person from the Securities

21  Guaranty Fund in the amount equal to the unsatisfied portion

22  of such person's judgment or $10,000, whichever is less, but

23  only to the extent and amount reflected in the judgment as

24  being actual or compensatory damages, excluding costs and

25  attorney's fees.

26         (2)  Regardless of the number of claimants involved,

27  payments for claims shall be limited in the aggregate to

28  $100,000 against any one dealer, investment adviser, or

29  associated person. If the total claims exceed the aggregate

30  limit of $100,000, the office department shall prorate the

31  

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 1  payment based upon the ratio that the person's claim bears to

 2  the total claims filed.

 3         (3)  No payment shall be made on any claim against any

 4  one dealer, investment adviser, or associated person before

 5  the expiration of 2 years from the date any claimant is found

 6  by the office department to be eligible for recovery pursuant

 7  to this section. If during this 2-year period more than one

 8  claim is filed against the same dealer, investment adviser, or

 9  associated person, or if the office department receives notice

10  pursuant to s. 517.131(4) that an action against the same

11  dealer, investment adviser, or associated person is pending,

12  all such claims and notices of pending claims received during

13  this period against the same dealer, investment adviser, or

14  associated person may be handled by the office department as

15  provided in this section.  Two years after the first claimant

16  against that same dealer, investment adviser, or associated

17  person applies for payment pursuant to this section:

18         (a)  The office department shall determine those

19  persons eligible for payment or for potential payment in the

20  event of a pending action.  All such persons may be entitled

21  to receive their pro rata shares of the fund as provided in

22  this section.

23         (b)  Those persons who meet all the conditions

24  prescribed in s. 517.131 and who have applied for payment

25  pursuant to this section will be entitled to receive their pro

26  rata shares of the total disbursement.

27         (c)  Those persons who have filed notice with the

28  office department of a pending claim pursuant to s. 517.131(4)

29  but who are not yet eligible for payment from the fund will be

30  entitled to receive their pro rata shares of the total

31  disbursement once they have complied with subsection (1).

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 1  However, in the event that the amounts they are eligible to

 2  receive pursuant to subsection (1) are less than their pro

 3  rata shares as determined under this section, any excess shall

 4  be distributed pro rata to those persons entitled to

 5  disbursement under this subsection whose pro rata shares of

 6  the total disbursement were less than the amounts of their

 7  claims.

 8         (4)  Individual claims filed by persons owning the same

 9  joint account, or claims stemming from any other type of

10  account maintained by a particular licensee on which more than

11  one name appears, shall be treated as the claims of one

12  eligible claimant with respect to payment from the fund.  If a

13  claimant who has obtained a judgment which qualifies for

14  disbursement under s. 517.131 has maintained more than one

15  account with the dealer, investment adviser, or associated

16  person who is the subject of the claims, for purposes of

17  disbursement of the fund, all such accounts, whether joint or

18  individual, shall be considered as one account and shall

19  entitle such claimant to only one distribution from the fund

20  not to exceed the lesser of $10,000 or the unsatisfied portion

21  of such claimant's judgment as provided in subsection (1). To

22  the extent that a claimant obtains more than one judgment

23  against a dealer, investment adviser, or one or more

24  associated persons arising out of the same transactions,

25  occurrences, or conduct or out of the dealer's, investment

26  adviser's, or associated person's handling of the claimant's

27  account, such judgments shall be consolidated for purposes of

28  this section and shall entitle the claimant to only one

29  disbursement from the fund not to exceed the lesser of $10,000

30  or the unsatisfied portion of such claimant's judgment as

31  provided in subsection (1).

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 1         (5)  If the final judgment which gave rise to the claim

 2  is overturned in any appeal or in any collateral proceeding,

 3  the claimant shall reimburse the fund all amounts paid to the

 4  claimant on the claim.  Such reimbursement shall be paid to

 5  the office department within 60 days after the final

 6  resolution of the appellate or collateral proceedings, with

 7  the 60-day period commencing on the date the final order or

 8  decision is entered in such proceedings.

 9         (6)  If a claimant receives payments in excess of that

10  which is permitted under this chapter, the claimant shall

11  reimburse the fund such excess within 60 days after the

12  claimant receives such excess payment or after the payment is

13  determined to be in excess of that permitted by law, whichever

14  is later.

15         (7)  The office department may institute legal

16  proceedings to enforce compliance with this section and with

17  s. 517.131 to recover moneys owed to the fund, and shall be

18  entitled to recover interest, costs, and attorney's fees in

19  any action brought pursuant to this section in which the

20  office department prevails.

21         (8)  If at any time the money in the Securities

22  Guaranty Fund is insufficient to satisfy any valid claim or

23  portion of a valid claim approved by the office department,

24  the office department shall satisfy such unpaid claim or

25  portion of such valid claim as soon as a sufficient amount of

26  money has been deposited in or transferred to the fund.  When

27  there is more than one unsatisfied claim outstanding, such

28  claims shall be paid in the order in which the claims were

29  approved by final order of the office department, which order

30  is not subject to an appeal or other pending proceeding.

31  

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 1         (9)  Upon receipt by the claimant of the payment from

 2  the Securities Guaranty Fund, the claimant shall assign any

 3  additional right, title, and interest in the judgment, to the

 4  extent of such payment, to the office department.  If the

 5  provisions of s. 517.131(3)(e) apply, the claimant must assign

 6  to the office department any right, title, and interest in the

 7  debt to the extent of any payment by the office department

 8  from the Securities Guaranty Fund.

 9         (10)  All payments and disbursements made from the

10  Securities Guaranty Fund shall be made by the Chief Financial

11  Officer Treasurer upon authorization a voucher signed by the

12  director of the office Comptroller, as head of the department,

13  or such agent as she or he may designate.

14         Section 598.  Section 517.151, Florida Statutes, is

15  amended to read:

16         517.151  Investments of the fund.--The funds of the

17  Securities Guaranty Fund shall be invested by the Chief

18  Financial Officer Treasurer under the same limitations as

19  other state funds, and the interest earned thereon shall be

20  deposited to the credit of the fund and available for the same

21  purpose as other moneys deposited in the Securities Guaranty

22  Fund.

23         Section 599.  Subsection (1), (3), and (5), and

24  paragraph (b) of subsection (6) of section 517.161, Florida

25  Statutes, are amended to read:

26         517.161  Revocation, denial, or suspension of

27  registration of dealer, investment adviser, associated person,

28  or branch office.--

29         (1)  Registration under s. 517.12 may be denied or any

30  registration granted may be revoked, restricted, or suspended

31  

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 1  by the office department if the office department determines

 2  that such applicant or registrant:

 3         (a)  Has violated any provision of this chapter or any

 4  rule or order made under this chapter;

 5         (b)  Has made a material false statement in the

 6  application for registration;

 7         (c)  Has been guilty of a fraudulent act in connection

 8  with rendering investment advice or in connection with any

 9  sale of securities, has been or is engaged or is about to

10  engage in making fictitious or pretended sales or purchases of

11  any such securities or in any practice involving the rendering

12  of investment advice or the sale of securities which is

13  fraudulent or in violation of the law;

14         (d)  Has made a misrepresentation or false statement

15  to, or concealed any essential or material fact from, any

16  person in the rendering of investment advice or the sale of a

17  security to such person;

18         (e)  Has failed to account to persons interested for

19  all money and property received;

20         (f)  Has not delivered, after a reasonable time, to

21  persons entitled thereto securities held or agreed to be

22  delivered by the dealer, broker, or investment adviser, as and

23  when paid for, and due to be delivered;

24         (g)  Is rendering investment advice or selling or

25  offering for sale securities through any associated person not

26  registered in compliance with the provisions of this chapter;

27         (h)  Has demonstrated unworthiness to transact the

28  business of dealer, investment adviser, or associated person;

29         (i)  Has exercised management or policy control over or

30  owned 10 percent or more of the securities of any dealer or

31  investment adviser that has been declared bankrupt, or had a

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 1  trustee appointed under the Securities Investor Protection

 2  Act; or is, in the case of a dealer or investment adviser,

 3  insolvent;

 4         (j)  Has been convicted of, or has entered a plea of

 5  guilty or nolo contendere to, a crime against the laws of this

 6  state or any other state or of the United States or of any

 7  other country or government which relates to registration as a

 8  dealer, investment adviser, issuer of securities, associated

 9  person, or branch office; which relates to the application for

10  such registration; or which involves moral turpitude or

11  fraudulent or dishonest dealing;

12         (k)  Has had a final judgment entered against her or

13  him in a civil action upon grounds of fraud, embezzlement,

14  misrepresentation, or deceit;

15         (l)  Is of bad business repute; or

16         (m)  Has been the subject of any decision, finding,

17  injunction, suspension, prohibition, revocation, denial,

18  judgment, or administrative order by any court of competent

19  jurisdiction, administrative law judge, or by any state or

20  federal agency, national securities, commodities, or option

21  exchange, or national securities, commodities, or option

22  association, involving a violation of any federal or state

23  securities or commodities law or any rule or regulation

24  promulgated thereunder, or any rule or regulation of any

25  national securities, commodities, or options exchange or

26  national securities, commodities, or options association, or

27  has been the subject of any injunction or adverse

28  administrative order by a state or federal agency regulating

29  banking, insurance, finance or small loan companies, real

30  estate, mortgage brokers, or other related or similar

31  industries.  For purposes of this subsection, the office

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 1  department may not deny registration to any applicant who has

 2  been continuously registered with the office department for 5

 3  years from the entry of such decision, finding, injunction,

 4  suspension, prohibition, revocation, denial, judgment, or

 5  administrative order provided such decision, finding,

 6  injunction, suspension, prohibition, revocation, denial,

 7  judgment, or administrative order has been timely reported to

 8  the office department pursuant to the commission's

 9  department's rules and regulations.

10         (3)  In the event the office department determines to

11  deny an application or revoke a registration, it shall enter a

12  final order with its findings on the register of dealers and

13  associated persons; and denial, suspension, or revocation of

14  the registration of a dealer or investment adviser shall also

15  deny, suspend, or revoke the registration of all her or his

16  associated persons.

17         (5)  The office department may deny any request to

18  terminate or withdraw any application or registration if the

19  office department believes that an act which would be a ground

20  for denial, suspension, restriction, or revocation under this

21  chapter has been committed.

22         (6)  Registration under s. 517.12 may be denied or any

23  registration granted may be suspended or restricted if an

24  applicant or registrant is charged, in a pending enforcement

25  action or pending criminal prosecution, with any conduct that

26  would authorize denial or revocation under subsection (1).

27         (b)  Any order of suspension or restriction under this

28  subsection shall:

29         1.  Take effect only after a hearing, unless no hearing

30  is requested by the registrant or unless the suspension or

31  restriction is made in accordance with s. 120.60(6).

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 1         2.  Contain a finding that evidence of a prima facie

 2  case supports the charge made in the enforcement action or

 3  criminal prosecution.

 4         3.  Operate for no longer than 10 days beyond receipt

 5  of notice by the office department of termination with respect

 6  to the registrant of the enforcement action or criminal

 7  prosecution.

 8         Section 600.  Section 517.181, Florida Statutes, is

 9  amended to read:

10         517.181  Escrow agreement.--

11         (1)  If the statement containing information as to

12  securities to be registered, as provided for in s. 517.081,

13  shall disclose that any such securities or any securities

14  senior thereto shall have been or shall be intended to be

15  issued for any patent right, copyright, trademark, process,

16  formula, or goodwill; for organization or promotion fees or

17  expenses; or for goodwill or going-concern value or other

18  intangible assets, then the amount and nature thereof shall be

19  fully set forth, and the office department may require that

20  such securities so issued in payment of such patent right,

21  copyright, trademark, process, formula, or goodwill; for

22  organization or promotion fees or expenses; or for other

23  intangible assets shall be delivered in escrow to the office

24  department or other depository satisfactory to the office

25  department under an escrow agreement.  The escrow agreement

26  shall be in a form suitable to the office department and shall

27  provide for the escrow or impoundment of such securities for a

28  reasonable length of time determined by the office department

29  to be in the best interest of other shareholders.  The

30  securities subject to escrow shall also include any dividend,

31  cash, or stock that may be paid during the life of the escrow

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 1  and any stock issued through, or by reason of, any stock

 2  split, exchange of shares, recapitalization, merger,

 3  consolidation, reorganization, or similar combination or

 4  subdivision in substitution for or in lieu of any stock

 5  subject to this provision; and in case of dissolution or

 6  insolvency during the time such securities are held in escrow,

 7  the owners of such securities shall not participate in the

 8  assets until after the owners of all other securities shall

 9  have been paid in full.

10         (2)  Any securities held in escrow under this section

11  on November 1, 1978, may be released to the owners thereof

12  upon request, if satisfactory financial data is submitted to

13  the office department showing that the issuer is currently

14  operating on sound business principles and has net income in

15  accordance with criteria-implementing rules of the commission

16  department relating to escrow of securities.  At any time, the

17  office department may review any existing escrow agreement

18  made under this section and determine that the same may be

19  amended in order to permit a subsequent release of the

20  securities upon terms and conditions which are just and

21  equitable as defined by said rules.

22         (3)  When it shall appear from information available to

23  the office department that the issuer of securities held in

24  escrow has been dissolved or disbanded or is defunct or no

25  longer actively engaged in business and such securities are of

26  no value, the office department, after giving at least 60

27  days' notice in at least one newspaper of general circulation

28  and after giving interested parties opportunity for hearing,

29  may enter its order authorizing the destruction of said

30  securities.  Any affected escrow agent may rely on such order

31  

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 1  and shall not be required to determine the validity or

 2  sufficiency thereof.

 3         Section 601.  Section 517.191, Florida Statutes, is

 4  amended to read:

 5         517.191  Injunction to restrain violations.--

 6         (1)  When it appears shall appear to the office

 7  department, either upon complaint or otherwise, that a person

 8  has engaged or is about to engage in any act or practice

 9  constituting a violation of this chapter or a rule or order

10  hereunder, the office department may investigate; and whenever

11  it shall believe from evidence satisfactory to it that any

12  such person has engaged, is engaged, or is about to engage in

13  any act or practice constituting a violation of this chapter

14  or a rule or order hereunder, the office department may, in

15  addition to any other remedies, bring action in the name and

16  on behalf of the state against such person and any other

17  person concerned in or in any way participating in or about to

18  participate in such practices or engaging therein or doing any

19  act or acts in furtherance thereof or in violation of this

20  chapter to enjoin such person or persons from continuing such

21  fraudulent practices or engaging therein or doing any act or

22  acts in furtherance thereof or in violation of this chapter.

23  In any such court proceedings, the office department may apply

24  for, and on due showing be entitled to have issued, the

25  court's subpoena requiring forthwith the appearance of any

26  defendant and her or his employees, associated persons, or

27  agents and the production of documents, books, and records

28  that may appear necessary for the hearing of such petition, to

29  testify or give evidence concerning the acts or conduct or

30  things complained of in such application for injunction.  In

31  such action, the equity courts shall have jurisdiction of the

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 1  subject matter, and a judgment may be entered awarding such

 2  injunction as may be proper.

 3         (2)  In addition to all other means provided by law for

 4  the enforcement of any temporary restraining order, temporary

 5  injunction, or permanent injunction issued in any such court

 6  proceedings, the court shall have the power and jurisdiction,

 7  upon application of the office department, to impound and to

 8  appoint a receiver or administrator for the property, assets,

 9  and business of the defendant, including, but not limited to,

10  the books, records, documents, and papers appertaining

11  thereto.  Such receiver or administrator, when appointed and

12  qualified, shall have all powers and duties as to custody,

13  collection, administration, winding up, and liquidation of

14  said property and business as shall from time to time be

15  conferred upon her or him by the court.  In any such action,

16  the court may issue orders and decrees staying all pending

17  suits and enjoining any further suits affecting the receiver's

18  or administrator's custody or possession of the said property,

19  assets, and business or, in its discretion, may with the

20  consent of the presiding judge of the circuit require that all

21  such suits be assigned to the circuit court judge appointing

22  the said receiver or administrator.

23         (3)  In addition to any other remedies provided by this

24  chapter, the office department may apply to the court hearing

25  this matter for an order of restitution whereby the defendants

26  in such action shall be ordered to make restitution of those

27  sums shown by the office department to have been obtained by

28  them in violation of any of the provisions of this chapter.

29  Such restitution shall, at the option of the court, be payable

30  to the administrator or receiver appointed pursuant to this

31  

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 1  section or directly to the persons whose assets were obtained

 2  in violation of this chapter.

 3         Section 602.  Section 517.201, Florida Statutes, is

 4  amended to read:

 5         517.201  Investigations; examinations; subpoenas;

 6  hearings; witnesses.--

 7         (1)  The office department:

 8         (a)  May make investigations and examinations within or

 9  outside of this state as it deems necessary:

10         1.  To determine whether a person has violated or is

11  about to violate any provision of this chapter or a rule or

12  order hereunder; or

13         2.  To aid in the enforcement of this chapter.

14         (b)  May require or permit a person to file a statement

15  in writing, under oath or otherwise as the office department

16  determines, as to all the facts and circumstances concerning

17  the matter to be investigated.

18         (2)  When it is proposed to conduct an investigation or

19  examination, the office department may gather evidence in the

20  matter. The office department may administer oaths, examine

21  witnesses, and issue subpoenas.

22         (3)  Subpoenas for witnesses whose evidence is deemed

23  material to any investigation or examination may be issued by

24  the office department under the seal of the office department,

25  or by any county court judge or clerk of the circuit court or

26  county court, commanding such witnesses to be or appear before

27  the office department at a time and place to be therein named

28  and to bring such books, records, and documents as may be

29  specified or to submit such books, records, and documents to

30  inspection; and such subpoenas may be served by an authorized

31  representative of the office department.

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 1         (4)(a)  In the event of substantial noncompliance with

 2  a subpoena or subpoena duces tecum issued or caused to be

 3  issued by the office department pursuant to this section, the

 4  office department may petition the circuit court of the county

 5  in which the person subpoenaed resides or has its principal

 6  place of business for an order requiring the subpoenaed person

 7  to appear and testify and to produce such books, records, and

 8  documents as are specified in such subpoena duces tecum.  The

 9  court may grant injunctive relief restraining the issuance,

10  sale or offer for sale, purchase or offer to purchase,

11  promotion, negotiation, advertisement, or distribution in or

12  from offices in this state of securities or investments by a

13  person or agent, employee, broker, partner, officer, director,

14  or stockholder thereof, and may grant such other relief,

15  including, but not limited to, the restraint, by injunction or

16  appointment of a receiver, of any transfer, pledge,

17  assignment, or other disposition of such person's assets or

18  any concealment, alteration, destruction, or other disposition

19  of subpoenaed books, records, or documents, as the court deems

20  appropriate, until such person has fully complied with such

21  subpoena or subpoena duces tecum and the office department has

22  completed its investigation or examination.  The office

23  department is entitled to the summary procedure provided in s.

24  51.011, and the court shall advance the cause on its calendar.

25  Costs incurred by the office department to obtain an order

26  granting, in whole or in part, such petition for enforcement

27  of a subpoena or subpoena duces tecum shall be taxed against

28  the subpoenaed person, and failure to comply with such order

29  shall be a contempt of court.

30         (b)  When it shall appear to the office department that

31  the compliance with a subpoena or subpoena duces tecum issued

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 1  or caused to be issued by the office department pursuant to

 2  this section is essential and otherwise unavailable to an

 3  investigation or examination, the office department, in

 4  addition to the other remedies provided for herein, may, by

 5  verified petition setting forth the facts, apply to the

 6  circuit court of the county in which the subpoenaed person

 7  resides or has its principal place of business for a writ of

 8  ne exeat.  The court shall thereupon direct the issuance of

 9  the writ against the subpoenaed person requiring sufficient

10  bond conditioned on compliance with the subpoena or subpoena

11  duces tecum.  The court shall cause to be endorsed on the writ

12  a suitable amount of bond on payment of which the person named

13  in the writ shall be freed, having a due regard to the nature

14  of the case.

15         (5)  Witnesses shall be entitled to the same fees and

16  mileage as they may be entitled by law for attending as

17  witnesses in the circuit court, except where such examination

18  or investigation is held at the place of business or residence

19  of the witness.

20         Section 603.  Subsections (1) and (3) of section

21  517.2015, Florida Statutes, are amended to read:

22         517.2015  Confidentiality of information relating to

23  investigations and examinations.--

24         (1)(a)  Except as otherwise provided by this section,

25  information relative to an investigation or examination by the

26  office department pursuant to this chapter, including any

27  consumer complaint, is confidential and exempt from s.

28  119.07(1) until the investigation or examination is completed

29  or ceases to be active. The information compiled by the office

30  department in such an investigation or examination shall

31  remain confidential and exempt from s. 119.07(1) after the

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 1  office's department's investigation or examination is

 2  completed or ceases to be active if the office department

 3  submits the information to any law enforcement or

 4  administrative agency or regulatory organization for further

 5  investigation. Such information shall remain confidential and

 6  exempt from s. 119.07(1) until that agency's or organization's

 7  investigation is completed or ceases to be active.  For

 8  purposes of this section, an investigation or examination

 9  shall be considered "active" so long as the office department

10  or any law enforcement or administrative agency or regulatory

11  organization is proceeding with reasonable dispatch and has a

12  reasonable good faith belief that the investigation or

13  examination may lead to the filing of an administrative,

14  civil, or criminal proceeding or to the denial or conditional

15  grant of a license, registration, or permit.  This section

16  shall not be construed to prohibit disclosure of information

17  which is required by law to be filed with the office

18  department and which, but for the investigation or

19  examination, would be subject to s. 119.07(1).

20         (b)  Except as necessary for the office department to

21  enforce the provisions of this chapter, a consumer complaint

22  and other information relative to an investigation or

23  examination shall remain confidential and exempt from s.

24  119.07(1) after the investigation or examination is completed

25  or ceases to be active to the extent disclosure would:

26         1.  Jeopardize the integrity of another active

27  investigation or examination.

28         2.  Reveal the name, address, telephone number, social

29  security number, or any other identifying number or

30  information of any complainant, customer, or account holder.

31         3.  Disclose the identity of a confidential source.

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 1         4.  Disclose investigative techniques or procedures.

 2         5.  Reveal a trade secret as defined in s. 688.002.

 3         (c)  In the event that office department personnel are

 4  or have been involved in an investigation or examination of

 5  such nature as to endanger their lives or physical safety or

 6  that of their families, then the home addresses, telephone

 7  numbers, places of employment, and photographs of such

 8  personnel, together with the home addresses, telephone

 9  numbers, photographs, and places of employment of spouses and

10  children of such personnel and the names and locations of

11  schools and day care facilities attended by the children of

12  such personnel are confidential and exempt from s. 119.07(1).

13         (d)  Nothing in this section shall be construed to

14  prohibit the office department from providing information to

15  any law enforcement or administrative agency or regulatory

16  organization. Any law enforcement or administrative agency or

17  regulatory organization receiving confidential information in

18  connection with its official duties shall maintain the

19  confidentiality of the information so long as it would

20  otherwise be confidential.

21         (e)  All information obtained by the office department

22  from any person which is only made available to the office

23  department on a confidential or similarly restricted basis

24  shall be confidential and exempt from s. 119.07(1).  This

25  exemption shall not be construed to prohibit disclosure of

26  information which is required by law to be filed with the

27  office department or which is otherwise subject to s.

28  119.07(1).

29         (3)  A privilege against civil liability is granted to

30  a person who furnishes information or evidence to the office

31  

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 1  department, unless such person acts in bad faith or with

 2  malice in providing such information or evidence.

 3         Section 604.  Section 517.221, Florida Statutes, is

 4  amended to read:

 5         517.221  Cease and desist orders.--

 6         (1)  The office department may issue and serve upon a

 7  person a cease and desist order whenever the office department

 8  has reason to believe that such person is violating, has

 9  violated, or is about to violate any provision of this

10  chapter, any rule or order promulgated by the commission or

11  office department, or any written agreement entered into with

12  the office department.

13         (2)  Whenever the office department finds that conduct

14  described in subsection (1) presents an immediate danger to

15  the public requiring an immediate final order, it may issue an

16  emergency cease and desist order reciting with particularity

17  the facts underlying such findings.  The emergency cease and

18  desist order is effective immediately upon service of a copy

19  of the order on the respondent named therein and remains

20  effective for 90 days. If the office department begins

21  nonemergency cease and desist proceedings under subsection

22  (1), the emergency cease and desist order remains effective

23  until conclusion of the proceedings under ss. 120.569 and

24  120.57.

25         (3)  The office department may impose and collect an

26  administrative fine against any person found to have violated

27  any provision of this chapter, any rule or order promulgated

28  by the commission or office department, or any written

29  agreement entered into with the office department in an amount

30  not to exceed $5,000 for each such violation.  All fines

31  

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 1  collected hereunder shall be deposited as received in the

 2  Anti-Fraud Trust Fund.

 3         Section 605.  Subsection (1) of section 517.241,

 4  Florida Statutes, is amended to read:

 5         517.241  Remedies.--

 6         (1)  Any person aggrieved by a final order of the

 7  office department may have the order reviewed as provided by

 8  chapter 120, the Administrative Procedure Act.

 9         Section 606.  Paragraph (c) of subsection (1) and

10  paragraph (b) of subsection (2) of section 517.301, Florida

11  Statutes, are amended to read:

12         517.301  Fraudulent transactions; falsification or

13  concealment of facts.--

14         (1)  It is unlawful and a violation of the provisions

15  of this chapter for a person:

16         (c)  In any matter within the jurisdiction of the

17  office department, to knowingly and willfully falsify,

18  conceal, or cover up, by any trick, scheme, or device, a

19  material fact, make any false, fictitious, or fraudulent

20  statement or representation, or make or use any false writing

21  or document, knowing the same to contain any false,

22  fictitious, or fraudulent statement or entry.

23         (2)  For purposes of ss. 517.311 and 517.312 and this

24  section, the term "investment" means any commitment of money

25  or property principally induced by a representation that an

26  economic benefit may be derived from such commitment, except

27  that the term "investment" does not include a commitment of

28  money or property for:

29         (b)  The purchase of tangible personal property through

30  a person not engaged in telephone solicitation, where said

31  

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 1  property is offered and sold in accordance with the following

 2  conditions:

 3         1.  There are no specific representations or guarantees

 4  made by the offeror or seller as to the economic benefit to be

 5  derived from the purchase;

 6         2.  The tangible property is delivered to the purchaser

 7  within 30 days after sale, except that such 30-day period may

 8  be extended by the office department if market conditions so

 9  warrant; and

10         3.  The seller has offered the purchaser a full refund

11  policy in writing, exercisable by the purchaser within 10 days

12  of the date of delivery of such tangible personal property,

13  except that the amount of such refund in no event shall exceed

14  the bid price in effect at the time the property is returned

15  to the seller. If the applicable sellers' market is closed at

16  the time the property is returned to the seller for a refund,

17  the amount of such refund shall be based on the bid price for

18  such property at the next opening of such market.

19         Section 607.  Subsection (3) of section 517.302,

20  Florida Statutes, is amended to read:

21         517.302  Criminal penalties; alternative fine;

22  Anti-Fraud Trust Fund; time limitation for criminal

23  prosecution.--

24         (3)  In lieu of a fine otherwise authorized by law, a

25  person who has been convicted of or who has pleaded guilty or

26  no contest to having engaged in conduct in violation of the

27  provisions of this chapter may be sentenced to pay a fine that

28  does not exceed the greater of three times the gross value

29  gained or three times the gross loss caused by such conduct,

30  plus court costs and the costs of investigation and

31  prosecution reasonably incurred.

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 1         (a)  There is created within the office department a

 2  trust fund to be known as the Anti-Fraud Trust Fund.  Any

 3  amounts assessed as costs of investigation and prosecution

 4  under this subsection shall be deposited in the trust fund.

 5  Funds deposited in such trust fund shall be used, when

 6  authorized by appropriation, for investigation and prosecution

 7  of administrative, civil, and criminal actions arising under

 8  the provisions of this chapter. Funds may also be used to

 9  improve the public's awareness and understanding of prudent

10  investing.

11         (b)  The office department shall report to the

12  Executive Office of the Governor annually by November 15, the

13  amounts deposited into the Anti-Fraud Trust Fund during the

14  previous fiscal year.  The Executive Office of the Governor

15  shall distribute these reports to the President of the Senate

16  and the Speaker of the House of Representatives.

17         Section 608.  Subsections (1) and (2) of section

18  517.313, Florida Statutes, are amended to read:

19         517.313  Destroying certain records; reproduction.--

20         (1)  The commission and office may department is

21  authorized to photograph, microphotograph, or reproduce on

22  film or prints documents, records, data, and information of a

23  permanent character.

24         (2)  The commission and office may department is

25  authorized to destroy any of said documents after audit of the

26  office has been completed for the period embracing the dates

27  of said instruments, after complying with the provisions of

28  chapter 119.

29         Section 609.  Section 517.315, Florida Statutes, is

30  amended to read:

31  

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 1         517.315  Fees.--All fees and charges of any nature

 2  collected by the office department pursuant to this chapter,

 3  except the fees and charges collected pursuant to s. 517.131,

 4  shall be paid into the State Treasury and credited to the

 5  General Revenue Fund; and an appropriation shall be made

 6  annually of necessary funds for the administration of the

 7  provisions of this chapter.

 8         Section 610.  Section 517.32, Florida Statutes, is

 9  amended to read:

10         517.32  Exemption from excise tax, certain obligations

11  to pay.--There shall be exempt from all excise taxes imposed

12  by chapter 201 all promissory notes, nonnegotiable notes, and

13  other written obligations to pay money bearing dates

14  subsequent to July 1, 1957, when the maker thereof is a

15  security dealer registered by the office department under this

16  chapter and when such promissory note, nonnegotiable note or

17  notes, or other written obligation to pay money shall be for

18  the duration of 30 days or less and secured by pledge or

19  deposit, as collateral security for the payment thereof,

20  security or securities as defined in s. 517.021, provided all

21  excise taxes imposed by chapter 201 shall have been paid upon

22  such collateral security.

23         Section 611.  Paragraph (b) of subsection (1) of

24  section 518.115, Florida Statutes, is amended to read:

25         518.115  Power of fiduciary or custodian to deposit

26  securities in a central depository.--

27         (1)

28         (b)  A bank or a trust company so depositing securities

29  with a clearing corporation shall be subject to such rules and

30  regulations with respect to the making and maintenance of such

31  deposit as, in the case of state-chartered institutions, the

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 1  Financial Services Commission Department of Banking and

 2  Finance and, in the case of national banking associations, the

 3  Comptroller of the Currency may from time to time issue.

 4         Section 612.  Paragraph (b) of subsection (1) of

 5  section 518.116, Florida Statutes, is amended to read:

 6         518.116  Power of certain fiduciaries and custodians to

 7  deposit United States Government and agency securities with a

 8  Federal Reserve bank.--

 9         (1)

10         (b)  A bank or trust company so depositing securities

11  with a Federal Reserve Bank shall be subject to such rules and

12  regulations with respect to the making and maintenance of such

13  deposits as, in the case of state-chartered institutions, the

14  Financial Services Commission Department of Banking and

15  Finance and, in the case of national banking associations, the

16  Comptroller of the Currency may from time to time issue.  The

17  records of such bank or trust company shall at all times show

18  the ownership of the securities held in such account.

19         Section 613.  Section 518.15, Florida Statutes, is

20  amended to read:

21         518.15  Bonds or motor vehicle tax anticipation

22  certificates legal investments and security.--Notwithstanding

23  any restrictions on investments contained in any law of this

24  state, the state and all public officers, municipal

25  corporations, political subdivisions, and public bodies, all

26  banks, bankers, trust companies, savings banks, building and

27  loan associations, savings and loan associations, investment

28  companies, and all persons carrying on an insurance business,

29  and all executors, administrators, guardians, trustees, and

30  other fiduciaries may legally invest any sinking funds, moneys

31  or other funds belonging to them or within their control in

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 1  bonds or motor vehicle anticipation certificates issued under

 2  authority of s. 18, Art. XII of the State Constitution of 1885

 3  as adopted by s. 9(d) of Art. XII, 1968 revised constitution,

 4  and the additional provisions of s. 9(d), and such bonds or

 5  certificates shall be authorized security for all public

 6  deposits, including, but not restricted to, deposits as

 7  authorized in s. 17.57 s. 18.10, it being the purpose of this

 8  act to authorize any person, firm or corporation, association,

 9  political subdivision, body, and officer, public or private,

10  to use any funds owned or controlled by them, including, but

11  not limited to, sinking, insurance, investment, retirement,

12  compensation, pension, and trust funds, and funds held on

13  deposit, for the purchase of any such bonds or anticipation

14  certificates, up to the amount as authorized by law to be

15  invested in any type of security, including United States

16  Government Bonds.

17         Section 614.  Section 518.151, Florida Statutes, is

18  amended to read:

19         518.151  Higher education bonds or certificates legal

20  investments and security.--Notwithstanding any restrictions on

21  investments contained in any law of this state, the state and

22  all public officers, municipal corporations, political

23  subdivisions, and public bodies, all banks, bankers, trust

24  companies, savings banks, building and loan associations,

25  savings and loan associations, investment companies, and all

26  persons carrying on an insurance business, and all executors,

27  administrators, guardians, trustees, and other fiduciaries may

28  legally invest any sinking funds, moneys or other funds

29  belonging to them or within their control in higher education

30  bonds or certificates issued under authority of s.  19, Art.

31  XII of the State Constitution of 1885 or of s. 9(a), Art. XII

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 1  of the constitution as revised in 1968, as amended, and such

 2  bonds or certificates shall be authorized security for all

 3  public deposits, including, but not restricted to, deposits as

 4  authorized in s. 17.57 s. 18.10, it being the purpose of this

 5  act to authorize any person, firm or corporation, association,

 6  political subdivision, body, and officer, public or private,

 7  to use any funds owned or controlled by them, including, but

 8  not limited to, sinking, insurance, investment, retirement,

 9  compensation, pension, and trust funds, and funds held on

10  deposit, for the purchase of any such bonds or certificates,

11  up to the amount as authorized by law to be invested in any

12  type of security, including United States Government Bonds.

13         Section 615.  Section 518.152, Florida Statutes, is

14  amended to read:

15         518.152  Puerto Rican bonds or obligations, legal

16  investments and securities.--Notwithstanding any restrictions

17  on investments contained in any law of this state, all public

18  officers and public bodies of the state, counties, municipal

19  corporations, and other political subdivisions; all banks,

20  bankers, trust companies, savings banks, building and loan

21  associations, savings and loan associations, investment

22  companies, and other persons carrying on a banking business;

23  all insurance companies, insurance associations and other

24  persons carrying on an insurance business; all persons holding

25  in trust any pension, health and welfare, and vacation funds;

26  all administrators, executors, guardians, trustees, and other

27  fiduciaries of any public, quasi-public, or private fund or

28  estate; and all other persons authorized to invest in bonds or

29  other obligations may legally invest any sinking funds,

30  moneys, or other funds belonging to them or within their

31  control in bonds or other obligations issued by the

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 1  Commonwealth of Puerto Rico, its agencies, authorities,

 2  instrumentalities, municipalities, or political subdivisions,

 3  provided such agency, authority, instrumentality,

 4  municipality, or political subdivision has not, within 5 years

 5  prior to the making of such investment, defaulted for more

 6  than 90 days in the payment of any part of the principal or

 7  interest of its bonded indebtedness.  Such bonds or

 8  obligations shall be authorized security for all public

 9  deposits, including, but not restricted to, deposits as

10  authorized in s. 17.57 s. 18.10, it being the purpose of this

11  section to authorize any person, firm, corporation,

12  association, political subdivision, body, and officer, public

13  or private, to use any funds owned or controlled by them,

14  including, but not limited to, sinking, insurance, investment,

15  retirement, compensation, pension and trust funds, and funds

16  held on deposit, for the purchase of any such bonds or

17  obligations up to the amount as authorized by law to be

18  invested in any type of security, including United States

19  Government Bonds. However, nothing contained in this section

20  shall be construed as relieving any person from any duty of

21  exercising reasonable care in selecting securities.

22         Section 616.  Section 519.101, Florida Statutes, is

23  amended to read:

24         519.101  Florida equity exchange feasibility study;

25  structure, operation, and regulation.--

26         (1)  There may be created one or more Florida equity

27  exchanges, with one or more offices each, upon a determination

28  by the Office of Financial Institutions and Securities

29  Regulation of the Financial Services Commission Comptroller

30  that each such exchange has a reasonable promise of successful

31  operation, will promote economic development, will produce net

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 1  economic benefits in the state, and will not expose the public

 2  to undue risk of financial loss.  This determination shall be

 3  based on the results of a feasibility study concerning the

 4  possible structure, operation, and regulation of each such

 5  exchange, to be carried out under the supervision of the

 6  office Comptroller.  The Secretary of Commerce shall provide

 7  the Comptroller any needed advice on economic development

 8  aspects of the feasibility study.  Said feasibility study

 9  shall evaluate to what extent securities laws may limit the

10  transferability of investments in which any exchange would

11  deal; to what extent companies financed through securities in

12  which the exchange would deal would prefer a stable group of

13  investors; to what extent the particular investment objectives

14  of potential participants in any exchange might be

15  inconsistent with an exchange operation; and the possibility

16  that the frequency of investment opportunities of the type in

17  which an exchange would deal would be too low to economically

18  operate any exchange.  The determination of the office

19  Comptroller shall constitute a final order as defined in s.

20  120.52 and shall be subject to the provisions of chapter 120.

21  Nothing in this section, however, shall be construed to

22  require the expenditure of state funds for the purpose of

23  conducting any such feasibility study.  For the purposes of

24  this section, the term "exchange" shall apply to any such

25  Florida equity exchange proposed or created under this

26  section.

27         (2)  The purpose of the exchange shall be to provide a

28  marketplace for the negotiation, arrangement, exchange, sale,

29  purchase, brokerage, syndication, and underwriting, and all

30  activities incidental thereto, of investment opportunities, in

31  

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 1  an institutionalized and, to the maximum extent possible,

 2  self-regulated fashion.

 3         (3)  Within 30 days following such determination, a

 4  committee shall be appointed to write the constitution and

 5  bylaws of the exchange.  The office Comptroller may provide

 6  technical assistance to the committee on the development of

 7  the constitution and bylaws of the exchange.  The committee

 8  shall consist of 15 members, 11 members to be appointed by the

 9  Governor, 2 members to be appointed by the Speaker of the

10  House of Representatives, and 2 members to be appointed by the

11  President of the Senate.  The chair shall be elected by a

12  majority of the committee.  The committee shall transmit such

13  proposed constitution, bylaws, and other recommendations for

14  the approval of the office Comptroller no later than 90 days

15  following the first meeting of the committee.  In reviewing

16  the constitution and the bylaws of the exchange, as well as

17  any other recommendations made to the office Comptroller by

18  the committee, the office Comptroller shall consider whether

19  such constitution, bylaws, and recommendations are reasonably

20  consistent with the public interest and the efficient

21  functioning of the exchange.  The office Comptroller shall

22  approve the constitution and bylaws of the exchange if he or

23  she finds that they specifically describe the types of

24  business that the exchange will conduct, that such business

25  activities are not inconsistent with state or federal law,

26  that the form of business organization of the exchange

27  complies with statutory requirements, and that the interest of

28  owners or members of the exchange would be adequately

29  protected.  The submission of the proposed constitution and

30  bylaws to the office Comptroller shall be deemed an

31  

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 1  application for a license and shall be subject to the

 2  provisions of s. 120.80(9).

 3         (4)  The exchange shall have full authority to function

 4  60 days after its constitution and bylaws are approved by the

 5  office Comptroller.  The initial Board of Governors of the

 6  exchange shall consist of the members of the committee who

 7  shall serve until the first election pursuant to the

 8  constitution and bylaws.  If the constitution and bylaws are

 9  disapproved by the office Comptroller, the committee, in

10  consultation with the office Comptroller, shall have 60 days

11  from the date of such disapproval within which to submit an

12  acceptable constitution and bylaws.

13         (5)  The constitution and bylaws of the exchange shall

14  include provision that:

15         (a)  There shall be no less than 9 nor more than 15

16  governors of the exchange, at least one-third of whom shall

17  not be members of the exchange.

18         (b)  The principal offices of each exchange and the

19  principal offices of its members shall be located within this

20  state for the purpose of conducting the type of business

21  described in subsection (2).  Any exchange may have such other

22  offices around the state as it deems necessary from time to

23  time, subject to a determination by the office Comptroller

24  that such additional offices will be necessary for the

25  efficient operation of the exchange and will be in the public

26  interest.

27         (c)  All members and applicants for membership on the

28  exchange shall submit all financial information reasonably

29  required by the office Comptroller.

30         (d)  The exchange shall establish or participate in a

31  security fund which shall be capitalized or underwritten in

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 1  such form and amount as will reasonably protect persons

 2  transacting business through the exchange from any harm or

 3  loss occasioned by the insolvency of any member of the

 4  exchange.  The formation of such security fund and the

 5  adequacy of the financial security provided thereby shall be

 6  subject to the approval of the Office of Financial

 7  Institutions and Securities Regulation Department of Banking

 8  and Finance based upon the types and amounts of transactions

 9  effected through the facilities of the exchange.

10         (e)  Rules shall be adopted prescribing eligibility for

11  membership and the voting power, duties, and rights to

12  participate in the conduct and management of the affairs of

13  the exchange by the members thereof, such rights and duties to

14  include, without limitation, the manner and form of conducting

15  business, financial stability requirements, dues, membership

16  fees, resolution of dispute mechanisms, and all other matters

17  necessary or appropriate to conduct any business permitted

18  herein; however, such rules shall not impose any limit on the

19  number of members of any such exchange.  Any amendments to the

20  constitution and bylaws shall be subject to the approval of

21  the office Comptroller.

22         (f)  Elections to the Board of Governors of the

23  exchange shall be held once every 2 years, with those persons

24  receiving the greatest number of votes cast being elected

25  thereto.

26         (6)  If the exchange contemplated by this section is

27  established, the office Comptroller shall furnish the chairs

28  of the finance and taxation committees of the Legislature with

29  copies of its constitution and bylaws. Upon receipt of the

30  constitution and bylaws, the Legislature shall consider what

31  

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 1  tax policy and tax exemptions are needed to facilitate

 2  successful operation of the exchange.

 3         (7)  If the exchange contemplated by this section is

 4  finally established, the Financial Services Commission

 5  Comptroller shall forthwith adopt rules providing for the

 6  reimbursement by the exchange or any member thereof of the

 7  actual costs incurred by the office Comptroller in connection

 8  with the regulation and supervision of the exchange.  As used

 9  in this section, "actual costs" means all direct and indirect

10  costs and expenses incurred by the office Comptroller in

11  connection with the exchange including, without limitation,

12  general administrative costs, travel expenses, salaries, and

13  other benefits given to persons involved in the regulation and

14  supervision of the exchange.  The office Comptroller shall

15  have the power to make any allocations that are deemed

16  reasonable and necessary and may require the exchange or any

17  members to pay interim assessments related to estimated final

18  assessments.

19         (8)  The Florida securities laws and rules shall apply

20  to the exchange and to its members.

21         (9)  The Financial Services Commission Comptroller may

22  establish limitations on investments in members of the

23  exchange by any person or company, consistent with the public

24  interest and the efficient functioning of the exchange.

25         Section 617.  Subsection (3) of section 520.02, Florida

26  Statutes, is amended, present subsections (4) through (17) of

27  that section are renumbered as (5) through (18), respectively,

28  and a new subsection (4) is added to that section to read:

29         520.02  Definitions.--In this act, unless the context

30  or subject matter otherwise requires:

31  

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 1         (3)  "Commission" means the Financial Services

 2  Commission "Department" means the Department of Banking and

 3  Finance.

 4         (4)  "Office" means the Office of Financial

 5  Institutions and Securities Regulation of the commission.

 6         Section 618.  Subsections (2), (3), (4), and (5) of

 7  section 520.03, Florida Statutes, are amended to read:

 8         520.03  Licenses.--

 9         (2)  An application for a license under this part must

10  be submitted to the office department in such form as the

11  commission department may prescribe by rule.  If the office

12  department determines that an application should be granted,

13  it shall issue the license for a period not to exceed 2 years.

14  A nonrefundable application fee of $175 shall accompany an

15  initial application for the principal place of business and

16  each application for a branch location of a retail installment

17  seller who is required to be licensed under this chapter.

18         (3)  The renewal fee for a motor vehicle retail

19  installment seller license shall be $175.  The commission

20  department shall establish by rule biennial licensure periods

21  and procedures for renewal of licenses.  A license that is not

22  renewed by the end of the biennium established by the

23  commission department shall revert from active to inactive

24  status.  An inactive license may be reactivated within 6

25  months after becoming inactive upon filing a completed

26  reactivation form, payment of the renewal fee, and payment of

27  a reactivation fee equal to the renewal fee.  A license that

28  is not reactivated within 6 months after becoming inactive

29  automatically expires.

30         (4)  Each license shall specify the location for which

31  it is issued and must be conspicuously displayed at that

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 1  location. Prior to relocating a principal place of business or

 2  any branch location, the licensee must provide to the office

 3  department notice of the relocation in a form prescribed by

 4  commission department rule. A licensee may not transact

 5  business as a motor vehicle retail installment seller except

 6  under the name by which it is licensed. Licenses issued under

 7  this part are not transferable or assignable.

 8         (5)  The office department may deny an initial

 9  application for a license under this part if the applicant or

10  any person with power to direct the management or policies of

11  the applicant is the subject of a pending criminal prosecution

12  or governmental enforcement action, in any jurisdiction, until

13  conclusion of such criminal prosecution or enforcement action.

14         Section 619.  Subsections (4) and (9) of section

15  520.07, Florida Statutes, are amended to read:

16         520.07  Requirements and prohibitions as to retail

17  installment contracts.--

18         (4)  The amount, if any, included for insurance which

19  may be purchased by the holder of the retail installment

20  contract may not exceed the applicable premiums chargeable in

21  accordance with the rates filed with the Office of Insurance

22  Regulation of the Commission Department of Insurance.  If dual

23  interest insurance on the motor vehicle is purchased by the

24  holder, it shall, within 30 days after execution of the retail

25  installment contract, send or cause to be sent to the buyer a

26  policy or policies or certificate of insurance, written by an

27  insurance company authorized to do business in this state,

28  clearly setting forth the amount of the premium, the kind or

29  kinds of insurance, the coverages, and all the terms,

30  exceptions, limitations, restrictions, and conditions of the

31  contract or contracts of insurance.  Nothing in this act shall

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 1  impair or abrogate the right of a buyer, as defined herein, to

 2  procure insurance from an agent and company of his or her own

 3  selection as provided by the insurance laws of this state; and

 4  nothing contained in this act shall modify, amend, alter, or

 5  repeal any of the insurance laws of the state, including any

 6  such laws enacted by the 1957 Legislature.

 7         (9)  The office department may order a seller to refund

 8  any amounts assessed and charged on a retail installment

 9  contract which exceed the maximum charges provided by this act

10  or by rules of the commission department.

11         Section 620.  Subsection (3) of section 520.31, Florida

12  Statutes, is amended, present subsections (4) through (17) of

13  that section are renumbered as (5) through (18), respectively,

14  and a new subsection (4) is added to that section to read:

15         520.31  Definitions.--Unless otherwise clearly

16  indicated by the context, the following words when used in

17  this act, for the purposes of this act, shall have the

18  meanings respectively ascribed to them in this section:

19         (3)  "Commission" means the Financial Services

20  Commission "Department" means the Department of Banking and

21  Finance.

22         (4)  "Office" means the Office of Financial

23  Institutions and Securities Regulation of the commission.

24         Section 621.  Subsections (2), (3), (4), and (5) of

25  section 520.32, Florida Statutes, are amended to read:

26         520.32  Licenses.--

27         (2)  An application for a license under this part must

28  be submitted to the office department in such form as the

29  commission department may prescribe by rule.  If the office

30  department determines that an application should be granted,

31  it shall issue the license for a period not to exceed 2 years.

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 1  A nonrefundable application fee of $175 shall accompany an

 2  initial application for the principal place of business and

 3  each application for a branch location of a retail installment

 4  seller.

 5         (3)  The renewal fee for a retail seller license shall

 6  be $175. Biennial licensure periods and procedures for renewal

 7  of licenses may also be established by the commission

 8  department by rule.  A license that is not renewed at the end

 9  of the biennium established by the commission department shall

10  revert from active to inactive status.  An inactive license

11  may be reactivated within 6 months after becoming inactive

12  upon filing a completed reactivation form, payment of the

13  renewal fee, and payment of a reactivation fee equal to the

14  renewal fee.  A license that is not reactivated within 6

15  months after becoming inactive automatically expires.

16         (4)  Each license must specify the location for which

17  it is issued and must be conspicuously displayed at that

18  location. If a licensee's principal place of business or

19  branch location changes, the licensee shall notify the office

20  department and the office department shall endorse the change

21  of location without charge.  A licensee may not transact

22  business as a retail installment seller except under the name

23  by which it is licensed.  A license issued under this part is

24  not transferable or assignable.

25         (5)  The office department may deny an initial

26  application for a license under this part if the applicant or

27  any person with power to direct the management or policies of

28  the applicant is the subject of a pending criminal prosecution

29  or governmental enforcement action, in any jurisdiction, until

30  conclusion of such criminal prosecution or enforcement action.

31  

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 1         Section 622.  Subsection (8) of section 520.34, Florida

 2  Statutes, is amended to read:

 3         520.34  Retail installment contracts.--

 4         (8)  The seller under any retail installment contract

 5  shall, within 30 days after execution of the contract, deliver

 6  or mail or cause to be delivered or mailed to the buyer at his

 7  or her aforesaid address any policy or policies of insurance

 8  the seller has agreed to purchase in connection therewith, or

 9  in lieu thereof a certificate or certificates of such

10  insurance. The amount, if any, included for insurance shall

11  not exceed the applicable premiums chargeable in accordance

12  with the rates filed with the Office of Insurance Regulation

13  of the commission Department of Insurance; if any such

14  insurance is canceled, unearned insurance premium refunds and

15  any unearned finance charges thereon received by the holder

16  shall, at his or her option, be credited to the final maturing

17  installments of the contract or paid to the buyer, except to

18  the extent applied toward the payment for similar insurance

19  protecting the interests of the seller and the holder or

20  either of them.  The finance charge on the original

21  transaction shall be separately computed:

22         (a)  With the premium for the canceled or adjusted

23  insurance included in the "amount financed"; and

24         (b)  With the premium for the canceled insurance or the

25  amount of the premium adjustment excluded from the "amount

26  financed."

27  

28  The difference in the finance charge resulting from these

29  computations shall be the portion of the finance charge

30  attributable to the canceled or adjusted insurance, and the

31  unearned portion thereof shall be determined by the use of the

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 1  rule of 78ths.  "Cancellation of insurance" occurs at such

 2  time as the seller or holder receives from the insurance

 3  carrier the proper refund of unearned insurance premiums.

 4  Nothing in this act shall impair or abrogate the right of a

 5  buyer to procure insurance from an agent and company of his or

 6  her own selection, as provided by the insurance laws of this

 7  state; and nothing contained in this act shall modify, alter,

 8  or repeal any of the insurance laws of this state.

 9         Section 623.  Subsections (2), (3), (4), and (5) of

10  section 520.52, Florida Statutes, are amended to read:

11         520.52  Licensees.--

12         (2)  An application for a license under this part must

13  be submitted to the office department in such form as the

14  commission department may prescribe by rule.  If the office

15  department determines that an application should be granted,

16  it shall issue the license for a period not to exceed 2 years.

17  A nonrefundable application fee of $175 shall accompany an

18  initial application for the principal place of business and

19  each branch location of a sales finance company.

20         (3)  The renewal fee for a sales finance company

21  license shall be $175.  Biennial licensure periods and

22  procedures for renewal of licenses may also be established by

23  the commission department by rule.  A license that is not

24  renewed at the end of the biennium established by the

25  commission department shall revert from active to inactive

26  status.  An inactive license may be reactivated within 6

27  months after becoming inactive upon filing a completed

28  reactivation form, payment of the renewal fee, and payment of

29  a reactivation fee equal to the renewal fee.  A license that

30  is not reactivated within 6 months after becoming inactive

31  automatically expires.

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 1         (4)  Each license must specify the location for which

 2  it is issued and must be conspicuously displayed at that

 3  location. If a licensee's principal place of business or

 4  branch location changes, the licensee shall notify the office

 5  department and the office department shall endorse the change

 6  of location without charge.  A licensee may not transact

 7  business as a sales finance company except under the name by

 8  which it is licensed.  A license issued under this part is not

 9  transferable or assignable.

10         (5)  The office department may deny an initial

11  application for a license under this part if the applicant or

12  any person with power to direct the management or policies of

13  the applicant is the subject of a pending criminal prosecution

14  or governmental enforcement action, in any jurisdiction, until

15  conclusion of such criminal prosecution or enforcement action.

16         Section 624.  Subsection (6) of section 520.61, Florida

17  Statutes, is amended, present subsections (7) through (21) of

18  that section are renumbered as (8) through (22), respectively,

19  and a new subsection (7) is added to that section to read:

20         520.61  Definitions.--As used in this act:

21         (6)  "Commission" means the Financial Services

22  Commission "Department" means the Department of Banking and

23  Finance.

24         (7)  "Office" means the Office of Financial

25  Institutions and Securities Regulation of the commission.

26         Section 625.  Section 520.63, Florida Statutes, is

27  amended to read:

28         520.63  Licensees.--

29         (1)  A person may not engage in or transact any

30  business as a home improvement finance seller or operate a

31  branch without first obtaining a license from the office

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 1  department, except that a banking institution, trust company,

 2  savings and loan association, credit union authorized to do

 3  business in this state, or licensee under ss. 494.006-494.0077

 4  is not required to obtain a license to engage in home

 5  improvement financing.

 6         (2)  An application for a license under this part must

 7  be submitted to the office department in such form as the

 8  commission department may prescribe by rule.  If the office

 9  department determines that an application should be granted,

10  it shall issue the license for a period not to exceed 2 years.

11  A nonrefundable application fee of $175 shall accompany an

12  initial application for the principal place of business and

13  each application for a branch location of a home improvement

14  finance seller.

15         (3)  The renewal fee for a home improvement finance

16  license shall be $175.  Biennial licensure periods and

17  procedures for renewal of licenses may also be established by

18  the commission department by rule.  A license that is not

19  renewed at the end of the biennium established by the

20  commission department shall automatically revert from active

21  to inactive status.  An inactive license may be reactivated

22  within 6 months after becoming inactive upon filing a

23  completed reactivation form, payment of the renewal fee, and

24  payment of a reactivation fee equal to the renewal fee.  A

25  license that is not reactivated within 6 months after becoming

26  inactive automatically expires.

27         (4)  Each license must specify the location for which

28  it is issued and must be conspicuously displayed at that

29  location. If a home improvement finance seller's principal

30  place of business or any branch location changes, the licensee

31  shall notify the office department and the office department

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 1  shall endorse the change of location without charge.  A

 2  licensee may not transact business as a home improvement

 3  finance seller except under the name by which it is licensed.

 4  A license issued under this part is not transferable or

 5  assignable.

 6         (5)  The office department may deny an initial

 7  application for a license under this part if the applicant or

 8  any person with power to direct the management or policies of

 9  the applicant is the subject of a pending criminal prosecution

10  or governmental enforcement action, in any jurisdiction, until

11  conclusion of such criminal prosecution or enforcement action.

12         (6)  Each seller shall designate and maintain an agent

13  in the state for service of process.

14         Section 626.  Subsections (1) and (5) of section

15  520.73, Florida Statutes, are amended to read:

16         520.73  Home improvement contract; form and content;

17  separate disclosures.--

18         (1)  Every home improvement contract shall be evidenced

19  by a written agreement and shall be signed by the parties.

20  The home improvement contract shall be in the form approved by

21  the office department and shall contain:

22         (a)  The name, address, and license number of the home

23  improvement finance seller;

24         (b)  The names of the home improvement finance seller's

25  employees who solicited or negotiated the home improvement

26  contract;

27         (c)  The approximate dates when the work will begin and

28  will be completed; and

29         (d)  A description of the work to be done and the

30  materials to be used.

31  

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 1         (5)  The home improvement contract shall contain the

 2  following notice, in substantially this form, and such other

 3  notices required by the public interest and specified by the

 4  commission department by rule, in 10-point boldfaced type

 5  directly above the space provided for the signature of the

 6  owner:

 7  

 8                         Notice To Owner

 9  

10         a.  Do not sign this home improvement contract in

11  blank.

12         b.  You are entitled to a copy of the contract at the

13  time you sign.  Keep it to protect your legal rights.

14         c.  This home improvement contract may contain a

15  mortgage or otherwise create a lien on your property that

16  could be foreclosed on if you do not pay.  Be sure you

17  understand all provisions of the contract before you sign.

18         Section 627.  Subsection (3) of section 520.76, Florida

19  Statutes, is amended to read:

20         520.76  Insurance provisions, procurement, rates.--

21         (3)  The amount, if any, included for such insurance

22  shall not exceed the applicable premiums chargeable in

23  accordance with rates filed with the Office of Insurance

24  Regulation of the commission Department of Insurance.  If any

25  such group credit life or other insurance is canceled, the

26  refund for unearned insurance premiums received or receivable

27  by the holder of the home improvement contract or the excess

28  of the amount included in the contract for insurance over the

29  premiums paid or payable by the holder of the contract

30  together with, in either case, the unearned portion of the

31  finance charge or other interest applicable thereto shall be

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 1  credited to the final maturing installments of the home

 2  improvement contract.  However, no such credit need be made if

 3  the amount would be less than $1.

 4         Section 628.  Subsection (2) of section 520.81, Florida

 5  Statutes, is amended to read:

 6         520.81  Completion certificate.--

 7         (2)  The form of the certificate shall be prescribed by

 8  the commission department.

 9         Section 629.  Subsection (2) of section 520.83, Florida

10  Statutes, is amended to read:

11         520.83  Cancellation of contract on payment in full.--

12         (2)  For all other home improvement contracts, the

13  holder, upon payment in full by the owner of the time sales

14  price and other amounts lawfully due under the home

15  improvement contract, shall furnish the owner with such

16  instruments as the commission department may by rule

17  regulation provide.

18         Section 630.  Subsections (10) and (12) of section

19  520.90, Florida Statutes, are amended to read:

20         520.90  Prohibited acts.--The following acts are

21  prohibited:

22         (10)  Willful failure to notify the office department

23  of any change of control in ownership, management, business

24  name, or location.

25         (12)  Willful failure to comply with any order, demand,

26  or requirement lawfully made by the office department.

27         Section 631.  Section 520.994, Florida Statutes, is

28  amended to read:

29         520.994  Powers of office department.--

30         (1)  The office department may issue and serve

31  subpoenas to compel the attendance of witnesses and the

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 1  production of documents, papers, books, records, and other

 2  evidence before it in any matter pertaining to this chapter.

 3  The office department may administer oaths and affirmations to

 4  any person whose testimony is required.  If any person refuses

 5  to testify, produce books, records, and documents, or

 6  otherwise refuses to obey a subpoena issued under this

 7  section, the office department may present its petition to a

 8  court of competent jurisdiction in or for the county in which

 9  such person resides or has its principal place of business,

10  whereupon the court shall issue its rule nisi requiring such

11  person to obey forthwith the subpoena issued by the office

12  department or show cause for failing to obey such subpoena.

13  Unless the person shows sufficient cause for failing to obey

14  the subpoena, the court shall forthwith direct such person to

15  obey the subpoena, subject to such punishment as the court may

16  direct, including, but not limited to, the restraint, by

17  injunction or by appointment of a receiver, of any transfer,

18  pledge, assignment, or other disposition of such person's

19  assets or any concealment, alteration, destruction, or other

20  disposition of subpoenaed books, records, or documents as the

21  court deems appropriate, until such person has fully complied

22  with such subpoena and the office department has completed its

23  investigation or examination. The office department is

24  entitled to the summary procedure provided in s. 51.011, and

25  the court shall advance the cause on its calendar.  Costs

26  incurred by the office department to obtain an order granting,

27  in whole or in part, its petition shall be taxed against the

28  subpoenaed person, and failure to comply with such order is a

29  contempt of court. Witnesses are entitled to the same fees and

30  mileage as they are entitled to by law for attending as

31  witnesses in the circuit court, unless such examination or

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 1  investigation is held at the place of business or residence of

 2  the witness.

 3         (2)  In addition to any other powers conferred upon it

 4  to enforce or administer this chapter, the office department

 5  may bring an action in any court of competent jurisdiction to

 6  enforce or administer any provision of this chapter, any rule

 7  or order adopted pursuant to this chapter, or any written

 8  agreement entered into with the office department.  In such

 9  action, the office department may seek temporary or permanent

10  injunction, appointment of a receiver or administrator, or an

11  order of restitution.  If in any such action the office

12  department alleges that five or more persons have been

13  defrauded by acts constituting violations of this chapter, it

14  shall state the circumstances constituting such fraud with

15  particularity and may seek any appropriate remedy at law or in

16  equity, provided the remedy does not impair any rights granted

17  by law to any holder in due course as defined in s. 673.302.

18         (3)  In addition to any other powers conferred upon it

19  to enforce or administer this chapter, the office department

20  may issue and serve upon a person a cease and desist order

21  whenever the office department finds that such person is

22  violating, has violated, or is about to violate any provision

23  of this chapter, any rule or order adopted pursuant to this

24  chapter, or any written agreement entered into with the office

25  department.  Any such order shall contain a notice of the

26  rights provided by ss. 120.569 and 120.57.

27         (4)  In addition to any other powers conferred upon it

28  to enforce or administer this chapter, the office department

29  may impose and collect an administrative fine against any

30  person found to have violated any provision of this chapter,

31  any rule or order adopted pursuant to this chapter, or any

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 1  written agreement entered into with the office department, in

 2  an amount not to exceed $1,000 for each violation.

 3         (5)  The office department shall administer and enforce

 4  this chapter. The commission department has authority to adopt

 5  rules pursuant to ss. 120.536(1) and 120.54 to implement the

 6  provisions of this chapter. The commission department may

 7  adopt rules to allow electronic submission of any form,

 8  document, or fee required by this chapter.

 9         Section 632.  Subsections (1), (2), and (4) of section

10  520.995, Florida Statutes, are amended to read:

11         520.995  Grounds for disciplinary action.--

12         (1)  The following acts are violations of this chapter

13  and constitute grounds for the disciplinary actions specified

14  in subsection (2):

15         (a)  Failure to comply with any provision of this

16  chapter, any rule or order adopted pursuant to this chapter,

17  or any written agreement entered into with the office

18  department;

19         (b)  Fraud, misrepresentation, deceit, or gross

20  negligence in any home improvement finance transaction or

21  retail installment transaction, regardless of reliance by or

22  damage to the buyer or owner;

23         (c)  Fraudulent misrepresentation, circumvention, or

24  concealment of any matter required to be stated or furnished

25  to a retail buyer or owner pursuant to this chapter,

26  regardless of reliance by or damage to the buyer or owner;

27         (d)  Willful imposition of illegal or excessive charges

28  in any retail installment transaction or home improvement

29  finance transaction;

30         (e)  False, deceptive, or misleading advertising by a

31  seller or home improvement finance seller;

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 1         (f)  Failure to maintain, preserve, and keep available

 2  for examination, all books, accounts, or other documents

 3  required by this chapter, by any rule or order adopted

 4  pursuant to this chapter, or by any agreement entered into

 5  with the office department;

 6         (g)  Refusal to permit inspection of books and records

 7  in an investigation or examination by the office department or

 8  refusal to comply with a subpoena issued by the office

 9  department;

10         (h)  Criminal conduct in the course of a person's

11  business as a seller, as a home improvement finance seller, or

12  as a sales finance company; or

13         (i)  Failure to timely pay any fee, charge, or fine

14  imposed or assessed pursuant to this chapter or any rule

15  adopted under this chapter.

16         (2)  Upon a finding by the office department that any

17  person has committed any of the acts set forth in subsection

18  (1), the office department may enter an order taking one or

19  more of the following actions:

20         (a)  Denying an application for a license pursuant to

21  this chapter;

22         (b)  Revoking or suspending a license previously

23  granted pursuant to this chapter;

24         (c)  Placing a licensee or an applicant for a license

25  on probation for a period of time and subject to such

26  conditions as the office department may specify;

27         (d)  Placing permanent restrictions or conditions upon

28  issuance or maintenance of a license pursuant to this chapter;

29         (e)  Issuing a reprimand; or

30         (f)  Imposing an administrative fine not to exceed

31  $1,000 for each such act.

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 1         (4)  It is sufficient cause for the office department

 2  to take any of the actions specified in subsection (2) as to

 3  any partnership, corporation, or association, if the office

 4  department finds grounds for such action as to any member of

 5  the partnership, as to any officer or director of the

 6  corporation or association, or as to any person with power to

 7  direct the management or policies of the partnership,

 8  corporation, or association.

 9         Section 633.  Section 520.996, Florida Statutes, is

10  amended to read:

11         520.996  Investigations and complaints.--

12         (1)(a)  The office department or its agent may, at

13  intermittent periods, make such investigations and

14  examinations of any licensee or other person as it deems

15  necessary to determine compliance with this chapter.  For such

16  purposes, it may examine the books, accounts, records, and

17  other documents or matters of any licensee or other person. It

18  shall have the power to compel the production of all relevant

19  books, records, and other documents and materials relative to

20  an examination or investigation.  Such investigations and

21  examinations shall not be made more often than once during any

22  12-month period unless the office department has good and

23  sufficient reason to believe the licensee is not complying

24  with the provisions of this chapter. Such examination fee

25  shall be calculated on an hourly basis and shall be rounded to

26  the nearest hour.

27         (b)  The office department shall conduct all

28  examinations at a convenient location in this state unless the

29  office department determines that it is more effective or

30  cost-efficient to perform an examination at the licensee's

31  out-of-state location. For an examination performed at the

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 1  licensee's out-of-state location, the licensee shall pay the

 2  travel expense and per diem subsistence at the rate provided

 3  by law for up to thirty 8-hour days per year for each examiner

 4  who participates in such an examination.  However, if the

 5  examination involves or reveals possible fraudulent conduct of

 6  the licensee, the licensee shall pay the travel expenses and

 7  per diem subsistence provided by law, without limitation, for

 8  each participating examiner.

 9         (2)  The examination expenses incurred by the office

10  department in each examination shall be paid by the licensee

11  examined.  The expenses of the office department incurred in

12  each examination of a home improvement finance seller or of an

13  employee representing such home improvement finance seller

14  shall be paid by the home improvement finance seller. Expenses

15  incurred for each examination of a sales finance company shall

16  be paid by it.  The examination expenses shall be paid by such

17  licensee examined or such other person obligated to pay such

18  examination expenses within 30 days after demand therefor by

19  the office department.

20         (3)  Any retail buyer or owner having reason to believe

21  that the provisions of this chapter have been violated may

22  file with the office or the Department of Financial Services a

23  written complaint setting forth the details of such alleged

24  violations and the office department upon receipt of such

25  complaint, may inspect the pertinent books, records, letters,

26  and contracts of the licensee and of the seller involved,

27  relating to such specific written complaint.

28         Section 634.  Section 520.9965, Florida Statutes, is

29  amended to read:

30         520.9965  Confidentiality of information relating to

31  investigations and examinations.--

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 1         (1)(a)  Except as otherwise provided by this section,

 2  information relative to an investigation or examination by the

 3  office department pursuant to this chapter, including any

 4  consumer complaint received by the office or the Department of

 5  Financial Services, is confidential and exempt from s.

 6  119.07(1) until the investigation or examination is completed

 7  or ceases to be active. The information compiled by the office

 8  department in such an investigation or examination shall

 9  remain confidential and exempt from s. 119.07(1) after the

10  office's department's investigation or examination is

11  completed or ceases to be active if the office department

12  submits the information to any law enforcement or

13  administrative agency for further investigation.  Such

14  information shall remain confidential and exempt from s.

15  119.07(1) until that agency's investigation is completed or

16  ceases to be active.  For purposes of this section, an

17  investigation or examination shall be considered "active" so

18  long as the office department or any law enforcement or

19  administrative agency is proceeding with reasonable dispatch

20  and has a reasonable good faith belief that the investigation

21  or examination may lead to the filing of an administrative,

22  civil, or criminal proceeding or to the denial or conditional

23  grant of a license, registration, or permit.  This section

24  shall not be construed to prohibit disclosure of information

25  which is required by law to be filed with the office

26  department and which, but for the investigation or

27  examination, would be subject to s. 119.07(1).

28         (b)  Except as necessary for the office department to

29  enforce the provisions of this chapter, a consumer complaint

30  and other information relative to an investigation or

31  examination shall remain confidential and exempt from s.

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 1  119.07(1) after the investigation or examination is completed

 2  or ceases to be active to the extent disclosure would:

 3         1.  Jeopardize the integrity of another active

 4  investigation or examination.

 5         2.  Reveal the name, address, telephone number, social

 6  security number, or any other identifying number or

 7  information of any complainant, customer, or account holder.

 8         3.  Disclose the identity of a confidential source.

 9         4.  Disclose investigative techniques or procedures.

10         5.  Reveal a trade secret as defined in s. 688.002.

11         (c)  In the event that office department personnel or

12  personnel of the former Department of Banking and Finance are

13  or have been involved in an investigation or examination of

14  such nature as to endanger their lives or physical safety or

15  that of their families, then the home addresses, telephone

16  numbers, places of employment, and photographs of such

17  personnel, together with the home addresses, telephone

18  numbers, photographs, and places of employment of spouses and

19  children of such personnel and the names and locations of

20  schools and day care facilities attended by the children of

21  such personnel are confidential and exempt from s. 119.07(1).

22         (d)  Nothing in this section shall be construed to

23  prohibit the office department from providing information to

24  any law enforcement or administrative agency.  Any law

25  enforcement or administrative agency receiving confidential

26  information in connection with its official duties shall

27  maintain the confidentiality of the information so long as it

28  would otherwise be confidential.

29         (e)  All information obtained by the office department

30  from any person which is only made available to the office

31  department on a confidential or similarly restricted basis

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 1  shall be confidential and exempt from s. 119.07(1).  This

 2  exemption shall not be construed to prohibit disclosure of

 3  information which is required by law to be filed with the

 4  office department or which is otherwise subject to s.

 5  119.07(1).

 6         (2)  If information subject to subsection (1) is

 7  offered in evidence in any administrative, civil, or criminal

 8  proceeding, the presiding officer may, in his or her

 9  discretion, prevent the disclosure of information which would

10  be confidential pursuant to paragraph (1)(b).

11         (3)  A privilege against civil liability is granted to

12  a person who furnishes information or evidence to the office

13  department, unless such person acts in bad faith or with

14  malice in providing such information or evidence.

15         Section 635.  Section 520.997, Florida Statutes, is

16  amended to read:

17         520.997  Books, accounts, and records.--

18         (1)  Every licensee shall maintain, at the principal

19  place of business, such books, accounts, and records of the

20  business conducted under the license issued for such place of

21  business as will enable the office department to determine

22  whether the business of the licensee contemplated by this

23  chapter is being operated in accordance with the provisions of

24  this chapter.  The licensee shall make all such books,

25  accounts, and records of business conducted under the license

26  available at a convenient location in this state upon request

27  of the office department.

28         (2)  A licensee, operating two or more licensed places

29  of business in this state, may maintain the general control

30  records of all such offices at any one of such offices, or at

31  any other office maintained by such licensee, upon the filing

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 1  of a written request with the office department designating

 2  therein the office at which such control records are

 3  maintained.

 4         (3)  All books, accounts, and records of licensees,

 5  including any cards used in a card system, shall be preserved

 6  and available for examination by the office department for at

 7  least 2 years after making the final entry therein.

 8         (4)  The commission may department is hereby authorized

 9  and empowered to prescribe the minimum information to be shown

10  in the books, accounts, and records of licensees so that such

11  records will enable the office department to determine

12  compliance with the provisions of this chapter.

13         (5)  A licensee that is the subject of a voluntary or

14  involuntary bankruptcy filing must provide notice of such

15  filing to the office department within 7 days after the filing

16  date.

17         Section 636.  Section 520.998, Florida Statutes, is

18  amended to read:

19         520.998  Regulatory Trust Fund.--All fees, charges, and

20  fines collected by the office department pursuant to this

21  chapter shall be deposited in the State Treasury to the credit

22  of the Regulatory Trust Fund under the office department.

23         Section 637.  Subsection (7) of section 526.141,

24  Florida Statutes, is amended to read:

25         526.141  Self-service gasoline stations; attendants;

26  regulations.--

27         (7)  The Chief Financial Officer Insurance

28  Commissioner, under her or his powers, duties, and functions

29  as State Fire Marshal, shall adopt promulgate rules and

30  regulations for the administration and enforcement of this

31  section, except for subsection (5) which shall be administered

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 1  and enforced by the Department of Agriculture and Consumer

 2  Services.

 3         Section 638.  Subsection (2) of section 537.003,

 4  Florida Statutes, is amended, present subsections (3) through

 5  (15) of that section are renumbered as (4) through (16),

 6  respectively, and a new subsection (3) is added to that

 7  section to read:

 8         537.003  Definitions.--As used in this act, unless the

 9  context otherwise requires:

10         (2)  "Commission" means the Financial Services

11  Commission "Department" means the Department of Banking and

12  Finance.

13         (3)  "Office" means the Office of Financial

14  Institutions and Securities Regulation of the commission.

15         Section 639.  Subsections (1) through (5), (9), and

16  (10) of section 537.004, Florida Statutes, are amended to

17  read:

18         537.004  License required; license fees.--

19         (1)  A person may not act as a title loan lender or own

20  or operate a title loan office unless such person has an

21  active title loan lender license issued by the office

22  department under this act.  A title loan lender may not own or

23  operate more than one title loan office unless the lender

24  obtains a separate title loan lender license for each title

25  loan office.

26         (2)  A person applying for licensure as a title loan

27  lender shall file with the office department an application,

28  the bond required by s. 537.005(3), a nonrefundable

29  application fee of $1,200, a nonrefundable investigation fee

30  of $200, and a complete set of fingerprints taken by an

31  authorized law enforcement officer.  The office department

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 1  shall submit such fingerprints to the Department of Law

 2  Enforcement for state processing, and the Department of Law

 3  Enforcement shall forward the fingerprints to the Federal

 4  Bureau of Investigation for national processing.

 5         (3)  If the office department determines that an

 6  application should be approved, the office department shall

 7  issue a license for a period not to exceed 2 years.

 8         (4)  A license shall be renewed biennially by filing a

 9  renewal form and a nonrefundable renewal fee of $1,200.  A

10  license that is not renewed by the end of the biennial period

11  shall automatically revert to inactive status. An inactive

12  license may be reactivated within 6 months after becoming

13  inactive by filing a reactivation form, payment of the

14  nonrefundable $1,200 renewal fee, and payment of a

15  nonrefundable reactivation fee of $600.  A license that is not

16  reactivated within 6 months after becoming inactive may not be

17  reactivated and shall automatically expire. The commission

18  department shall establish by rule the procedures for renewal

19  and reactivation of a license and shall adopt a renewal form

20  and a reactivation form.

21         (5)  Each license must be conspicuously displayed at

22  the title loan office. When a licensee wishes to move a title

23  loan office to another location, the licensee shall provide

24  prior written notice to the office department.

25         (9)  The commission department may adopt rules to allow

26  for electronic filing of applications, fees, and forms

27  required by this act.

28         (10)  All moneys collected by the office department

29  under this act shall be deposited into the Regulatory Trust

30  Fund of the office Department of Banking and Finance.

31  

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 1         Section 640.  Section 537.005, Florida Statutes, is

 2  amended to read:

 3         537.005  Application for license.--

 4         (1)  A verified application for licensure under this

 5  act, in the form prescribed by commission department rule,

 6  shall:

 7         (a)  Contain the name and the residence and business

 8  address of the applicant.  If the applicant is other than a

 9  natural person, the application shall contain the name and the

10  residence and business address of each ultimate equitable

11  owner of 10 percent or more of such entity and each director,

12  general partner, and executive officer of such entity.

13         (b)  State whether any individual identified in

14  paragraph (a) has, within the last 10 years, pleaded nolo

15  contendere to, or has been convicted or found guilty of, a

16  felony, regardless of whether adjudication was withheld.

17         (c)  Identify the county and municipality with the

18  street and number or location where the business is to be

19  conducted.

20         (d)  Contain additional information as the commission

21  department determines by rule to be necessary to ensure

22  compliance with this act.

23         (2)  Notwithstanding subsection (1), the application

24  need not state the full name and address of each officer,

25  director, and shareholder if the applicant is owned directly

26  or beneficially by a person who as an issuer has a class of

27  securities registered pursuant to s. 12 of the Securities

28  Exchange Act of 1934 or, pursuant to s. 13 or s. 15(d) of such

29  act, is an issuer of securities which is required to file

30  reports with the Securities and Exchange Commission, if the

31  person files with the office department any information,

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 1  documents, and reports required by such act to be filed with

 2  the Securities and Exchange Commission.

 3         (3)  An applicant for licensure shall file with the

 4  office department a bond, in the amount of $100,000 for each

 5  license, with a surety company qualified to do business in

 6  this state. However, in no event shall the aggregate amount of

 7  the bond required for a single title loan lender exceed $1

 8  million. In lieu of the bond, the applicant may establish a

 9  certificate of deposit or an irrevocable letter of credit in a

10  financial institution, as defined in s. 655.005, in the amount

11  of the bond. The original bond, certificate of deposit, or

12  letter of credit shall be filed with the office department,

13  and the office department shall be the beneficiary to that

14  document. The bond, certificate of deposit, or letter of

15  credit shall be in favor of the office department for the use

16  and benefit of any consumer who is injured pursuant to a title

17  loan transaction by the fraud, misrepresentation, breach of

18  contract, financial failure, or violation of any provision of

19  this act by the title loan lender. Such liability may be

20  enforced either by proceeding in an administrative action or

21  by filing a judicial suit at law in a court of competent

22  jurisdiction. However, in such court suit, the bond,

23  certificate of deposit, or letter of credit posted with the

24  office department shall not be amenable or subject to any

25  judgment or other legal process issuing out of or from such

26  court in connection with such lawsuit, but such bond,

27  certificate of deposit, or letter of credit shall be amenable

28  to and enforceable only by and through administrative

29  proceedings before the office department. It is the intent of

30  the Legislature that such bond, certificate of deposit, or

31  letter of credit shall be applicable and liable only for the

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 1  payment of claims duly adjudicated by order of the office

 2  department. The bond, certificate of deposit, or letter of

 3  credit shall be payable on a pro rata basis as determined by

 4  the office department, but the aggregate amount may not exceed

 5  the amount of the bond, certificate of deposit, or letter of

 6  credit.

 7         (4)  The office department shall approve an application

 8  and issue a license if the office department determines that

 9  the applicant satisfies the requirements of this act.

10         Section 641.  Paragraphs (a), (f), (h), and (o) of

11  subsection (1) and subsections (2) and (4) of section 537.006,

12  Florida Statutes, are amended to read:

13         537.006  Denial, suspension, or revocation of

14  license.--

15         (1)  The following acts are violations of this act and

16  constitute grounds for the disciplinary actions specified in

17  subsection (2):

18         (a)  Failure to comply with any provision of this act,

19  any rule or order adopted pursuant to this act, or any written

20  agreement entered into with the office department.

21         (f)  Failure to maintain, preserve, and keep available

22  for examination all books, accounts, or other documents

23  required by this act, by any rule or order adopted pursuant to

24  this act, or by any agreement entered into with the office

25  department.

26         (h)  Refusal to provide information upon request of the

27  office department, to permit inspection of books and records

28  in an investigation or examination by the office department,

29  or to comply with a subpoena issued by the office department.

30  

31  

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 1         (o)  Having demonstrated unworthiness, as defined by

 2  commission department rule, to transact the business of a

 3  title loan lender.

 4         (2)  Upon a finding by the office department that any

 5  person  has committed any of the acts set forth in subsection

 6  (1), the office department may enter an order taking one or

 7  more of the following actions:

 8         (a)  Denying an application for licensure under this

 9  act.

10         (b)  Revoking or suspending a license previously

11  granted pursuant to this act.

12         (c)  Placing a licensee or an applicant for a license

13  on probation for a period of time and subject to such

14  conditions as the office department specifies.

15         (d)  Issuing a reprimand.

16         (e)  Imposing an administrative fine not to exceed

17  $5,000 for each separate act or violation.

18         (4)  It is sufficient cause for the office department

19  to take any of the actions specified in subsection (2), as to

20  any entity other than a natural person, if the office

21  department finds grounds for such action as to any member of

22  such entity, as to any executive officer or director of the

23  entity, or as to any person with power to direct the

24  management or policies of the entity.

25         Section 642.  Paragraph (b) of subsection (2) of

26  section 527.008, Florida Statutes, is amended to read:

27         537.008  Title loan agreement.--

28         (2)  The following information shall also be printed on

29  all title loan agreements:

30  

31  

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 1         (b)  The name and address of the Department of

 2  Financial Services as well as a telephone number to which

 3  consumers may address complaints.

 4         Section 643.  Section 537.009, Florida Statutes, is

 5  amended to read:

 6         537.009  Recordkeeping; reporting; safekeeping of

 7  property.--

 8         (1)  Every title loan lender shall maintain, at the

 9  lender's title loan office, such books, accounts, and records

10  of the business conducted under the license issued for such

11  place of business as will enable the office department to

12  determine the licensee's compliance with this act.

13         (2)  The office department may authorize the

14  maintenance of books, accounts, and records at a location

15  other than the lender's title loan office. The office

16  department may require books, accounts, and records to be

17  produced and available at a reasonable and convenient location

18  in this state within a reasonable period of time after such a

19  request.

20         (3)  The title loan lender shall maintain the original

21  copy of each completed title loan agreement on the title loan

22  office premises, and shall not obliterate, discard, or destroy

23  any such original copy, for a period of at least 2 years after

24  making the final entry on any loan recorded in such office or

25  after an a department examination by the Office of Financial

26  Institutions and Securities Regulation, whichever is later.

27         (4)  Loan property which is delivered to a title loan

28  lender shall be securely stored and maintained at the title

29  loan office unless the loan property has been forwarded to the

30  appropriate state agency for the purpose of having a lien

31  recorded or deleted.

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 1         (5)  The commission department may prescribe by rule

 2  the books, accounts, and records, and the minimum information

 3  to be shown in the books, accounts, and records, of licensees

 4  so that such records will enable the office department to

 5  determine compliance with the provisions of this act.

 6         Section 644.  Subsection (2) and paragraph (c) of

 7  subsection (4) of section 537.011, Florida Statutes, are

 8  amended to read:

 9         537.011  Title loan charges.--

10         (2)  The annual percentage rate that may be charged for

11  a title loan may equal, but not exceed, the annual percentage

12  rate that must be computed and disclosed as required by the

13  federal Truth in Lending Act and Regulation Z of the Board of

14  Governors of the Federal Reserve System. The maximum annual

15  percentage rate of interest that may be charged is 12 times

16  the maximum monthly rate, and the maximum monthly rate must be

17  computed on the basis of one-twelfth of the annual rate for

18  each full month. The commission Department of Banking and

19  Finance shall establish by rule the rate for each day in a

20  fraction of a month when the period for which the charge is

21  computed is more or less than 1 month.

22         (4)  Any interest contracted for or received, directly

23  or indirectly, by a title loan lender, or an agent of the

24  title loan lender, in excess of the amounts authorized under

25  this chapter is prohibited and may not be collected by the

26  title loan lender or an agent of the title loan lender.

27         (c)  The office department may order a title loan

28  lender, or an agent of the title loan lender, to comply with

29  the provisions of paragraphs (a) and (b).

30  

31  

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 1         Section 645.  Paragraphs (b), (f), and (n) of

 2  subsection (1) of section 537.013, Florida Statutes, are

 3  amended to read:

 4         537.013  Prohibited acts.--

 5         (1)  A title loan lender, or any agent or employee of a

 6  title loan lender, shall not:

 7         (b)  Refuse to allow the office department to inspect

 8  completed title loan agreements, extensions of such

 9  agreements, or loan property during the ordinary operating

10  hours of the title loan lender's business or other times

11  acceptable to both parties.

12         (f)  Fail to exercise reasonable care, as defined by

13  commission department rule, in the safekeeping of loan

14  property or of titled personal property repossessed pursuant

15  to this act.

16         (n)  Act as a title loan lender under this act within a

17  place of business in which the licensee solicits or engages in

18  business outside the scope of this act if the office

19  department determines that the licensee's operation of and

20  conduct pertaining to such other business results in an

21  evasion of this act.  Upon making such a determination, the

22  office department shall order the licensee to cease and desist

23  from such evasion; provided, no licensee shall engage in the

24  pawnbroker business.

25         Section 646.  Section 537.016, Florida Statutes, is

26  amended to read:

27         537.016  Subpoenas; enforcement actions; rules.--

28         (1)  The office department may issue and serve

29  subpoenas to compel the attendance of witnesses and the

30  production of documents, papers, books, records, and other

31  evidence before the office department in any matter pertaining

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 1  to this act. The office department may administer oaths and

 2  affirmations to any person whose testimony is required. If any

 3  person refuses to testify; produce books, records, and

 4  documents; or otherwise refuses to obey a subpoena issued

 5  under this section, the office department may enforce the

 6  subpoena in the same manner as subpoenas issued under the

 7  Administrative Procedure Act are enforced. Witnesses are

 8  entitled to the same fees and mileage as they are entitled to

 9  by law for attending as witnesses in the circuit court, unless

10  such examination or investigation is held at the place of

11  business or residence of the witness.

12         (2)  In addition to any other powers conferred upon the

13  office department to enforce or administer this act, the

14  office department may:

15         (a)  Bring an action in any court of competent

16  jurisdiction to enforce or administer this act, any rule or

17  order adopted under this act, or any written agreement entered

18  into with the office department. In such action, the office

19  department may seek any relief at law or equity, including a

20  temporary or permanent injunction, appointment of a receiver

21  or administrator, or an order of restitution.

22         (b)  Issue and serve upon a person an order requiring

23  such person to cease and desist and take corrective action

24  whenever the office department finds that such person is

25  violating, has violated, or is about to violate any provision

26  of this act, any rule or order adopted under this act, or any

27  written agreement entered into with the office department.

28         (c)  Whenever the office department finds that conduct

29  described in paragraph (b) presents an immediate danger to the

30  public health, safety, or welfare requiring an immediate final

31  order, the office department may issue an emergency cease and

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 1  desist order reciting with particularity the facts underlying

 2  such findings. The emergency cease and desist order is

 3  effective immediately upon service of a copy of the order on

 4  the respondent named in the order and shall remain effective

 5  for 90 days. If the office department begins nonemergency

 6  proceedings under paragraph (b), the emergency cease and

 7  desist order remains effective until the conclusion of the

 8  proceedings under ss. 120.569 and 120.57.

 9         (3)  The commission department may adopt rules to

10  administer this act.

11         Section 647.  Section 537.017, Florida Statutes, is

12  amended to read:

13         537.017  Investigations and complaints.--

14         (1)  The office department may make any investigation

15  and examination of any licensee or other person the office

16  department deems necessary to determine compliance with this

17  act. For such purposes, the office department may examine the

18  books, accounts, records, and other documents or matters of

19  any licensee or other person. The office department may compel

20  the production of all relevant books, records, and other

21  documents and materials relative to an examination or

22  investigation. Examinations shall not be made more often than

23  once during any 12-month period unless the office department

24  has reason to believe the licensee is not complying with the

25  provisions of this act.

26         (2)  The office department shall conduct all

27  examinations at a convenient location in this state unless the

28  office department determines that it is more effective or

29  cost-efficient to perform an examination at the licensee's

30  out-of-state location.  For an examination performed at the

31  licensee's out-of-state location, the licensee shall pay the

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 1  travel expense and per diem subsistence at the rate provided

 2  by law for up to thirty 8-hour days per year for each office

 3  department examiner who participates in such an examination.

 4  However, if the examination involves or reveals possible

 5  fraudulent conduct by the licensee, the licensee shall pay the

 6  travel expenses and per diem subsistence provided by law,

 7  without limitation, for each participating examiner.

 8         (3)  Any person having reason to believe that any

 9  provision of this act has been violated may file with the

10  Department of Financial Services or the office a written

11  complaint setting forth the details of such alleged violation,

12  and the office department may investigate such complaint.

13         Section 648.  Subsection (1) of section 548.066,

14  Florida Statutes, is amended to read:

15         548.066  Ticket refunds.--

16         (1)  Upon the postponement, substitution of either

17  participant, or cancellation of the main event or the entire

18  program of matches, the promoter shall refund the full

19  purchase price of a ticket to each person presenting a ticket

20  for a refund within 30 days after the scheduled date of the

21  event.  Within 10 days after the expiration of the 30-day

22  period, the promoter shall pay all unclaimed ticket receipts

23  to the commission.  The commission shall hold the funds for 1

24  year and make refunds during such time to any person

25  presenting a ticket for a refund. Thereafter, the commission

26  shall pay all remaining moneys from the ticket sale to the

27  Chief Financial Officer State Treasurer for deposit into the

28  General Revenue Fund.

29         Section 649.  Section 548.077, Florida Statutes, is

30  amended to read:

31  

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 1         548.077  Florida State Boxing Commission; collection

 2  and disposition of moneys.--All fees, fines, forfeitures, and

 3  other moneys collected under the provisions of this chapter

 4  shall be paid by the commission to the Chief Financial Officer

 5  State Treasurer who, after the expenses of the commission are

 6  paid, shall deposit them in the Professional Regulation Trust

 7  Fund to be used for the administration and operation of the

 8  commission and to enforce the laws and rules under its

 9  jurisdiction.  In the event the unexpended balance of such

10  moneys collected under the provisions of this chapter exceeds

11  $250,000, any excess of that amount shall be deposited in the

12  General Revenue Fund.

13         Section 650.  Subsection (10) of section 550.0251,

14  Florida Statutes, is amended to read:

15         550.0251  The powers and duties of the Division of

16  Pari-mutuel Wagering of the Department of Business and

17  Professional Regulation.--The division shall administer this

18  chapter and regulate the pari-mutuel industry under this

19  chapter and the rules adopted pursuant thereto, and:

20         (10)  The division may impose an administrative fine

21  for a violation under this chapter of not more than $1,000 for

22  each count or separate offense, except as otherwise provided

23  in this chapter, and may suspend or revoke a permit, a

24  pari-mutuel license, or an occupational license for a

25  violation under this chapter.  All fines imposed and collected

26  under this subsection must be deposited with the Chief

27  Financial Officer Treasurer to the credit of the General

28  Revenue Fund.

29         Section 651.  Paragraph (b) of subsection (9) of

30  section 550.054, Florida Statutes, is amended to read:

31  

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 1         550.054  Application for permit to conduct pari-mutuel

 2  wagering.--

 3         (9)

 4         (b)  The division may revoke or suspend any permit or

 5  license issued under this chapter upon the willful violation

 6  by the permitholder or licensee of any provision of this

 7  chapter or of any rule adopted under this chapter. In lieu of

 8  suspending or revoking a permit or license, the division may

 9  impose a civil penalty against the permitholder or licensee

10  for a violation of this chapter or any rule adopted by the

11  division. The penalty so imposed may not exceed $1,000 for

12  each count or separate offense. All penalties imposed and

13  collected must be deposited with the Chief Financial Officer

14  Treasurer to the credit of the General Revenue Fund.

15         Section 652.  Paragraph (a) of subsection (1) and

16  subsection (5) of section 550.0951, Florida Statutes, are

17  amended to read:

18         550.0951  Payment of daily license fee and taxes.--

19         (1)(a)  DAILY LICENSE FEE.--Each person engaged in the

20  business of conducting race meetings or jai alai games under

21  this chapter, hereinafter referred to as the "permitholder,"

22  "licensee," or "permittee," shall pay to the division, for the

23  use of the division, a daily license fee on each live or

24  simulcast pari-mutuel event of $100 for each horserace and $80

25  for each dograce and $40 for each jai alai game conducted at a

26  racetrack or fronton licensed under this chapter.  In addition

27  to the tax exemption specified in s. 550.09514(1) of $360,000

28  or $500,000 per greyhound permitholder per state fiscal year,

29  each greyhound permitholder shall receive in the current state

30  fiscal year a tax credit equal to the number of live greyhound

31  races conducted in the previous state fiscal year times the

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 1  daily license fee specified for each dograce in this

 2  subsection applicable for the previous state fiscal year.

 3  This tax credit and the exemption in s. 550.09514(1) shall be

 4  applicable to any tax imposed by this chapter or the daily

 5  license fees imposed by this chapter except during any charity

 6  or scholarship performances conducted pursuant to s. 550.0351.

 7  Each permitholder shall pay daily license fees not to exceed

 8  $500 per day on any simulcast races or games on which such

 9  permitholder accepts wagers regardless of the number of

10  out-of-state events taken or the number of out-of-state

11  locations from which such events are taken. This license fee

12  shall be deposited with the Chief Financial Officer Treasurer

13  to the credit of the Pari-mutuel Wagering Trust Fund.

14         (5)  PAYMENT AND DISPOSITION OF FEES AND

15  TAXES.--Payment for the admission tax, tax on handle, and the

16  breaks tax imposed by this section shall be paid to the

17  division. The division shall deposit these sums with the Chief

18  Financial Officer Treasurer, to the credit of the Pari-mutuel

19  Wagering Trust Fund, hereby established. The permitholder

20  shall remit to the division payment for the daily license fee,

21  the admission tax, the tax on handle, and the breaks tax. Such

22  payments shall be remitted by 3 p.m. Wednesday of each week

23  for taxes imposed and collected for the preceding week ending

24  on Sunday. Permitholders shall file a report under oath by the

25  5th day of each calendar month for all taxes remitted during

26  the preceding calendar month.  Such payments shall be

27  accompanied by a report under oath showing the total of all

28  admissions, the pari-mutuel wagering activities for the

29  preceding calendar month, and such other information as may be

30  prescribed by the division.

31  

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 1         Section 653.  Paragraph (a) of subsection (3) of

 2  section 550.125, Florida Statutes, is amended to read:

 3         550.125  Uniform reporting system; bond requirement.--

 4         (3)(a)  Each permitholder to which a license is granted

 5  under this chapter, at its own cost and expense, must, before

 6  the license is delivered, give a bond in the penal sum of

 7  $50,000 payable to the Governor of the state and her or his

 8  successors in office, with a surety or sureties to be approved

 9  by the division and the Chief Financial Officer Treasurer,

10  conditioned to faithfully make the payments to the Chief

11  Financial Officer Treasurer in her or his capacity as

12  treasurer of the division; to keep its books and records and

13  make reports as provided; and to conduct its racing in

14  conformity with this chapter.  When the greatest amount of tax

15  owed during any month in the prior state fiscal year, in which

16  a full schedule of live racing was conducted, is less than

17  $50,000, the division may assess a bond in a sum less than

18  $50,000. The division may review the bond for adequacy and

19  require adjustments each fiscal year.  The division has the

20  authority to adopt rules to implement this paragraph and

21  establish guidelines for such bonds.

22         Section 654.  Section 550.135, Florida Statutes, is

23  amended to read:

24         550.135  Division of moneys derived under this

25  law.--All moneys that are deposited with the Chief Financial

26  Officer Treasurer to the credit of the Pari-mutuel Wagering

27  Trust Fund shall be distributed as follows:

28         (1)  The daily license fee revenues collected pursuant

29  to s. 550.0951(1) shall be used to fund the operating cost of

30  the division and to provide a proportionate share of the

31  operation of the office of the secretary and the Division of

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 1  Administration of the Department of Business and Professional

 2  Regulation; however, other collections in the Pari-mutuel

 3  Wagering Trust Fund may also be used to fund the operation of

 4  the division in accordance with authorized appropriations.

 5         (2)  All unappropriated funds in excess of $3.5 million

 6  in the Pari-mutuel Wagering Trust Fund shall be deposited with

 7  to the Chief Financial Officer Treasurer to the credit of the

 8  General Revenue Fund.

 9         Section 655.  Subsection (3) of section 550.1645,

10  Florida Statutes, is amended to read:

11         550.1645  Escheat to state of abandoned interest in or

12  contribution to pari-mutuel pools.--

13         (3)  All money or other property that has escheated to

14  and become the property of the state as provided herein, and

15  which is held by such licensee authorized to conduct

16  pari-mutuel pools in this state, shall be paid by such

17  licensee to the Chief Financial Officer Treasurer annually

18  within 60 days after the close of the race meeting of the

19  licensee.  Such moneys so paid by the licensee to the Chief

20  Financial Officer Treasurer shall be deposited in the State

21  School Fund to be used for the support and maintenance of

22  public free schools as required by s. 6, Art. IX of the State

23  Constitution.

24         Section 656.  Subsection (14) of section 552.081,

25  Florida Statutes, is amended to read:

26         552.081  Definitions.--As used in this chapter:

27         (14)  "Division" means the Division of State Fire

28  Marshal of the Department of Financial Services Insurance.

29         Section 657.  Subsection (2) of section 552.161,

30  Florida Statutes, is amended to read:

31         552.161  Administrative fines.--

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 1         (2)  All such fines, monetary penalties, and costs

 2  received by the division in connection with this chapter shall

 3  be deposited in the Insurance Commissioner's Regulatory Trust

 4  Fund.

 5         Section 658.  Subsection (3) of section 552.21, Florida

 6  Statutes, is amended to read:

 7         552.21  Confiscation and disposal of explosives.--

 8         (3)  Costs incurred in the confiscation and disposal of

 9  such explosives shall be paid from the Insurance

10  Commissioner's Regulatory Trust Fund.

11         Section 659.  Section 552.26, Florida Statutes, is

12  amended to read:

13         552.26  Administration of chapter; personnel; fees to

14  be deposited in Insurance Commissioner's Regulatory Trust

15  Fund.--

16         (1)  The division is authorized to employ such persons

17  as it may deem qualified and necessary, and incur such other

18  expenses as may be required, in connection with the

19  administration of this chapter.

20         (2)  All fees collected for licenses and permits and

21  competency examination filing fees required by this chapter

22  shall be deposited in the Insurance Commissioner's Regulatory

23  Trust Fund and are hereby appropriated for the use of the

24  division in the administration of this chapter.

25         Section 660.  Subsection (4) of section 553.72, Florida

26  Statutes, is amended to read:

27         553.72  Intent.--

28         (4)  It is the intent of the Legislature that the

29  Florida Fire Prevention Code and the Life Safety Code of this

30  state be adopted, modified, updated, interpreted, and

31  maintained by the Department of Financial Services Insurance

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 1  in accordance with ss. 120.536(1) and 120.54 and included by

 2  reference as sections in the Florida Building Code.

 3         Section 661.  Paragraph (c) of subsection (1) of

 4  section 553.73, Florida Statutes, is amended to read:

 5         553.73  Florida Building Code.--

 6         (1)

 7         (c)  The Florida Fire Prevention Code and the Life

 8  Safety Code shall be referenced in the Florida Building Code,

 9  but shall be adopted, modified, revised, or amended,

10  interpreted, and maintained by the Department of Financial

11  Services Insurance by rule adopted pursuant to ss. 120.536(1)

12  and 120.54. The Florida Building Commission may not adopt a

13  fire prevention or lifesafety code, and nothing in the Florida

14  Building Code shall affect the statutory powers, duties, and

15  responsibilities of any fire official or the Department of

16  Financial Services Insurance.

17         Section 662.  Paragraph (k) of subsection (1) of

18  section 553.74, Florida Statutes, is amended to read:

19         553.74  Florida Building Commission.--

20         (1)  The Florida Building Commission is created and

21  shall be located within the Department of Community Affairs

22  for administrative purposes. Members shall be appointed by the

23  Governor subject to confirmation by the Senate. The commission

24  shall be composed of 23 members, consisting of the following:

25         (k)  One member who represents the Department of

26  Financial Services Insurance.

27         Section 663.  Effective October 1, 2003, paragraph (k)

28  of subsection (1) of section 553.74, Florida Statutes, as

29  amended by chapter 2002-293, Laws of Florida, is amended to

30  read:

31         553.74  Florida Building Commission.--

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 1         (1)  The Florida Building Commission is created and

 2  shall be located within the Department of Community Affairs

 3  for administrative purposes. Members shall be appointed by the

 4  Governor subject to confirmation by the Senate. The commission

 5  shall be composed of 23 members, consisting of the following:

 6         (k)  One member who represents the Department of

 7  Financial Services Insurance.

 8  

 9  Any person serving on the commission under paragraph (c) or

10  paragraph (h) on October 1, 2003, and who has served less than

11  two full terms is eligible for reappointment to the commission

12  regardless of whether he or she meets the new qualification.

13         Section 664.  Subsection (16) of section 553.79,

14  Florida Statutes, is amended to read:

15         553.79  Permits; applications; issuance; inspections.--

16         (16)  Notwithstanding any other provision of law, state

17  agencies responsible for the construction, erection,

18  alteration, modification, repair, or demolition of public

19  buildings, or the regulation of public and private buildings,

20  structures, and facilities, shall be subject to enforcement of

21  the Florida Building Code by local jurisdictions. This

22  subsection applies in addition to the jurisdiction and

23  authority of the Department of Financial Services Insurance to

24  inspect state-owned buildings. This subsection does not apply

25  to the jurisdiction and authority of the Department of

26  Agriculture and Consumer Services to inspect amusement rides

27  or the Department of Financial Services Insurance to inspect

28  state-owned buildings and boilers.

29         Section 665.  Subsection (6) of section 553.88, Florida

30  Statutes, is amended to read:

31  

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 1         553.88  Adoption of electrical and alarm

 2  standards.--For the purpose of establishing minimum electrical

 3  and alarm standards in this state, the current edition of the

 4  following standards are adopted:

 5         (6)  The minimum standards for grounding of portable

 6  electric equipment, chapter 8C-27 as recommended by the

 7  Industrial Standards Section, Division of Workers'

 8  Compensation, Department of Financial Services Labor and

 9  Employment Security.

10  

11  The Florida Building Commission shall update and maintain such

12  electrical standards consistent with the procedures

13  established in s. 553.73 and may recommend the National

14  Electrical Installation Standards.

15         Section 666.  Subsection (6) of section 554.1021,

16  Florida Statutes, is amended to read:

17         554.1021  Definitions.--As used in ss.

18  554.1011-554.115:

19         (6)  "Department" means the Department of Financial

20  Services Insurance.

21         Section 667.  Subsection (1) of section 554.105,

22  Florida Statutes, is amended to read:

23         554.105  Chief inspector.--

24         (1)  The Chief Financial Officer Insurance Commissioner

25  and Treasurer shall appoint a chief inspector, who shall have

26  not less than 5 years' experience in the construction,

27  installation, inspection, operation, maintenance, or repair of

28  high pressure, high temperature water boilers and who shall

29  hold a commission from the National Board of Boiler and

30  Pressure Vessel Inspectors or a certificate of competency from

31  the department.

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 1         Section 668.  Subsection (3) of section 554.111,

 2  Florida Statutes, is amended to read:

 3         554.111  Fees.--

 4         (3)  The chief inspector shall deposit all fees

 5  received pursuant to ss. 554.1011-554.115 into the Insurance

 6  Commissioner's Regulatory Trust Fund.

 7         Section 669.  Paragraph (b) of subsection (2) and

 8  subsection (3) of section 559.10, Florida Statutes, are

 9  amended to read:

10         559.10  Definition; "budget planning".--

11         (2)  The term "budget planning" does not include the

12  following:

13         (b)  Other activities defined by rule of the Financial

14  Services Commission Department of Banking and Finance as not

15  within the prohibition of this part, provided such rule is

16  adopted after a finding that consumers are adequately

17  protected in the activity and that its prohibition is not

18  required in the public interest.

19         (3)  The Financial Services Commission Department of

20  Banking and Finance may adopt rules as necessary to implement

21  and enforce this part.

22         Section 670.  Subsection (5) of section 559.543,

23  Florida Statutes, is amended, and subsection (6) is added to

24  that section, to read:

25         559.543  Definitions.--As used in this part:

26         (5)  "Commission" means the Financial Services

27  Commission "Department" means the Department of Banking and

28  Finance.

29         (6)  "Office" means the Office of Financial

30  Institutions and Securities Regulation of the commission.

31  

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 1         Section 671.  Subsections (2), (3), and (4) of section

 2  559.544, Florida Statutes, are amended to read:

 3         559.544  Registration required; exemptions.--

 4         (2)  Each commercial collection agency doing business

 5  in this state shall register with the office department and

 6  annually renew such registration, providing the registration

 7  fee, information, and surety bond required by this part.

 8         (3)  No registration shall be valid for any commercial

 9  collection agency transacting business at any place other than

10  that designated in the registration unless the office

11  department is first notified in advance of any change of

12  location.  A registration under this part is not transferable

13  or assignable.  Any commercial collection agency desiring to

14  change its registered name, location, or agent for service of

15  process at any time other than renewal of registration shall

16  notify the office department of such change prior to the

17  change.

18         (4)  The office department shall not accept any

19  registration for any commercial collection agency as validly

20  made and filed with the office department under this section

21  unless the registration information furnished to the office

22  department by the registrant is complete pursuant to s.

23  559.545 and facially demonstrates that such registrant is

24  qualified to engage in business as a commercial collection

25  agency, including specifically that neither the registrant nor

26  any principal of the registrant has engaged in any unlawful

27  collection practices, dishonest dealings, acts of moral

28  turpitude, or other criminal acts that reflect an inability to

29  engage in the commercial collection agency business.  The

30  office department shall inform any person whose registration

31  is rejected by the office department of the fact of and basis

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 1  for such rejection.  A prospective registrant shall be

 2  entitled to be registered when her or his or its registration

 3  information is complete on its face, the applicable

 4  registration fee has been paid, and the required evidence of

 5  current bond is furnished to the office department.

 6         Section 672.  Section 559.545, Florida Statutes, is

 7  amended to read:

 8         559.545  Registration of commercial collection

 9  agencies; procedure.--Any person who wishes to register as a

10  commercial collection agency in compliance with this part

11  shall do so on forms adopted by the commission and furnished

12  by the office department.  Any renewal of registration shall

13  be made between October 1 and December 31 of each year.  In

14  registering or renewing a registration as required by this

15  part, each commercial collection agency shall furnish to the

16  office department a registration fee, information, and surety

17  bond, as follows:

18         (1)  The registrant shall pay to the office department

19  a registration fee of $500.  All amounts collected shall be

20  deposited to the credit of the Regulatory Trust Fund of the

21  office department.

22         (2)  The registrant shall provide the following

23  information:

24         (a)  The business name or trade name of the commercial

25  collection agency, the current mailing address of the agency,

26  and the current business location of each place from which the

27  agency operates either a main or branch office, with a

28  designation of which location constitutes its principal place

29  of business.

30         (b)  The full names, current addresses, current

31  telephone numbers, and social security numbers, or federal

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 1  identification numbers of any corporate owner, of the

 2  registrant's owners or corporate officers and directors, and

 3  of the Florida resident agent of the registering agency.

 4         (c)  A statement as to whether the registrant is a

 5  domestic or foreign corporation, together with the state and

 6  date of incorporation, charter number of the corporation, and,

 7  if a foreign corporation, the date the corporation first

 8  registered to do business in this state.

 9         (d)  A statement listing each county in this state in

10  which the registrant is currently doing business or plans to

11  do business within the next calendar year, indicating each

12  county in which the registrant holds an occupational license.

13         (e)  A statement listing each county in this state in

14  which the registrant is operating under a fictitious name or

15  trade name other than that of the registrant, indicating the

16  date and place of registration of any such fictitious name or

17  trade name.

18         (f)  A statement listing the names of any other

19  corporations, entities, or trade names through which any owner

20  or director of the registrant was known or did business as a

21  commercial or consumer collection agency within the 5 calendar

22  years immediately preceding the year in which the agency is

23  registering.

24         (g)  A statement clearly identifying and explaining any

25  occasion on which any professional license or occupational

26  license held by the registrant, any principal of the

27  registrant, or any business entity in which any principal of

28  the registrant was the owner of 10 percent or more of such

29  business was the subject of any suspension, revocation, or

30  other disciplinary action.

31  

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 1         (h)  A statement clearly identifying and explaining any

 2  occasion of a finding of guilt of any crime involving moral

 3  turpitude or dishonest conduct on the part of any principal of

 4  the registrant.

 5         (3)  The registrant shall furnish to the office

 6  department evidence, as provided in s. 559.546, of the

 7  registrant having a current surety bond in the amount of

 8  $50,000, valid for the year of registration, paid for and

 9  issued for the use and benefit of any credit grantor who

10  suffers or sustains any loss or damage by reason of any

11  violation of the provisions of this part by the registrant, or

12  by any agent or employee of the registrant acting within the

13  scope of her or his employment, and issued to ensure

14  conformance with the provisions of this part.

15         Section 673.  Section 559.546, Florida Statutes, is

16  amended to read:

17         559.546  Bond; evidence of current and valid

18  bond.--Pursuant to s. 559.545, the registrant shall provide to

19  the office department evidence that the registrant has been

20  issued a current and valid surety bond as required by this

21  part.

22         (1)  In addition to each registration filed pursuant to

23  s. 559.545 and any renewal of such registration, each

24  registrant shall furnish to the office department the

25  following:

26         (a)  A copy of the surety bond, which bond shall be one

27  issued by a surety known by the registrant to be acceptable to

28  the office department.

29         (b)  A statement from the surety that the annual

30  premium for the bond has been paid in full by the registrant.

31  

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 1         (c)  A statement from the surety that the bond issued

 2  by the surety meets the requirements of this part.

 3         (2)  The liability of the surety under any bond issued

 4  pursuant to the requirements of this part shall not exceed in

 5  the aggregate the amount of the bond, regardless of the number

 6  or amount of any claims filed or which might be asserted

 7  against the surety on such bond.  If multiple claims are filed

 8  against the surety on any such bond in excess of the amount of

 9  the bond, the surety may pay the full amount of the bond to

10  the office department and shall not be further liable under

11  the bond.  The office department shall hold such funds for

12  distribution to claimants and administratively determine and

13  pay to each claimant the pro rata share of each valid claim

14  made against the funds within 6 months after the date of the

15  filing of the first claim against the surety.

16         Section 674.  Paragraph (a) of subsection (1) and

17  paragraph (a) of subsection (2) of section 559.548, Florida

18  Statutes, are amended to read:

19         559.548  Penalties.--

20         (1)  Each of the following acts constitutes a felony of

21  the third degree, punishable as provided in s. 775.082, s.

22  775.083, or s. 775.084:

23         (a)  Operating or soliciting business as a commercial

24  collection agency in this state without first registering with

25  the office department, unless specifically exempted by this

26  part.

27         (2)  Each of the following acts constitutes a

28  misdemeanor of the second degree, punishable as provided in s.

29  775.082 or s. 775.083:

30         (a)  Relocating a business as a commercial collection

31  agency, or operating under any name other than that designated

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 1  in the registration, unless written notification is given to

 2  the office department and to the surety or sureties on the

 3  original bond.

 4         Section 675.  Subsection (4) of section 559.55, Florida

 5  Statutes, is amended to read:

 6         559.55  Definitions.--The following terms shall, unless

 7  the context otherwise indicates, have the following meanings

 8  for the purpose of this part:

 9         (4)  "Office" means the Office of Financial

10  Institutions and Securities Regulation of the Financial

11  Services Commission "Department" means the Department of

12  Banking and Finance.

13         Section 676.  Subsections (2) and (3) of section

14  559.553, Florida Statutes, are amended to read:

15         559.553  Registration of consumer collection agencies

16  required; exemptions.--

17         (2)  Each consumer collection agency doing business in

18  this state shall register with the office department and renew

19  such registration annually as set forth in s. 559.555.

20         (3)  A prospective registrant shall be entitled to be

21  registered when registration information is complete on its

22  face and the applicable registration fee has been paid;

23  however, the office department may reject a registration

24  submitted by a prospective registrant if the registrant or any

25  principal of the registrant previously has held any

26  professional license or state registration which was the

27  subject of any suspension or revocation which has not been

28  explained by the prospective registrant to the satisfaction of

29  the office department either in the registration information

30  submitted initially or upon the subsequent written request of

31  the office department. In the event that an attempted

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 1  registration is rejected by the office department the

 2  prospective registrant shall be informed of the basis for

 3  rejection.

 4         Section 677.  Section 559.555, Florida Statutes, is

 5  amended to read:

 6         559.555  Registration of consumer collection agencies;

 7  procedure.--Any person required to register as a consumer

 8  collection agency shall furnish to the office department the

 9  registration fee and information as follows:

10         (1)  The registrant shall pay to the office department

11  a registration fee in the amount of $200.  All amounts

12  collected shall be deposited by the office department to the

13  credit of the Regulatory Trust Fund of the office department.

14         (2)  Each registrant shall provide to the office

15  department the business name or trade name, the current

16  mailing address, the current business location which

17  constitutes its principal place of business, and the full name

18  of each individual who is a principal of the registrant.

19  "Principal of a registrant" means the registrant's owners if a

20  partnership or sole proprietorship, corporate officers,

21  corporate directors other than directors of a not-for-profit

22  corporation organized pursuant to chapter 617 and Florida

23  resident agent if a corporate registrant.  The registration

24  information shall include a statement clearly identifying and

25  explaining any occasion on which any professional license or

26  state registration held by the registrant, by any principal of

27  the registrant, or by any business entity in which any

28  principal of the registrant was the owner of 10 percent or

29  more of such business, was the subject of any suspension or

30  revocation.

31  

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 1         (3)  Renewal of registration shall be made between

 2  October 1 and December 31 of each year.  There shall be no

 3  proration of the fee for any registration.

 4         Section 678.  Section 559.563, Florida Statutes, is

 5  amended to read:

 6         559.563  Void registration.--Any registration made

 7  under this part based upon false identification or false

 8  information, or identification not current with respect to

 9  name, address, and business location, or other fact which is

10  material to such registration, shall be void.  Any

11  registration made and subsequently void under this section

12  shall not be construed as creating any defense in any action

13  by the office department to impose any sanction for any

14  violation of this part.

15         Section 679.  Section 559.725, Florida Statutes, is

16  amended to read:

17         559.725  Consumer complaints; administrative duties.--

18         (1)  The Division of Consumer Services of the

19  Department of Agriculture and Consumer Services shall serve as

20  the registry for receiving and maintaining records of

21  inquiries, correspondence, and complaints from consumers

22  concerning any and all persons who collect debts, including

23  consumer collection agencies.

24         (2)  The division shall classify complaints by type and

25  identify the number of written complaints against persons

26  collecting or attempting to collect debts in this state,

27  including credit grantors collecting their own debts, debt

28  collectors generally, and, specifically, consumer collection

29  agencies as distinguished from other persons who collect debts

30  such as commercial debt collection agencies regulated under

31  part V of this chapter.  The division shall identify the

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 1  nature and number of various kinds of written complaints,

 2  including specifically those alleging violations of s. 559.72.

 3         (3)  The division shall inform and furnish relevant

 4  information to the appropriate regulatory body of the state,

 5  or The Florida Bar in the case of attorneys, when any consumer

 6  debt collector exempt from registration under this part has

 7  been named in five or more written consumer complaints

 8  alleging violations of s. 559.72 within a 12-month period.

 9         (4)  The division shall furnish a form to each

10  complainant whose complaint concerns an alleged violation of

11  s. 559.72 by a consumer collection agency.  Such form may be

12  filed with the office Department of Banking and Finance.  The

13  form shall identify the accused consumer collection agency and

14  provide for the complainant's summary of the nature of the

15  alleged violation and facts which allegedly support the

16  complaint.  The form shall include a provision for the

17  complainant to state under oath before a notary public that

18  the allegations therein made are true.

19         (5)  Upon receipt of such sworn complaint, the office

20  department shall promptly furnish a copy of the sworn

21  complaint to the accused consumer collection agency.

22         (6)  The office department shall investigate sworn

23  complaints by direct written communication with the

24  complainant and the affected consumer collection agency. In

25  addition, the office department shall attempt to resolve each

26  sworn complaint and shall record the resolution of such

27  complaints.

28         (7)  Periodically, the office department shall identify

29  consumer collection agencies that have unresolved sworn

30  consumer complaints from five or more different consumers

31  within a 12-month period under the provisions of this part.

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 1         (8)  The office department shall issue a written

 2  warning notice to the accused consumer collection agency if

 3  the office department is unable to resolve all such sworn

 4  complaints and fewer than five unresolved complaints remain.

 5  Such notice shall include a statement that the warning may

 6  constitute evidence in any future investigation of similar

 7  complaints against that agency and in any future

 8  administrative determination of the imposition of other

 9  administrative remedies available to the office department

10  under this part.

11         (9)  The office department may issue a written

12  reprimand when five or more such unresolved sworn complaints

13  against a consumer collection agency collectively fall short

14  of constituting apparent repeated violations that warrant more

15  serious administrative sanctions. Such reprimand shall include

16  a statement that the reprimand may constitute evidence in any

17  future investigation of similar complaints against that agency

18  and in any future administrative determination of the

19  imposition of other administrative remedies available to the

20  office department.

21         (10)  The office department shall issue a notice of

22  intent either to revoke or suspend the registration or to

23  impose an administrative fine when the office department

24  preliminarily determines that repeated violations of s. 559.72

25  by an accused registrant have occurred which would warrant

26  more serious administrative sanctions being imposed under this

27  part.  The office department shall advise each registrant of

28  the right to require an administrative hearing under chapter

29  120, prior to the agency's final action on the matter as

30  authorized by s. 559.730.

31  

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 1         (11)  The office department shall advise the

 2  appropriate state attorney, or the Attorney General in the

 3  case of an out-of-state consumer debt collector, of any

 4  determination by the office department of a violation of the

 5  requirements of this part by any consumer collection agency

 6  which is not registered as required by this part. The office

 7  department shall furnish the state attorney or Attorney

 8  General with the office's department's information concerning

 9  the alleged violations of such requirements.

10         Section 680.  Section 559.730, Florida Statutes, is

11  amended to read:

12         559.730  Administrative remedies.--

13         (1)  The office department may revoke or suspend the

14  registration of any registrant under this part who has engaged

15  in repeated violations which establish a clear pattern of

16  abuse of prohibited collection practices under s. 559.72.

17  Final office department action to revoke or suspend the

18  registration of any registrant shall be subject to review in

19  accordance with chapter 120 in the same manner as revocation

20  of a license.  The repeated violations of the law by one

21  employee shall not be grounds for revocation or suspension of

22  the registration of the employing consumer collection agency,

23  unless the employee is also the owner of a majority interest

24  in the collection agency.

25         (2)  The registration of a registrant shall not be

26  revoked or suspended if the registrant shows by a

27  preponderance of the evidence that the violations were not

28  intentional and resulted from bona fide error notwithstanding

29  the maintenance of procedures reasonably adapted to avoid any

30  such error.

31  

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 1         (3)  The office department shall consider the number of

 2  complaints against the registrant in relation to the accused

 3  registrant's volume of business when determining whether

 4  suspension or revocation is the more appropriate sanction when

 5  circumstances warrant that one or the other should be imposed

 6  upon a registrant.

 7         (4)  The office department shall impose suspension

 8  rather than revocation when circumstances warrant that one or

 9  the other should be imposed upon a registrant and the accused

10  registrant demonstrates that the registrant has taken

11  affirmative steps which can be expected to effectively

12  eliminate the repeated violations and that the registrant's

13  registration has never previously been suspended.

14         (5)  The office department may impose an administrative

15  fine up to $1,000 against the offending registrant as a

16  sanction for repeated violations of the provisions of s.

17  559.72 when violations do not rise to the level of misconduct

18  governed by subsection (1). Final office department action to

19  impose an administrative fine shall be subject to review in

20  accordance with ss. 120.569 and 120.57.

21         (6)  Any administrative fine imposed under this part

22  shall be payable to the office department.  The office

23  department shall maintain an appropriate record and shall

24  deposit such fine into the Regulatory Trust Fund of the office

25  department.

26         (7)  An administrative action by the office department

27  to impose revocation, suspension, or fine shall be brought

28  within 2 years after the date of the last violation upon which

29  the action is founded.

30         (8)  Nothing in this part shall be construed to

31  preclude any person from pursuing remedies available under the

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 1  Federal Fair Debt Collection Practices Act for any violation

 2  of such act, including specifically against any person who is

 3  exempt from the registration provisions of this part.

 4         Section 681.  Section 559.785, Florida Statutes, is

 5  amended to read:

 6         559.785  Criminal penalty.--It shall be a misdemeanor

 7  of the first degree, punishable as provided in s. 775.082 or

 8  s. 775.083, for any person not exempt from registering as

 9  provided in this part to engage in collecting consumer debts

10  in this state without first registering with the office

11  department, or to register or attempt to register by means of

12  fraud, misrepresentation, or concealment.

13         Section 682.  Subsection (2) of section 559.928,

14  Florida Statutes, is amended to read:

15         559.928  Registration.--

16         (2)  Registration fees shall be $300 per year per

17  registrant.  All amounts collected shall be deposited by the

18  Chief Financial Officer Treasurer to the credit of the General

19  Inspection Trust Fund of the Department of Agriculture and

20  Consumer Services pursuant to s. 570.20, for the sole purpose

21  of administration of this part.

22         Section 683.  Subsection (2) of section 559.9232,

23  Florida Statutes, is amended to read:

24         559.9232  Definitions; exclusion of rental-purchase

25  agreements from certain regulations.--

26         (2)  A rental-purchase agreement that complies with

27  this act shall not be construed to be, nor be governed by, any

28  of the following:

29         (a)  A lease or agreement which constitutes a credit

30  sale as defined in 12 C.F.R. s. 226.2(a)(16) and s. 1602(g) of

31  the federal Truth in Lending Act, 15 U.S.C. ss. 1601 et seq.;

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 1         (b)  A lease which constitutes a "consumer lease" as

 2  defined in 12 C.F.R. s. 213.2(a)(6);

 3         (c)  Any lease for agricultural, business, or

 4  commercial purposes;

 5         (d)  Any lease made to an organization;

 6         (e)  A lease or agreement which constitutes a "retail

 7  installment contract" or "retail installment transaction" as

 8  those terms are defined in s. 520.31(13) and (14) s.

 9  520.31(12) and (13); or

10         (f)  A security interest as defined in s. 671.201(37).

11         Section 684.  Subsection (1) and paragraph (h) of

12  subsection (2) of section 560.102, Florida Statutes, are

13  amended to read:

14         560.102  Purpose; application.--The purposes of the

15  code are to:

16         (1)  Provide general regulatory powers to be exercised

17  by the Financial Services Commission and the Office of

18  Financial Institutions and Securities Regulation Department of

19  Banking and Finance in relation to the regulation of the money

20  transmitter industry. The code applies to all money

21  transmitters transacting business in this state and to the

22  enforcement of all laws relating to the money transmitter

23  industry.

24         (2)  Provide for and promote, subject to the provisions

25  of the code:

26         (h)  Only such rulemaking power to the commission and

27  administrative discretion to the office department as is

28  necessary, in order that the supervision and regulation of

29  money transmitters may be flexible and readily responsive to

30  changes in economic conditions, in technology, and in money

31  transmitter practices.

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 1         Section 685.  Subsections (1), (7), (17), and (20) of

 2  section 560.103, Florida Statutes, are amended, present

 3  subsections (8) through (20) of that section are renumbered as

 4  (9) through (21), respectively, and a new subsection (8) is

 5  added to that section to read:

 6         560.103  Definitions.--As used in the code, unless the

 7  context otherwise requires:

 8         (1)  "Appropriate regulator" means any state or federal

 9  agency, including the commission or office department, which

10  has been granted state or federal statutory authority with

11  regard to the money transmission function.

12         (7)  "Commission" means the Financial Services

13  Commission "Department" means the Florida Department of

14  Banking and Finance.

15         (8)  "Office" means the Office of Financial

16  Institutions and Securities Regulation of the commission.

17         (18)(17)  "Registrant" means a person registered by the

18  office department pursuant to the code.

19         (21)(20)  "Unsafe or unsound practice" means any

20  practice or conduct found by the office department to be

21  contrary to generally accepted standards applicable to the

22  specific money transmitter, or a violation of any prior order

23  of an appropriate regulatory agency, which practice, conduct,

24  or violation creates the likelihood of material loss,

25  insolvency, or dissipation of assets of the money transmitter

26  or otherwise materially prejudices the interests of its

27  customers. In making this determination, the office department

28  must consider the size and condition of the money transmitter,

29  the magnitude of the loss, the gravity of the violation, and

30  the prior conduct of the person or business involved.

31  

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 1         Section 686.  Section 560.105, Florida Statutes, is

 2  amended to read:

 3         560.105  Supervisory powers of the department;

 4  rulemaking.--

 5         (1)  Consistent with the purposes of the code, the

 6  office department shall have:

 7         (a)(1)  Supervision over all money transmitters and

 8  their authorized vendors.

 9         (b)(2)  Access to books and records of persons over

10  whom the office department exercises supervision as is

11  necessary for the performance of the duties and functions of

12  the office department prescribed by the code.

13         (c)(3)  Power to issue orders and declaratory

14  statements, disseminate information, and otherwise exercise

15  its discretion to effectuate the purposes, policies, and

16  provisions of the code.

17         (2)  Consistent with the purposes of the code, the

18  commission may and to adopt rules pursuant to ss. 120.536(1)

19  and 120.54 to implement the provisions of the code.

20         Section 687.  Subsection (2) of section 560.106,

21  Florida Statutes, is amended to read:

22         560.106  Construction; standards.--

23         (2)  The purposes and policies stated in s. 560.102

24  constitute the standards to be observed by both the commission

25  and the office department in the exercise of their its

26  discretionary powers under the code, in the adoption of rules,

27  in the issuance of orders and declaratory statements, in the

28  examination and supervision of money transmitters and their

29  authorized vendors, and in all matters of construction and

30  application of the code required for any determination or

31  action by the commission or the office department.

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 1         Section 688.  Section 560.107, Florida Statutes, is

 2  amended to read:

 3         560.107  Liability.--No person acting, or who has

 4  acted, in good faith reliance upon a rule, order, or

 5  declaratory statement issued by the commission or the office

 6  department shall be subject to any criminal, civil, or

 7  administrative liability for such action, notwithstanding a

 8  subsequent decision by a court of competent jurisdiction

 9  invalidating the rule, order, or declaratory statement. In the

10  case of an order or a declaratory statement that is not of

11  general application, no person other than the person to whom

12  the order or declaratory statement was issued is entitled to

13  rely upon it, except upon material facts or circumstances that

14  are substantially the same as those upon which the order or

15  declaratory statement was based.

16         Section 689.  Section 560.1073, Florida Statutes, is

17  amended to read:

18         560.1073  False or misleading statements or supporting

19  documents; penalty.--Any person who, personally or otherwise,

20  files with the office department, or signs as the duly

21  authorized representative for filing with the office

22  department, any financial statement or any document in support

23  thereof which is required by law or rule with intent to

24  deceive and with knowledge that the statement or document is

25  materially false or materially misleading commits a felony of

26  the third degree, punishable as provided in s. 775.082, s.

27  775.083, or s. 775.084.

28         Section 690.  Section 560.108, Florida Statutes, is

29  amended to read:

30         560.108  Administrative enforcement guidelines.--

31  

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 1         (1)  In imposing any administrative remedy or penalty

 2  provided for in the code, the office department shall take

 3  into account the appropriateness of the penalty with respect

 4  to the size of the financial resources and good faith of the

 5  person charged, the gravity of the violation, the history of

 6  previous violations, and such other matters as justice may

 7  require.

 8         (2)  All administrative proceedings pursuant to the

 9  code shall be conducted in accordance with chapter 120. Any

10  service required or authorized to be made by the office

11  department under the code must be made by certified mail,

12  return receipt requested, delivered to the addressee only by

13  personal delivery or in accordance with chapter 48. The

14  service provided for in this subsection is effective on the

15  date of delivery.

16         Section 691.  Section 560.109, Florida Statutes, is

17  amended to read:

18         560.109  Investigations, subpoenas, hearings, and

19  witnesses.--

20         (1)  The office department may make investigations,

21  within or outside this state, which it deems necessary in

22  order to determine whether a person has violated any provision

23  of the code or the rules adopted by the commission department

24  pursuant to the code.

25         (2)(a)  In the course of or in connection with an

26  investigation by the office department pursuant to the

27  provisions of subsection (1) or an investigation or

28  examination in connection with any application to the office

29  department for the organization or establishment of a money

30  transmitter business, or in connection with an examination or

31  investigation of a money transmitter or its authorized vendor,

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 1  the office department, or any of its officers holding no

 2  lesser title and position than financial examiner or analyst,

 3  financial investigator, or attorney at law, may:

 4         1.  Administer oaths and affirmations.

 5         2.  Take or cause to be taken testimony and

 6  depositions.

 7         (b)  The office department, or any of its officers

 8  holding no lesser title than attorney or area financial

 9  manager, may issue, revoke, quash, or modify subpoenas and

10  subpoenas duces tecum under the seal of the office department

11  or cause any such subpoena or subpoena duces tecum to be

12  issued by any county court judge or clerk of the circuit court

13  or county court to require persons to appear before the office

14  department at a reasonable time and place to be therein named

15  and to bring such books, records, and documents for inspection

16  as may be therein designated. Such subpoenas may be served by

17  a representative of the office department or may be served as

18  otherwise provided for by law for the service of subpoenas.

19         (c)  In connection with any such investigation or

20  examination, the office department may permit a person to file

21  a statement in writing, under oath or otherwise as the office

22  department determines, as to facts and circumstances specified

23  by the office department.

24         (3)(a)  In the event of noncompliance with a subpoena

25  issued or caused to be issued by the office department

26  pursuant to this section, the office department may petition

27  the circuit court of the county in which the person subpoenaed

28  resides or has its principal place of business for an order

29  requiring the subpoenaed person to appear and testify and to

30  produce such books, records, and documents as are specified in

31  such subpoena duces tecum. The office department is entitled

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 1  to the summary procedure provided in s. 51.011, and the court

 2  shall advance the cause on its calendar.

 3         (b)  A copy of the petition shall be served upon the

 4  person subpoenaed by any person authorized by this section to

 5  serve subpoenas, who shall make and file with the court an

 6  affidavit showing the time, place, and date of service.

 7         (c)  At any hearing on any such petition, the person

 8  subpoenaed, or any person whose interests will be

 9  substantially affected by the investigation, examination, or

10  subpoena, may appear and object to the subpoena and to the

11  granting of the petition. The court may make any order that

12  justice requires in order to protect a party or other person

13  and her or his personal and property rights, including, but

14  not limited to, protection from annoyance, embarrassment,

15  oppression, or undue burden or expense.

16         (d)  Failure to comply with an order granting, in whole

17  or in part, a petition for enforcement of a subpoena is a

18  contempt of the court.

19         (4)  Witnesses are entitled to the same fees and

20  mileage to which they would be entitled by law for attending

21  as witnesses in the circuit court, except that no fees or

22  mileage is allowed for testimony of a person taken at the

23  person's principal office or residence.

24         (5)  Reasonable and necessary costs incurred by the

25  office department and payable to persons involved with

26  investigations may be assessed against any person on the basis

27  of actual costs incurred. Assessable expenses include, but are

28  not limited to: expenses for interpreters; expenses for

29  communications; expenses for legal representation; expenses

30  for economic, legal, or other research, analyses, and

31  testimony; and fees and expenses for witnesses. The failure to

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 1  reimburse the office department is a ground for denial of the

 2  registration application or for revocation of any approval

 3  thereof. No such costs shall be assessed against a person

 4  unless the office department has determined that the person

 5  has operated or is operating in violation of the code.

 6         Section 692.  Subsection (1) of section 560.111,

 7  Florida Statutes, is amended to read:

 8         560.111  Prohibited acts and practices.--

 9         (1)  It is unlawful for any money transmitter or money

10  transmitter-affiliated party to:

11         (a)  Receive or possess itself of any property

12  otherwise than in payment of a just demand, and, with intent

13  to deceive or defraud, to omit to make or cause to be made a

14  full and true entry thereof in its books and accounts, or to

15  concur in omitting to make any material entry thereof;

16         (b)  Embezzle, abstract, or misapply any money,

17  property, or thing of value of the money transmitter or

18  authorized vendor with intent to deceive or defraud such money

19  transmitter or authorized vendor;

20         (c)  Make any false entry in any book, report, or

21  statement of such money transmitter or authorized vendor with

22  intent to deceive or defraud such money transmitter,

23  authorized vendor, or another person, or with intent to

24  deceive the office department, any other state or federal

25  regulatory agency, or any authorized representative appointed

26  to examine or investigate the affairs of such money

27  transmitter or authorized vendor;

28         (d)  Engage in an act that violates 18 U.S.C. s. 1956,

29  31 U.S.C. s. 5324, or any other law, rule, or regulation of

30  another state or of the United States relating to the business

31  of money transmission or usury which may cause the denial or

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 1  revocation of a money transmitter license or registration in

 2  such jurisdiction;

 3         (e)  Deliver or disclose to the office department or

 4  any of its employees any examination report, report of

 5  condition, report of income and dividends, audit, account,

 6  statement, or document known by it to be fraudulent or false

 7  as to any material matter; or

 8         (f)  Place among the assets of such money transmitter

 9  or authorized vendor any note, obligation, or security that

10  the money transmitter or authorized vendor does not own or

11  that to the person's knowledge is fraudulent or otherwise

12  worthless, or for any such person to represent to the office

13  department that any note, obligation, or security carried as

14  an asset of such money transmitter or authorized vendor is the

15  property of the money transmitter or authorized vendor and is

16  genuine if it is known to such person that such representation

17  is false or that such note, obligation, or security is

18  fraudulent or otherwise worthless.

19         Section 693.  Subsections (1), (3), and (6) of section

20  560.112, Florida Statutes, are amended to read:

21         560.112  Procedures for disciplinary actions.--

22         (1)  The office department may issue and serve upon any

23  person a complaint stating charges whenever the office

24  department has reason to believe that such person has engaged

25  in or is engaging in conduct described in s. 560.114.

26         (3)  If no hearing is requested within the time allowed

27  by ss. 120.569 and 120.57, or if a hearing is held and the

28  office department finds that any of the charges are true, the

29  office department may enter an order directing the money

30  transmitter, the money transmitter-affiliated party, or the

31  person named therein to cease and desist from engaging in the

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 1  conduct complained of and to take reasonable corrective

 2  action. The office department may also issue an order

 3  suspending or barring any money transmitter-affiliated party

 4  from continuing to be employed by or associated with any money

 5  transmitter or authorized vendor during the period such order

 6  is in effect.

 7         (6)  Whenever the office department finds that conduct

 8  described in s. 560.114 is likely to cause substantial

 9  dissipation of assets or earnings of the money transmitter or,

10  insolvency or substantial prejudice to the customers of the

11  money transmitter or authorized vendor, it may issue an

12  emergency removal order or an emergency cease and desist order

13  requiring any person to disassociate itself from participating

14  in the affairs of the money transmitter or authorized vendor

15  or to immediately cease and desist from engaging in the

16  conduct complained of and to take corrective action. The

17  emergency order is effective immediately upon service of the

18  order upon the person and remains effective for 90 days. Such

19  person may object to the issuance of the emergency order

20  pursuant to the provisions of chapter 120. Such objection must

21  be in writing and must include a request for a formal hearing,

22  which is to be promptly instituted and acted upon. If the

23  office department begins nonemergency proceedings under

24  subsection (1), the emergency order remains effective until

25  the conclusion of the proceedings under ss. 120.569 and

26  120.57.

27         Section 694.  Section 560.113, Florida Statutes, is

28  amended to read:

29         560.113  Injunctions.--Whenever a violation of the code

30  is threatened or impending and such violation will cause

31  substantial injury to any person, the circuit court has

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 1  jurisdiction to hear any complaint filed by the office

 2  department and, upon proper showing, to issue an injunction

 3  restraining such violation or granting other such appropriate

 4  relief.

 5         Section 695.  Subsections (1) and (2) of section

 6  560.114, Florida Statutes, are amended to read:

 7         560.114  Disciplinary actions.--

 8         (1)  The following actions by a money transmitter or

 9  money transmitter-affiliated party are violations of the code

10  and constitute grounds for the issuance of a cease and desist

11  order, the issuance of a removal order, the denial of a

12  registration application or the suspension or revocation of

13  any registration previously issued pursuant to the code, or

14  the taking of any other action within the authority of the

15  office department pursuant to the code:

16         (a)  Failure to comply with any provision of the code,

17  any rule or order adopted pursuant thereto, or any written

18  agreement entered into with the office department.

19         (b)  Fraud, misrepresentation, deceit, or gross

20  negligence in any transaction involving money transmission,

21  regardless of reliance thereon by, or damage to, a money

22  transmitter customer.

23         (c)  Fraudulent misrepresentation, circumvention, or

24  concealment of any matter required to be stated or furnished

25  to a money transmitter customer pursuant to the code,

26  regardless of reliance thereon by, or damage to, such

27  customer.

28         (d)  False, deceptive, or misleading advertising.

29         (e)  Failure to maintain, preserve, and keep available

30  for examination all books, accounts, or other documents

31  required by the code, by any rule or order adopted pursuant to

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 1  the code, or by any agreement entered into with the office

 2  department.

 3         (f)  Refusal to permit the examination or inspection of

 4  books and records in an investigation or examination by the

 5  office department, pursuant to the provisions of the code, or

 6  to comply with a subpoena issued by the office department.

 7         (g)  Failure to pay a judgment recovered in any court

 8  in this state by a claimant in an action arising out of a

 9  money transmission transaction within 30 days after the

10  judgment becomes final.

11         (h)  Engaging in an act or practice proscribed by s.

12  560.111.

13         (i)  Insolvency or operating in an unsafe and unsound

14  manner.

15         (j)  Failure by a money transmitter to remove a money

16  transmitter-affiliated party after the office department has

17  issued and served upon the money transmitter a final order

18  setting forth a finding that the money transmitter-affiliated

19  party has violated any provision of the code.

20         (k)  Making any material misstatement or

21  misrepresentation or committing any fraud in an initial or

22  renewal application for registration.

23         (l)  Committing any act resulting in an application for

24  registration, or a registration or its equivalent, to practice

25  any profession or occupation being denied, suspended, revoked,

26  or otherwise acted against by a registering authority in any

27  jurisdiction or a finding by an appropriate regulatory body of

28  engaging in unlicensed activity as a money transmitter within

29  any jurisdiction.

30         (m)  Committing any act resulting in a registration or

31  its equivalent, or an application for registration, to

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 1  practice any profession or occupation being denied, suspended,

 2  or otherwise acted against by a registering authority in any

 3  jurisdiction for a violation of 18 U.S.C. s. 1956, 31 U.S.C.

 4  s. 5324, or any other law, rule, or regulation of another

 5  state or of the United States relating to the business of

 6  money transmission or usury which may cause the denial or

 7  revocation of a money transmitter license or registration in

 8  such jurisdiction.

 9         (n)  Having been convicted of or found guilty of, or

10  having pleaded guilty or nolo contendere to, any felony or

11  crime punishable by imprisonment of 1 year or more under the

12  law of any state or of the United States which involves fraud,

13  moral turpitude, or dishonest dealing, without regard to

14  whether a judgment of conviction has been entered by the

15  court.

16         (o)  Having been convicted of or found guilty of, or

17  having pleaded guilty or nolo contendere to, a crime under 18

18  U.S.C. s. 1956 or 31 U.S.C. s. 5324, without regard to whether

19  a judgment of conviction has been entered by the court.

20         (p)  Having been convicted of or found guilty of, or

21  having pleaded guilty or nolo contendere to, misappropriation,

22  conversion, or unlawful withholding of moneys that belong to

23  others and were received in the conduct of the business of the

24  money transmitter.

25         (q)  Failure to inform the office department in writing

26  within 15 days after pleading guilty or nolo contendere to, or

27  being convicted or found guilty of, any felony or crime

28  punishable by imprisonment of 1 year or more under the law of

29  any state or of the United States, or of any crime involving

30  fraud, moral turpitude, or dishonest dealing, without regard

31  

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 1  to whether a judgment of conviction has been entered by the

 2  court.

 3         (r)  Aiding, assisting, procuring, advising, or

 4  abetting any person in violating a provision of this code or

 5  any order or rule of the office or commission department.

 6         (s)  Failure to timely pay any fee, charge, or fine

 7  under the code.

 8         (t)  Failure to pay any judgment entered by any court

 9  within 30 days after the judgment becomes final.

10         (u)  Engaging or holding oneself out to be engaged in

11  the business of a money transmitter without the proper

12  registration.

13         (v)  Any action that would be grounds for denial of a

14  registration or for revocation, suspension, or restriction of

15  a registration previously granted under part III of this

16  chapter.

17         (w)  Failure to pay any fee, charge, or fine under the

18  code.

19         (x)  Engaging or advertising engagement in the business

20  of a money transmitter without a registration, unless the

21  person is exempted from the registration requirements of the

22  code.

23         (2)  The office department may issue a cease and desist

24  order or removal order, suspend or revoke any previously

25  issued registration, or take any other action within the

26  authority of the office department against a money transmitter

27  based on any fact or condition that exists and that, if it had

28  existed or been known to exist at the time the money

29  transmitter applied for registration, would have been grounds

30  for denial of registration.

31  

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 1         Section 696.  Section 560.115, Florida Statutes, is

 2  amended to read:

 3         560.115  Surrender of registration.--Any money

 4  transmitter registered pursuant to the code may voluntarily

 5  surrender its registration at any time by giving written

 6  notice to the office department.

 7         Section 697.  Section 560.116, Florida Statutes, is

 8  amended to read:

 9         560.116  Civil immunity.--Any person having reason to

10  believe that a provision of the code is being violated, or has

11  been violated, or is about to be violated, may file a

12  complaint with the office department setting forth the details

13  of the alleged violation. An immunity from civil liability is

14  hereby granted to any person who furnishes such information,

15  unless the information provided is false and the person

16  providing the information does so with reckless disregard for

17  the truth.

18         Section 698.  Section 560.117, Florida Statutes, is

19  amended to read:

20         560.117  Administrative fines; enforcement.--

21         (1)  The office department may, by complaint, initiate

22  a proceeding pursuant to chapter 120 to impose an

23  administrative fine against any person found to have violated

24  any provision of the code or a cease and desist order of the

25  office department or any written agreement with the office

26  department. However, the office department shall give notice,

27  in writing, if it suspects that the licensee has violated any

28  of the following provisions of the code and shall give the

29  licensee 15 days after actual notice is served on the person

30  within which to correct the violation before bringing

31  disciplinary action under the code:

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 1         (a)  Failure to timely pay any fee, charge, or fine

 2  under the code;

 3         (b)  Failure to pay any judgment entered by any court

 4  within 30 days after the judgment becomes final;

 5         (c)  Failure to notify the office department of a

 6  change of control of a money transmitter as required by s.

 7  560.127; or

 8         (d)  Failure to notify the office department of any

 9  change of address or fictitious name as required by s.

10  560.205.

11  

12  Except as provided in this section, such fine may not exceed

13  $100 a day for each violation. The office department may

14  excuse any such fine with a showing of good cause by the

15  person being fined.

16         (2)  If the office department finds that one or more

17  grounds exist for the suspension, revocation, or refusal to

18  renew or continue a license or registration issued under this

19  chapter, the office department may, in addition to or in lieu

20  of suspension, revocation, or refusal to renew or continue a

21  license or registration, impose a fine in an amount up to

22  $10,000 for each violation of this chapter.

23         (3)  Notwithstanding any other provision of this

24  section, the office department may impose a fine not to exceed

25  $1,000 per day for each day that a person violates the code by

26  engaging in the business of a money transmitter without being

27  registered.

28         (4)  Any administrative fine levied by the office

29  department may be enforced by the office department by

30  appropriate proceedings in the circuit court of the county in

31  which such person resides or maintains a principal office. In

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 1  any administrative or judicial proceeding arising under this

 2  section, a party may elect to correct the violation asserted

 3  by the office department and, upon the party's doing so, any

 4  fine ceases to accrue; however, an election to correct the

 5  violation does not render moot any administrative or judicial

 6  proceeding.

 7         Section 699.  Section 560.118, Florida Statutes, is

 8  amended to read:

 9         560.118  Examinations, reports, and internal audits;

10  penalty.--

11         (1)(a)  The office department may conduct an

12  examination of a money transmitter or authorized vendor by

13  providing not less than 15 days' advance notice to the money

14  transmitter or authorized vendor. However, if the office

15  department suspects that the money transmitter or authorized

16  vendor has violated any provisions of this code or any

17  criminal laws of this state or of the United States or is

18  engaging in an unsafe and unsound practice, the office

19  department may, at any time without advance notice, conduct an

20  examination of all affairs, activities, transactions,

21  accounts, business records, and assets of any money

22  transmitter or any money transmitter-affiliated party for the

23  protection of the public. For the purpose of examinations, the

24  office department may administer oaths and examine a money

25  transmitter or any of its affiliated parties concerning their

26  operations and business activities and affairs. The office

27  department may accept an audit or examination from any

28  appropriate regulatory agency or from an independent third

29  party with respect to the operations of a money transmitter or

30  an authorized vendor. The office department may also make a

31  joint or concurrent examination with any state or federal

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 1  regulatory agency. The office department may furnish a copy of

 2  all examinations made of such money transmitter or authorized

 3  vendor to the money transmitter and any appropriate regulatory

 4  agency provided that such agency agrees to abide by the

 5  confidentiality provisions as set forth in chapter 119.

 6         (b)  Persons subject to this chapter who are examined

 7  shall make available to the office department or its examiners

 8  the accounts, records, documents, files, information, assets,

 9  and matters which are in their immediate possession or control

10  and which relate to the subject of the examination. Those

11  accounts, records, documents, files, information, assets, and

12  matters not in their immediate possession shall be made

13  available to the office department or the office's

14  department's examiners within 10 days after actual notice is

15  served on such persons.

16         (c)  The audit of a money transmitter required under

17  this section may be performed by an independent third party

18  that has been approved by the office department or by a

19  certified public accountant authorized to do business in the

20  United States. The examination of a money transmitter or

21  authorized vendor required under this section may be performed

22  by an independent third party that has been approved by the

23  office department or by a certified public accountant

24  authorized to do business in the United States. The cost of

25  such an independent examination or audit shall be directly

26  borne by the money transmitter or authorized vendor.

27         (2)(a)  Annual financial reports that are required to

28  be filed under the code or any rules adopted thereunder must

29  be audited by an independent third party that has been

30  approved by the office department or by a certified public

31  accountant authorized to do business in the United States. The

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 1  money transmitter or authorized vendor shall directly bear the

 2  cost of the audit. This paragraph does not apply to any seller

 3  of payment instruments who can prove to the satisfaction of

 4  the office department that it has a combined total of fewer

 5  than 50 employees and authorized vendors or that its annual

 6  payment instruments issued from its activities as a payment

 7  instrument seller are less than $200,000.

 8         (b)  The commission department may, by rule, require

 9  each money transmitter or authorized vendor to submit

10  quarterly reports to the office department. The commission

11  department may require that each report contain a declaration

12  by an officer, or any other responsible person authorized to

13  make such declaration, that the report is true and correct to

14  the best of her or his knowledge and belief. Such report must

15  include such information as the commission department by rule

16  requires for that type of money transmitter.

17         (c)  The office department may levy an administrative

18  fine of up to $100 per day for each day the report is past

19  due, unless it is excused for good cause. In excusing any such

20  administrative fine, the office department may consider the

21  prior payment history of the money transmitter or authorized

22  vendor.

23         (3)  Any person who willfully violates this section or

24  fails to comply with any lawful written demand or order of the

25  office department made under this section commits a felony of

26  the third degree, punishable as provided in s. 775.082, s.

27  775.083, or s. 775.084.

28         Section 700.  Section 560.119, Florida Statutes, is

29  amended to read:

30         560.119  Deposit of fees and assessments.--The

31  application fees, registration renewal fees, late payment

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 1  penalties, civil penalties, administrative fines, and other

 2  fees or penalties provided for in the code shall, in all

 3  cases, be paid directly to the office department, which shall

 4  deposit such proceeds into the Regulatory Trust Fund. Each

 5  year, the Legislature shall appropriate from the trust fund to

 6  the office department sufficient moneys to pay the office's

 7  department's costs for administration of the code. The

 8  Regulatory Trust Fund is subject to the service charge imposed

 9  pursuant to chapter 215.

10         Section 701.  Paragraph (a) of subsection (1) and

11  subsections (2) and (3) of section 560.121, Florida Statutes,

12  are amended to read:

13         560.121  Records; limited restrictions upon public

14  access.--

15         (1)(a)  Orders of courts or of administrative law

16  judges for the production of confidential records or

17  information shall provide for inspection in camera by the

18  court or the administrative law judge and, after the court or

19  administrative law judge has made a determination that the

20  documents requested are relevant or would likely lead to the

21  discovery of admissible evidence, said documents shall be

22  subject to further orders by the court or the administrative

23  law judge to protect the confidentiality thereof. Any order

24  directing the release of information shall be immediately

25  reviewable, and a petition by the office department for review

26  of such order shall automatically stay further proceedings in

27  the trial court or the administrative hearing until the

28  disposition of such petition by the reviewing court. If any

29  other party files such a petition for review, it will operate

30  as a stay of such proceedings only upon order of the reviewing

31  court.

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 1         (2)  Examination reports, investigatory records,

 2  applications, and related information compiled by the office

 3  department, or photographic copies thereof, shall be retained

 4  by the office department for a period of at least 10 years.

 5         (3)  A copy of any document on file with the office

 6  department which is certified by the office department as

 7  being a true copy may be introduced in evidence as if it were

 8  the original. The commission department shall establish a

 9  schedule of fees for preparing true copies of documents.

10         Section 702.  Subsections (2), (4), (5), (6), and (7)

11  of section 560.123, Florida Statutes, are amended to read:

12         560.123  Florida control of money laundering in the

13  Money Transmitters' Code; reports of transactions involving

14  currency or monetary instruments; when required; purpose;

15  definitions; penalties; corpus delicti.--

16         (2)  It is the purpose of this section to require the

17  submission to the office department of reports and the

18  maintenance of certain records of transactions involving

19  currency or monetary instruments which reports and records

20  deter the use of money transmitters to conceal proceeds from

21  criminal activity and are useful in criminal, tax, or

22  regulatory investigations or proceedings.

23         (a)  Every money transmitter shall keep a record of

24  each financial transaction occurring in this state known to it

25  to involve currency or other monetary instrument, as the

26  commission department prescribes by rule, of a value in excess

27  of $10,000, to involve the proceeds of specified unlawful

28  activity, or to be designed to evade the reporting

29  requirements of this section or chapter 896 and shall maintain

30  appropriate procedures to ensure compliance with this section

31  and chapter 896.

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 1         (b)  Multiple financial transactions shall be treated

 2  as a single transaction if the money transmitter has knowledge

 3  that they are made by or on behalf of any person and result in

 4  either cash in or cash out totaling more than $10,000 during

 5  any day.

 6         (c)  Any money transmitter may keep a record of any

 7  financial transaction occurring in this state, regardless of

 8  the value, if it suspects that the transaction involves the

 9  proceeds of specified unlawful activity.

10         (d)  A money transmitter, or officer, employee, or

11  agent thereof, that files a report in good faith pursuant to

12  this section is not liable to any person for loss or damage

13  caused in whole or in part by the making, filing, or

14  governmental use of the report, or any information contained

15  therein.

16         (4)  In enforcing this section, the commission and

17  office department shall acknowledge and take into

18  consideration the requirements of Title 31, United States

19  Code, both to reduce the burden of fulfilling duplicate

20  requirements and to acknowledge the economic advantage of

21  having similar reporting and recordkeeping requirements

22  between state and federal regulatory authorities.

23         (5)(a)  Each money transmitter must file a report with

24  the office department of the record required by this section.

25  Each record filed pursuant to this section must be filed at

26  such time and contain such information as the commission

27  department requires by rule.

28         (b)  The timely filing of the report required by 31

29  U.S.C. s. 5313, with the appropriate federal agency is deemed

30  compliance with the reporting requirements of this subsection

31  

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 1  unless the reports are not regularly and comprehensively

 2  transmitted by the federal agency to the office department.

 3         (6)  The office department must retain a copy of all

 4  reports received under subsection (5) for a minimum of 5

 5  calendar years after receipt of the report. However, if a

 6  report or information contained in a report is known by the

 7  office department to be the subject of an existing criminal

 8  proceeding, the report must be retained for a minimum of 10

 9  calendar years from the date of receipt.

10         (7)  In addition to any other powers conferred upon the

11  office department to enforce and administer the code, the

12  office department may:

13         (a)  Bring an action in any court of competent

14  jurisdiction to enforce or administer this section. In such

15  action, the office department may seek award of any civil

16  penalty authorized by law and any other appropriate relief at

17  law or equity.

18         (b)  Issue and serve upon a person an order requiring

19  such person to cease and desist and take corrective action

20  whenever the office department finds that such person is

21  violating, has violated, or is about to violate any provision

22  of this section or chapter 896; any rule or order adopted

23  under this section or chapter 896; or any written agreement

24  related to this section or chapter 896 which is entered into

25  with the office department.

26         (c)  Issue and serve upon a person an order suspending

27  or revoking such person's money transmitter registration

28  whenever the office department finds that such person is

29  violating, has violated, or is about to violate any provision

30  of this section or chapter 896; any rule or order adopted

31  under this section or chapter 896; or any written agreement

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 1  related to this section or chapter 896 which is entered into

 2  with the office department.

 3         (d)  Issue and serve upon any person an order of

 4  removal whenever the office department finds that such person

 5  is violating, has violated, or is about to violate any

 6  provision of this section or chapter 896; any rule or order

 7  adopted under this section or chapter 896; or any written

 8  agreement related to this section or chapter 896 which is

 9  entered into with the office department.

10         (e)  Impose and collect an administrative fine against

11  any person found to have violated any provision of this

12  section or chapter 896; any rule or order adopted under this

13  section or chapter 896; or any written agreement related to

14  this section or chapter 896 which is entered into with the

15  office department, in an amount not exceeding $10,000 a day

16  for each willful violation or $500 a day for each negligent

17  violation.

18         Section 703.  Subsections (3) and (4) of section

19  560.125, Florida Statutes, are amended to read:

20         560.125  Money transmitter business by unauthorized

21  persons; penalties.--

22         (3)  Any person whose substantial interests are

23  affected by a proceeding brought by the office department

24  pursuant to the code may, pursuant to s. 560.113, petition any

25  court to enjoin the person or activity that is the subject of

26  the proceeding from violating any of the provisions of this

27  section. For the purpose of this subsection, any money

28  transmitter registered pursuant to the code, any person

29  residing in this state, and any person whose principal place

30  of business is in this state are presumed to be substantially

31  affected. In addition, the interests of a trade organization

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 1  or association are deemed substantially affected if the

 2  interests of any of its members are so affected.

 3         (4)  The office department may issue and serve upon any

 4  person who violates any of the provisions of this section a

 5  complaint seeking a cease and desist order in accordance with

 6  the procedures and in the manner prescribed by s. 560.112. The

 7  office department may also impose an administrative fine

 8  pursuant to s. 560.117(3) against any person who violates any

 9  of the provisions of this section.

10         Section 704.  Section 560.126, Florida Statutes, is

11  amended to read:

12         560.126  Significant events; notice required.--Unless

13  exempted by the office department, every money transmitter

14  must provide the office department with a written notice

15  within 15 days after the occurrence or knowledge of, whichever

16  period of time is greater, any of the following events:

17         (1)  The filing of a petition under the United States

18  Bankruptcy Code for bankruptcy or reorganization by the money

19  transmitter.

20         (2)  The commencement of any registration suspension or

21  revocation proceeding, either administrative or judicial, or

22  the denial of any original registration request or a

23  registration renewal, by any state, the District of Columbia,

24  any United States territory, or any foreign country, in which

25  the money transmitter operates or plans to operate or has

26  registered to operate.

27         (3)  A felony indictment relating to the money

28  transmission business involving the money transmitter or a

29  money transmitter-affiliated party of the money transmitter.

30         (4)  The felony conviction, guilty plea, or plea of

31  nolo contendere, if the court adjudicates the nolo contendere

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 1  pleader guilty, or the adjudication of guilt of a money

 2  transmitter or money transmitter-affiliated party.

 3         (5)  The interruption of any corporate surety bond

 4  required by the code.

 5         (6)  Any suspected criminal act, as defined by the

 6  commission department by rule, perpetrated in this state

 7  against a money transmitter or authorized vendor.

 8  

 9  However, no liability shall be incurred by any person as a

10  result of making a good faith effort to fulfill this

11  disclosure requirement.

12         Section 705.  Section 560.127, Florida Statutes, is

13  amended to read:

14         560.127  Control of a money transmitter.--

15         (1)  A person has control over a money transmitter if:

16         (a)  The person directly or indirectly or acting

17  through one or more other persons owns, controls, or has power

18  to vote 25 percent or more of any class of voting securities

19  of the money transmitter; or

20         (b)  The office department determines, after notice and

21  opportunity for hearing, that the person directly or

22  indirectly exercises a controlling influence over the

23  activities of the money transmitter.

24         (2)  In any case in which a person or a group of

25  persons, directly or indirectly or acting by or through one or

26  more persons, proposes to purchase or acquire a controlling

27  interest in a money transmitter, and thereby to change the

28  control of that money transmitter, each person or group of

29  persons shall provide written notice to the office department.

30         (a)  A money transmitter whose stock is traded on an

31  organized stock exchange shall provide the office department

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 1  with written notice within 15 days after knowledge of such

 2  change in control.

 3         (b)  A money transmitter whose stock is not publicly

 4  traded shall provide the office department with not less than

 5  30 days' prior written notice of such proposed change in

 6  control.

 7         (3)  After a review of the written notification, the

 8  office department may require the money transmitter to provide

 9  additional information relating to other and former addresses,

10  and the reputation, character, responsibility, and business

11  affiliations, of the proposed new owner or each of the

12  proposed new owners of the money transmitter.

13         (a)  The office department may deny the person or group

14  of persons proposing to purchase, or who have acquired control

15  of, a money transmitter if, after investigation, the office

16  department determines that the person or persons are not

17  qualified by reputation, character, experience, or financial

18  responsibility to control or operate the money transmitter in

19  a legal and proper manner and that the interests of the other

20  stockholders, if any, or the interests of the public generally

21  may be jeopardized by the proposed change in ownership,

22  controlling interest, or management.

23         (b)  The office department may disapprove any person

24  who has been convicted of, or pled guilty or nolo contendere

25  to, a violation of s. 560.123, s. 655.50, chapter 896, or any

26  similar state, federal, or foreign law.

27         Section 706.  Section 560.128, Florida Statutes, is

28  amended to read:

29         560.128  Consumer disclosure.--

30         (1)  Every money transmitter and authorized vendor

31  shall provide each consumer of a money transmitter transaction

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 1  a toll-free telephone number for the purpose of consumer

 2  contacts; however, in lieu of such toll-free telephone number,

 3  the money transmitter or authorized vendor may provide the

 4  address and telephone number of the office and the Division of

 5  Consumer Services of the Department of Financial Services

 6  department.

 7         (2)  The commission department may by rule require

 8  every money transmitter to display its registration at each

 9  location, including the location of each person designated by

10  the registrant as an authorized vendor, where the money

11  transmitter engages in the activities authorized by the

12  registration.

13         Section 707.  Section 560.129, Florida Statutes, is

14  amended to read:

15         560.129  Confidentiality.--

16         (1)  For purposes of this section, the definitions

17  contained in s. 560.103, as created by chapter 94-238, Laws of

18  Florida, and chapter 94-354, Laws of Florida, apply.

19         (1)(2)(a)  Except as otherwise provided in this

20  section, all information concerning an investigation or

21  examination by the office department pursuant to this chapter,

22  including any consumer complaint received by the office or the

23  Department of Financial Services, is confidential and exempt

24  from s. 119.07(1) and s. 24(a), Art. I of the State

25  Constitution until the investigation or examination ceases to

26  be active. For purposes of this section, an investigation or

27  examination is considered "active" so long as the office

28  department or any other administrative, regulatory, or law

29  enforcement agency of any jurisdiction is proceeding with

30  reasonable dispatch and has a reasonable good faith belief

31  

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 1  that action may be initiated by the office department or other

 2  administrative, regulatory, or law enforcement agency.

 3         (b)  Notwithstanding paragraph (a), all information

 4  obtained by the office department in the course of its

 5  investigation or examination which is a trade secret, as

 6  defined in s. 688.002, or which is personal financial

 7  information shall remain confidential. If any administrative,

 8  civil, or criminal proceeding against the money transmitter or

 9  a money transmitter-affiliated party is initiated and the

10  office department seeks to use matter that a registrant

11  believes to be a trade secret or personal financial

12  information, such records shall be subject to an in camera

13  review by the administrative law judge, if the matter is

14  before the Division of Administrative Hearings, or a judge of

15  any court of this state, any other state, or the United

16  States, as appropriate, for the purpose of determining if the

17  matter is a trade secret or is personal financial information.

18  If it is determined that the matter is a trade secret, the

19  matter shall remain confidential. If it is determined that the

20  matter is personal financial information, the matter shall

21  remain confidential unless the administrative law judge or

22  judge determines that, in the interests of justice, the matter

23  should become public.

24         (c)  If any administrative, civil, or criminal

25  proceeding against the money transmitter or a money

26  transmitter-affiliated party results in an acquittal or the

27  dismissal of all of the allegations against the money

28  transmitter or a money transmitter-affiliated party, upon the

29  request of any party, the administrative law judge or the

30  judge may order all or a portion of the record of the

31  proceeding to be sealed, and it shall thereafter be

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 1  confidential and exempt from s. 119.07(1) and s. 24(a), Art. I

 2  of the State Constitution.

 3         (d)  Except as necessary for the office department or

 4  any other administrative, regulatory, or law enforcement

 5  agency of any jurisdiction to enforce the provisions of this

 6  chapter or the law of any other state or the United States, a

 7  consumer complaint and other information concerning an

 8  investigation or examination shall remain confidential and

 9  exempt from s. 119.07(1) and s. 24(a), Art. I of the State

10  Constitution after the investigation or examination ceases to

11  be active to the extent that disclosure would:

12         1.  Jeopardize the integrity of another active

13  investigation;

14         2.  Reveal personal financial information;

15         3.  Reveal the identity of a confidential source; or

16         4.  Reveal investigative techniques or procedures.

17         (2)(3)  This section does not prevent or restrict:

18         (a)  Furnishing records or information to any

19  appropriate regulatory agency if such agency adheres to the

20  confidentiality provisions of the code;

21         (b)  Furnishing records or information to an

22  independent third party or a certified public accountant who

23  has been approved by the office department to conduct an

24  examination under s. 560.118(1)(b), if the independent third

25  party or certified public accountant adheres to the

26  confidentiality provisions of the code; or

27         (c)  Reporting any suspected criminal activity, with

28  supporting documents and information, to appropriate law

29  enforcement or prosecutorial agencies.

30         (3)(4)  All quarterly reports submitted by a money

31  transmitter to the office department under s. 560.118(2)(b)

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 1  are confidential and exempt from s. 119.07(1) and s. 24(a),

 2  Art. I of the State Constitution.

 3         (4)(5)  Examination reports, investigatory records,

 4  applications, and related information compiled by the office

 5  department, or photographic copies thereof, shall be retained

 6  by the office department for a period of at least 10 years.

 7         (5)(6)  Any person who willfully discloses information

 8  made confidential by this section commits a felony of the

 9  third degree, punishable as provided in s. 775.082 or s.

10  775.083.

11         Section 708.  Subsection (4) of section 560.202,

12  Florida Statutes, is amended to read:

13         560.202  Definitions.--In addition to the definitions

14  provided in s. 560.103, for purposes of this part, unless

15  otherwise clearly indicated by the context:

16         (4)  "Registrant" means a person registered by the

17  office department pursuant to this part.

18         Section 709.  Section 560.205, Florida Statutes, is

19  amended to read:

20         560.205  Qualifications of applicant for registration;

21  contents.--

22         (1)  To qualify for registration under this part, an

23  applicant must demonstrate to the office department such

24  character and general fitness as to command the confidence of

25  the public and warrant the belief that the registered business

26  will be operated lawfully and fairly. The office department

27  may investigate each applicant to ascertain whether the

28  qualifications and requirements prescribed by this part have

29  been met. The office's department's investigation may include

30  a criminal background investigation of all controlling

31  shareholders, principals, officers, directors, members, and

                                 820

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 1  responsible persons of a funds transmitter and a payment

 2  instrument seller and all persons designated by a funds

 3  transmitter or payment instrument seller as an authorized

 4  vendor. Each controlling shareholder, principal, officer,

 5  director, member, and responsible person of a funds

 6  transmitter or payment instrument seller, unless the applicant

 7  is a publicly traded corporation, a subsidiary thereof, or a

 8  subsidiary of a bank or bank holding company, shall file a

 9  complete set of fingerprints taken by an authorized law

10  enforcement officer. Such fingerprints must be submitted to

11  the Department of Law Enforcement or the Federal Bureau of

12  Investigation for state and federal processing. The commission

13  department may waive by rule the requirement that applicants

14  file a set of fingerprints or the requirement that such

15  fingerprints be processed by the Department of Law Enforcement

16  or the Federal Bureau of Investigation.

17         (2)  Each application for registration must be

18  submitted under oath to the office department on such forms as

19  the commission department prescribes by rule and must be

20  accompanied by a nonrefundable application fee. Such fee may

21  not exceed $500 for each payment instrument seller or funds

22  transmitter and $50 for each authorized vendor or location

23  operating within this state. The application forms shall set

24  forth such information as the commission department reasonably

25  requires, including, but not limited to:

26         (a)  The name and address of the applicant, including

27  any fictitious or trade names used by the applicant in the

28  conduct of its business.

29         (b)  The history of the applicant's material

30  litigation, criminal convictions, pleas of nolo contendere,

31  and cases of adjudication withheld.

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 1         (c)  A description of the activities conducted by the

 2  applicant, the applicant's history of operations, and the

 3  business activities in which the applicant seeks to engage in

 4  this state.

 5         (d)  A list identifying the applicant's proposed

 6  authorized vendors in this state, including the location or

 7  locations in this state at which the applicant and its

 8  authorized vendors propose to conduct registered activities.

 9         (e)  A sample authorized vendor contract, if

10  applicable.

11         (f)  A sample form of payment instrument, if

12  applicable.

13         (g)  The name and address of the clearing financial

14  institution or financial institutions through which the

15  applicant's payment instruments will be drawn or through which

16  such payment instruments will be payable.

17         (h)  Documents revealing that the net worth and bonding

18  requirements specified in s. 560.209 have been or will be

19  fulfilled.

20         (3)  Each application for registration by an applicant

21  that is a corporation shall also set forth such information as

22  the commission department reasonably requires, including, but

23  not limited to:

24         (a)  The date of the applicant's incorporation and

25  state of incorporation.

26         (b)  A certificate of good standing from the state or

27  country in which the applicant was incorporated.

28         (c)  A description of the corporate structure of the

29  applicant, including the identity of any parent or subsidiary

30  of the applicant, and the disclosure of whether any parent or

31  subsidiary is publicly traded on any stock exchange.

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 1         (d)  The name, business and residence addresses, and

 2  employment history for the past 5 years for each executive

 3  officer, each director, each controlling shareholder, and the

 4  responsible person who will be in charge of all the

 5  applicant's business activities in this state.

 6         (e)  The history of material litigation and criminal

 7  convictions, pleas of nolo contendere, and cases of

 8  adjudication withheld for each executive officer, each

 9  director, each controlling shareholder, and the responsible

10  person who will be in charge of the applicant's registered

11  activities.

12         (f)  Copies of the applicant's audited financial

13  statements for the current year and, if available, for the

14  immediately preceding 2-year period. In cases where the

15  applicant is a wholly owned subsidiary of another corporation,

16  the parent's consolidated audited financial statements may be

17  submitted to satisfy this requirement. An applicant who is not

18  required to file audited financial statements may satisfy this

19  requirement by filing unaudited financial statements verified

20  under penalty of perjury, as provided by the commission

21  department by rule.

22         (g)  An applicant who is not required to file audited

23  financial statements may file copies of the applicant's

24  unconsolidated, unaudited financial statements for the current

25  year and, if available, for the immediately preceding 2-year

26  period.

27         (h)  If the applicant is a publicly traded company,

28  copies of all filings made by the applicant with the United

29  States Securities and Exchange Commission, or with a similar

30  regulator in a country other than the United States, within

31  the year preceding the date of filing of the application.

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 1         (4)  Each application for registration submitted to the

 2  office department by an applicant that is not a corporation

 3  shall also set forth such information as the commission

 4  department reasonably requires, including, but not limited to:

 5         (a)  Evidence that the applicant is registered to do

 6  business in this state.

 7         (b)  The name, business and residence addresses,

 8  personal financial statement and employment history for the

 9  past 5 years for each individual having a controlling

10  ownership interest in the applicant, and each responsible

11  person who will be in charge of the applicant's registered

12  activities.

13         (c)  The history of material litigation and criminal

14  convictions, pleas of nolo contendere, and cases of

15  adjudication withheld for each individual having a controlling

16  ownership interest in the applicant and each responsible

17  person who will be in charge of the applicant's registered

18  activities.

19         (d)  Copies of the applicant's audited financial

20  statements for the current year, and, if available, for the

21  preceding 2 years. An applicant who is not required to file

22  audited financial statements may satisfy this requirement by

23  filing unaudited financial statements verified under penalty

24  of perjury, as provided by the commission department by rule.

25         (5)  Each applicant shall designate and maintain an

26  agent in this state for service of process.

27         Section 710.  Section 560.206, Florida Statutes, is

28  amended to read:

29         560.206  Investigation of applicants.--Upon the filing

30  of a properly completed application, accompanied by the

31  nonrefundable application fee and other required documents,

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 1  the office department shall investigate to ascertain whether

 2  the qualifications and requirements prescribed by this part

 3  have been met. If the office department finds that the

 4  applicant meets such qualifications and requirements, the

 5  office department shall issue the applicant a registration to

 6  engage in the business of selling payment instruments and

 7  transmitting funds in this state. Any registration issued

 8  under this part shall remain effective through April 30 of the

 9  second year following the date of issuance of the

10  registration, not to exceed 24 months, unless during such

11  period the registration is surrendered, suspended, or revoked.

12         Section 711.  Subsections (1) and (2) of section

13  560.207, Florida Statutes, are amended to read:

14         560.207  Renewal of registration; registration fee.--

15         (1)  Registration may be renewed for a 24-month period

16  or the remainder of any such period without proration

17  following the date of its expiration, upon the filing with the

18  office department of an application and other statements and

19  documents as may reasonably be required of registrants by the

20  commission department. However, the registrant must remain

21  qualified for such registration under the provisions of this

22  part.

23         (2)  All registration renewal applications shall be

24  accompanied by a renewal fee not to exceed $1,000. All renewal

25  applications must be filed on or after January 1 of the year

26  in which the existing registration expires, but before the

27  expiration date of April 30. If the renewal application is

28  filed prior to the expiration date of an existing

29  registration, no late fee shall be paid in connection with

30  such renewal application. If the renewal application is filed

31  within 60 calendar days after the expiration date of an

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 1  existing registration, then, in addition to the $1,000 renewal

 2  fee, the renewal application shall be accompanied by a

 3  nonrefundable late fee of $500. If the registrant has not

 4  filed a renewal application within 60 calendar days after the

 5  expiration date of an existing registration, a new application

 6  shall be filed with the office department pursuant to s.

 7  560.205.

 8         Section 712.  Subsections (2) and (3) of section

 9  560.208, Florida Statutes, are amended to read:

10         560.208  Conduct of business.--

11         (2)  Within 60 days after the date a registrant either

12  opens a location within this state or authorizes an authorized

13  vendor to operate on the registrant's behalf within this

14  state, the registrant shall notify the office department on a

15  form prescribed by the commission department by rule. The

16  notification shall be accompanied by a nonrefundable $50 fee

17  for each authorized vendor or location. Each notification

18  shall also be accompanied by a financial statement

19  demonstrating compliance with s. 560.209(1), unless compliance

20  has been demonstrated by a financial statement filed with the

21  registrant's quarterly report in compliance with s.

22  560.118(2). The financial statement must be dated within 90

23  days of the date of designation of the authorized vendor or

24  location. This subsection shall not apply to any authorized

25  vendor or location that has been designated by the registrant

26  before October 1, 2001.

27         (3)  Within 60 days after the date a registrant closes

28  a location within this state or withdraws authorization for an

29  authorized vendor to operate on the registrant's behalf within

30  this state, the registrant shall notify the office department

31  on a form prescribed by the commission department by rule.

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 1         Section 713.  Subsections (2), (3), (4), (5), and (6)

 2  of section 560.209, Florida Statutes, are amended to read:

 3         560.209  Net worth; corporate surety bond; collateral

 4  deposit in lieu of bond.--

 5         (2)  Before the office department may issue a

 6  registration, the applicant must provide to the office

 7  department a corporate surety bond, issued by a bonding

 8  company or insurance company authorized to do business in this

 9  state.

10         (a)  The corporate surety bond shall be in such amount

11  as may be determined by commission department rule, but shall

12  not exceed $250,000. However, the commission and office

13  department may consider extraordinary circumstances, such as

14  the registrant's financial condition, the number of locations,

15  and the existing or anticipated volume of outstanding payment

16  instruments or funds transmitted, and require an additional

17  amount above $250,000, up to $500,000.

18         (b)  The corporate surety bond shall be in a form

19  satisfactory to the office department and shall run to the

20  state for the benefit of any claimants in this state against

21  the applicant or its authorized vendors to secure the faithful

22  performance of the obligations of the applicant and its

23  authorized vendors with respect to the receipt, handling,

24  transmission, and payment of funds. The aggregate liability of

25  the corporate surety bond in no event shall exceed the

26  principal sum of the bond. Such claimants against the

27  applicant or its authorized vendors may themselves bring suit

28  directly on the corporate surety bond, or the Department of

29  Legal Affairs may bring suit thereon on behalf of such

30  claimants, in either one action or in successive actions.

31  

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 1         (c)  A corporate surety bond filed with the office

 2  department for purposes of compliance with this section may

 3  not be canceled by either the registrant or the corporate

 4  surety except upon written notice to the office department by

 5  registered or certified mail with return receipt requested. A

 6  cancellation shall not take effect less than 30 days after

 7  receipt by the office department of such written notice.

 8         (d)  The corporate surety must, within 10 days after it

 9  pays any claim to any claimant, give written notice to the

10  office department by registered or certified mail of such

11  payment with details sufficient to identify the claimant and

12  the claim or judgment so paid.

13         (e)  Whenever the principal sum of such bond is reduced

14  by one or more recoveries or payments, the registrant must

15  furnish a new or additional bond so that the total or

16  aggregate principal sum of such bond equals the sum required

17  by the commission department. Alternatively, a registrant may

18  furnish an endorsement executed by the corporate surety

19  reinstating the bond to the required principal sum thereof.

20         (3)  In lieu of such corporate surety bond, or of any

21  portion of the principal thereof required by this section, the

22  applicant may deposit collateral cash, securities, or

23  alternative security devices approved by the commission

24  department, with any federally insured financial institution.

25         (a)  Acceptable collateral deposit items in lieu of a

26  bond include cash and interest-bearing stocks and bonds,

27  notes, debentures, or other obligations of the United States

28  or any agency or instrumentality thereof, or guaranteed by the

29  United States, or of this state.

30         (b)  The collateral deposit must be in an aggregate

31  amount, based upon principal amount or market value, whichever

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 1  is lower, of not less than the amount of the required

 2  corporate surety bond or portion thereof.

 3         (c)  Collateral deposits made under this subsection

 4  shall be pledged to the office department and held by the

 5  insured financial institution to secure the same obligations

 6  as would the corporate surety bond, but the depositor is

 7  entitled to receive all interest and dividends thereon and

 8  may, with the approval of the office department, substitute

 9  other securities or deposits for those deposited. The

10  principal amount of the deposit shall be released only on

11  written authorization of the office department or on the order

12  of a court of competent jurisdiction.

13         (4)  A registrant must at all times have and maintain

14  the bond or collateral deposit in the amount prescribed by the

15  commission department. If the office department at any time

16  reasonably determines that the bond or elements of the

17  collateral deposit are insecure, deficient in amount, or

18  exhausted in whole or in part, the office department may, by

19  written order, require the filing of a new or supplemental

20  bond or the deposit of new or additional collateral deposit

21  items.

22         (5)  The bond and collateral deposit shall remain in

23  place for 5 years after the registrant ceases registered

24  operations in this state. The office department may permit the

25  bond or collateral deposit to be reduced or eliminated prior

26  to that time to the extent that the amount of the registrant's

27  outstanding payment instruments or funds transmitted in this

28  state are reduced. The office department may also permit a

29  registrant to substitute a letter of credit or such other form

30  of acceptable security for the bond or collateral deposit at

31  

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 1  the time the registrant ceases money transmission operations

 2  in this state.

 3         (6)  The office department may waive or reduce a

 4  registrant's net worth or bond or collateral deposit

 5  requirement. Such waiver or modification must be requested by

 6  the applicant or registrant, and may be granted upon a showing

 7  by the applicant or registrant to the satisfaction of the

 8  office department that:

 9         (a)  The existing net worth, bond, or collateral

10  deposit requirement is sufficiently in excess of the

11  registrant's highest potential level of outstanding payment

12  instruments or money transmissions in this state;

13         (b)  The direct and indirect cost of meeting the net

14  worth, bond, or collateral deposit requirement will restrict

15  the ability of the money transmitter to effectively serve the

16  needs of its customers and the public; or

17         (c)  The direct and indirect cost of meeting the net

18  worth, bond, or collateral requirement will not only have a

19  negative impact on the money transmitter but will severely

20  hinder the ability of the money transmitter to participate in

21  and promote the economic progress and welfare of this state or

22  the United States.

23         Section 714.  Paragraph (i) of subsection (2) and

24  subsections (3) and (4) of section 560.210, Florida Statutes,

25  are amended to read:

26         560.210  Permissible investments.--

27         (2)  Acceptable permissible investments include:

28         (i)  Any other investment approved by the commission

29  department.

30         (3)  Notwithstanding any other provision of this part,

31  the office department, with respect to any particular

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 1  registrant or all registrants, may limit the extent to which

 2  any class of permissible investments may be considered a

 3  permissible investment, except for cash and certificates of

 4  deposit.

 5         (4)  The office department may waive the permissible

 6  investments requirement if the dollar value of a registrant's

 7  outstanding payment instruments and funds transmitted do not

 8  exceed the bond or collateral deposit posted by the registrant

 9  under s. 560.209.

10         Section 715.  Subsection (2) of section 560.211,

11  Florida Statutes, is amended to read:

12         560.211  Records.--

13         (2)  The records required to be maintained by the code

14  may be maintained by the registrant at any location, provided

15  that the registrant notifies the office department in writing

16  of the location of the records in its application or

17  otherwise. The registrant shall make such records available to

18  the office department for examination and investigation in

19  this state, as permitted by the code, within 7 days after

20  receipt of a written request.

21         Section 716.  Subsection (2) of section 560.302,

22  Florida Statutes, is amended to read:

23         560.302  Definitions.--In addition to the definitions

24  provided in s. 560.103, unless otherwise clearly indicated by

25  the context, for purposes of this part:

26         (2)  "Registrant" means a person authorized by the

27  office department pursuant to this part.

28         Section 717.  Section 560.305, Florida Statutes, is

29  amended to read:

30         560.305  Application.--Each application for

31  registration shall be in writing and under oath to the office

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 1  department, in such form as the commission prescribes

 2  department may prescribe. The application shall include the

 3  following:

 4         (1)  The legal name and residence and business

 5  addresses of the applicant if the applicant is a natural

 6  person, or, if the applicant is a partnership, association, or

 7  corporation, the name of every partner, officer, or director

 8  thereof.

 9         (2)  The location of the principal office of the

10  applicant.

11         (3)  The complete address of any other locations at

12  which the applicant proposes to engage in such activities

13  since the provisions of registration apply to each and every

14  operating location of a registrant.

15         (4)  Such other information as the commission or office

16  department may reasonably requires require with respect to the

17  applicant or any money transmitter-affiliated party of the

18  applicant; however, the commission or office department may

19  not require more information than is specified in part II.

20         Section 718.  Section 560.306, Florida Statutes, is

21  amended to read:

22         560.306  Standards.--

23         (1)  In order to qualify for registration under this

24  part, an applicant must demonstrate to the office department

25  that he or she has such character and general fitness as will

26  command the confidence of the public and warrant the belief

27  that the registered business will be operated lawfully and

28  fairly. The office department may investigate each applicant

29  to ascertain whether the qualifications and requirements

30  prescribed by this part have been met. The office's

31  department's investigation may include a criminal background

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 1  investigation of all controlling shareholders, principals,

 2  officers, directors, members, and responsible persons of a

 3  check casher and a foreign currency exchanger and all persons

 4  designated by a foreign currency exchanger or check casher as

 5  an authorized vendor. Each controlling shareholder, principal,

 6  officer, director, member, and responsible person of a check

 7  casher or foreign currency exchanger, unless the applicant is

 8  a publicly traded corporation, a subsidiary thereof, or a

 9  subsidiary of a bank or bank holding company, shall file a

10  complete set of fingerprints taken by an authorized law

11  enforcement officer. Such fingerprints must be submitted to

12  the Department of Law Enforcement or the Federal Bureau of

13  Investigation for state and federal processing. The commission

14  department may waive by rule the requirement that applicants

15  file a set of fingerprints or the requirement that such

16  fingerprints be processed by the Department of Law Enforcement

17  or the Federal Bureau of Investigation.

18         (2)  The office department may deny registration if it

19  finds that the applicant, or any money transmitter-affiliated

20  party of the applicant, has been convicted of a crime

21  involving moral turpitude in any jurisdiction or of a crime

22  which, if committed in this state, would constitute a crime

23  involving moral turpitude under the laws of this state. For

24  the purposes of this part, a person shall be deemed to have

25  been convicted of a crime if such person has either pleaded

26  guilty to or been found guilty of a charge before a court or

27  federal magistrate, or by the verdict of a jury, irrespective

28  of the pronouncement of sentence or the suspension thereof.

29  The office department may take into consideration the fact

30  that such plea of guilty, or such decision, judgment, or

31  verdict, has been set aside, reversed, or otherwise abrogated

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 1  by lawful judicial process or that the person convicted of the

 2  crime received a pardon from the jurisdiction where the

 3  conviction was entered or received a certificate pursuant to

 4  any provision of law which removes the disability under this

 5  part because of such conviction.

 6         (3)  The office department may deny an application for

 7  registration if the applicant or money transmitter-affiliated

 8  party of the applicant is the subject of a pending criminal

 9  prosecution or governmental enforcement action, in any

10  jurisdiction, until the conclusion of such criminal

11  prosecution or enforcement action.

12         (4)  Each registration application and renewal

13  application must specify the location at which the applicant

14  proposes to establish its principal place of business and any

15  other location, including authorized vendors operating in this

16  state. The registrant shall notify the office department of

17  any changes to any such locations. Any registrant may satisfy

18  this requirement by providing the office department with a

19  list of such locations, including all authorized vendors

20  operating in this state, not less than annually. A registrant

21  may not transact business as a check casher or a foreign

22  currency exchanger except pursuant to the name under which it

23  is registered.

24         (5)  Each applicant shall designate and maintain an

25  agent in this state for service of process.

26         Section 719.  Subsections (2) and (3) of section

27  560.307, Florida Statutes, are amended to read:

28         560.307  Fees.--

29         (2)  Within 60 days after the date a registrant either

30  opens a location within this state or authorizes an authorized

31  vendor to operate on the registrant's behalf within this

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 1  state, the registrant shall notify the office department on a

 2  form prescribed by the commission department by rule. The

 3  notification shall be accompanied by a nonrefundable $50 fee

 4  for each authorized vendor or location. This subsection shall

 5  not apply to any authorized vendor or location that has been

 6  designated by the registrant before October 1, 2001.

 7         (3)  Within 60 days after the date a registrant closes

 8  a location within this state or withdraws authorization for an

 9  authorized vendor to operate on the registrant's behalf within

10  this state, the registrant shall notify the office department

11  on a form prescribed by the commission department by rule.

12         Section 720.  Subsections (2) and (4) of section

13  560.308, Florida Statutes, are amended to read:

14         560.308  Registration terms; renewal; renewal fees.--

15         (2)  The office department shall renew registration

16  upon receipt of a completed renewal form and payment of a

17  nonrefundable renewal fee not to exceed $500. The completed

18  renewal form and payment of the renewal fee shall occur on or

19  after June 1 of the year in which the existing registration

20  expires.

21         (4)  Registration that is not renewed on or before the

22  expiration date of the registration period automatically

23  expires. A renewal application and fee, and a late fee of

24  $250, must be filed within 60 calendar days after the

25  expiration of an existing registration in order for the

26  registration to be reinstated. If the registrant has not filed

27  a renewal application within 60 days after the expiration date

28  of an existing registration, a new application must be filed

29  with the office department pursuant to s. 560.307.

30         Section 721.  Subsections (3) and (4) of section

31  560.309, Florida Statutes, are amended to read:

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 1         560.309  Rules.--

 2         (3)  The commission department may by rule require

 3  every check casher to display its registration and post a

 4  notice containing its charges for cashing payment instruments.

 5         (4)  Exclusive of the direct costs of verification

 6  which shall be established by commission department rule, no

 7  check casher shall:

 8         (a)  Charge fees, except as otherwise provided by this

 9  part, in excess of 5 percent of the face amount of the payment

10  instrument, or 6 percent without the provision of

11  identification, or $5, whichever is greater;

12         (b)  Charge fees in excess of 3 percent of the face

13  amount of the payment instrument, or 4 percent without the

14  provision of identification, or $5, whichever is greater, if

15  such payment instrument is the payment of any kind of state

16  public assistance or federal social security benefit payable

17  to the bearer of such payment instrument; or

18         (c)  Charge fees for personal checks or money orders in

19  excess of 10 percent of the face amount of those payment

20  instruments, or $5, whichever is greater.

21         (d)  As used in this subsection, "identification"

22  means, and is limited to, an unexpired and otherwise valid

23  driver license, a state identification card issued by any

24  state of the United States or its territories or the District

25  of Columbia, and showing a photograph and signature, a United

26  States Government Resident Alien Identification Card, a United

27  States passport, or a United States Military identification

28  card.

29         Section 722.  Subsections (2) and (5) of section

30  560.310, Florida Statutes, are amended to read:

31  

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 1         560.310  Records of check cashers and foreign currency

 2  exchangers.--

 3         (2)  The records required to be maintained by the code

 4  may be maintained by the registrant at any location, provided

 5  that the registrant notifies the office department, in

 6  writing, of the location of the records in its application or

 7  otherwise. The registrant shall make such records available to

 8  the office department for examination and investigation in

 9  this state, as permitted by the code, within 7 days after

10  receipt of a written request.

11         (5)  Any person who willfully violates this section or

12  fails to comply with any lawful written demand or order of the

13  office department made pursuant to this section commits a

14  felony of the third degree, punishable as provided in s.

15  775.082, s. 775.083, or s. 775.084.

16         Section 723.  Subsection (5) of section 560.402,

17  Florida Statutes, is amended to read:

18         560.402  Definitions.--In addition to the definitions

19  provided in ss. 560.103, 560.202, and 560.302 and unless

20  otherwise clearly indicated by the context, for purposes of

21  this part:

22         (5)  "Deferred presentment provider" means a person who

23  engages in a deferred presentment transaction and is

24  registered under part II or part III of the code and has filed

25  a declaration of intent with the office department.

26         Section 724.  Subsections (1) and (4) of section

27  560.403, Florida Statutes, are amended to read:

28         560.403  Requirements of registration; declaration of

29  intent.--

30         (1)  No person, unless otherwise exempt from this

31  chapter, shall engage in a deferred presentment transaction

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 1  unless the person is registered under the provisions of part

 2  II or part III and has on file with the office department a

 3  declaration of intent to engage in deferred presentment

 4  transactions. The declaration of intent shall be under oath

 5  and on such form as the commission department prescribes by

 6  rule.  The declaration of intent shall be filed together with

 7  a nonrefundable filing fee of $1,000. Any person who is

 8  registered under part II or part III on the effective date of

 9  this act and intends to engage in deferred presentment

10  transactions shall have 60 days after the effective date of

11  this act to file a declaration of intent.

12         (4)  The notice of intent of a registrant under this

13  part who fails to timely renew his or her intent to engage in

14  the business of deferred presentment transactions or to act as

15  a deferred presentment provider on or before the expiration

16  date of the registration period automatically expires. A

17  renewal declaration of intent and fee, and a late fee of $500,

18  must be filed within 60 calendar days after the expiration of

19  an existing registration in order for the declaration of

20  intent to be reinstated. If the registrant has not filed a

21  renewal declaration of intent within 60 days after the

22  expiration date of an existing registration, a new declaration

23  must be filed with the office department.

24         Section 725.  Subsection (3), paragraph (b) of

25  subsection (19), paragraph (b) of subsection (22), and

26  subsection (23) of section 560.404, Florida Statutes, are

27  amended to read:

28         560.404  Requirements for deferred presentment

29  transactions.--

30  

31  

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 1         (3)  Each written agreement shall contain the following

 2  information, in addition to any information the commission

 3  department requires by rule:

 4         (a)  The name or trade name, address, and telephone

 5  number of the deferred presentment provider and the name and

 6  title of the person who signs the agreement on behalf of the

 7  deferred presentment provider.

 8         (b)  The date the deferred presentment transaction was

 9  made.

10         (c)  The amount of the drawer's check.

11         (d)  The length of deferral period.

12         (e)  The last day of the deferment period.

13         (f)  The address and telephone number of the office and

14  the Division of Consumer Services of the Department of

15  Financial Services department.

16         (g)  A clear description of the drawer's payment

17  obligations under the deferred presentment transaction.

18         (h)  The transaction number assigned by the office's

19  department's database.

20         (19)  A deferred presentment provider may not enter

21  into a deferred presentment transaction with a person who has

22  an outstanding deferred presentment transaction with that

23  provider or with any other deferred presentment provider, or

24  with a person whose previous deferred presentment transaction

25  with that provider or with any other provider has been

26  terminated for less than 24 hours. The deferred presentment

27  provider must verify such information as follows:

28         (b)  The deferred presentment provider shall access the

29  office's department's database established pursuant to

30  subsection (23) and shall verify whether any other deferred

31  presentment provider has an outstanding deferred presentment

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 1  transaction with a particular person or has terminated a

 2  transaction with that person within the previous 24 hours.

 3  Prior to the time that the office department has implemented

 4  such a database, the deferred presentment provider may rely

 5  upon the written verification of the drawer as provided in

 6  subsection (20).

 7         (22)

 8         (b)  At the commencement of the grace period, the

 9  deferred presentment provider shall provide the drawer:

10         1.  Verbal notice of the availability of the grace

11  period consistent with the written notice in subsection (20).

12         2.  A list of approved consumer credit counseling

13  agencies prepared by the office department. The department

14  shall prepare the list by October 1, 2001. The office

15  department list shall include nonprofit consumer credit

16  counseling agencies affiliated with the National Foundation

17  for Credit Counseling which provide credit counseling services

18  to Florida residents in person, by telephone, or through the

19  Internet. The office department list must include phone

20  numbers for the agencies, the counties served by the agencies,

21  and indicate the agencies that provide telephone counseling

22  and those that provide Internet counseling. The office

23  department shall update the list at least once each year.

24         3.  The following notice in at least 14-point type in

25  substantially the following form:

26  

27         AS A CONDITION OF OBTAINING A GRACE PERIOD

28         EXTENDING THE TERM OF YOUR DEFERRED PRESENTMENT

29         AGREEMENT FOR AN ADDITIONAL 60 DAYS, UNTIL

30         [DATE], WITHOUT ANY ADDITIONAL FEES, YOU MUST

31         COMPLETE CONSUMER CREDIT COUNSELING PROVIDED BY

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 1         AN AGENCY INCLUDED ON THE LIST THAT WILL BE

 2         PROVIDED TO YOU BY THIS PROVIDER. YOU MAY ALSO

 3         AGREE TO COMPLY WITH AND ADHERE TO A REPAYMENT

 4         PLAN APPROVED BY THE AGENCY. THE COUNSELING MAY

 5         BE IN PERSON, BY TELEPHONE, OR THROUGH THE

 6         INTERNET. YOU MUST NOTIFY US WITHIN SEVEN (7)

 7         DAYS, BY [DATE], THAT YOU HAVE MADE AN

 8         APPOINTMENT WITH SUCH A CONSUMER CREDIT

 9         COUNSELING AGENCY. YOU MUST ALSO NOTIFY US

10         WITHIN SIXTY (60) DAYS, BY [DATE], THAT YOU

11         HAVE COMPLETED THE CONSUMER CREDIT COUNSELING.

12         WE MAY VERIFY THIS INFORMATION WITH THE AGENCY.

13         IF YOU FAIL TO PROVIDE EITHER THE 7-DAY OR

14         60-DAY NOTICE, OR IF YOU HAVE NOT MADE THE

15         APPOINTMENT OR COMPLETED THE COUNSELING WITHIN

16         THE TIME REQUIRED, WE MAY DEPOSIT OR PRESENT

17         YOUR CHECK FOR PAYMENT AND PURSUE ALL LEGALLY

18         AVAILABLE CIVIL MEANS TO ENFORCE THE DEBT.

19         (23)  On or before March 1, 2002, The office department

20  shall implement a common database with real-time access

21  through an Internet connection for deferred presentment

22  providers, as provided in this subsection. The database must

23  be accessible to the office department and the deferred

24  presentment providers to verify whether any deferred

25  presentment transactions are outstanding for a particular

26  person. Deferred presentment providers shall submit such data

27  before entering into each deferred presentment transaction in

28  such format as the commission department shall require by

29  rule, including the drawer's name, social security number or

30  employment authorization alien number, address, driver's

31  license number, amount of the transaction, date of

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 1  transaction, the date that the transaction is closed, and such

 2  additional information as is required by the commission

 3  department. The commission department may impose a fee not to

 4  exceed $1 per transaction for data required to be submitted by

 5  a deferred presentment provider. A deferred presentment

 6  provider may rely on the information contained in the database

 7  as accurate and is not subject to any administrative penalty

 8  or civil liability as a result of relying on inaccurate

 9  information contained in the database. The commission

10  department may adopt rules to administer and enforce the

11  provisions of this section and to assure that the database is

12  used by deferred presentment providers in accordance with this

13  section.

14         Section 726.  Section 560.4041, Florida Statutes, is

15  amended to read:

16         560.4041  Database for deferred presentment providers;

17  public-records exemption.--The identifying information

18  contained in the database for deferred presentment providers,

19  which is authorized under s. 560.404, is confidential and

20  exempt from s. 119.07(1), and s. 24(a), Art. I of the State

21  Constitution, except that the identifying information in the

22  database may be accessed by deferred presentment providers to

23  verify whether any deferred presentment transactions are

24  outstanding for a particular person and by the office

25  Department of Banking and Finance for the purpose of

26  maintaining the database. This section is subject to the Open

27  Government Sunset Review Act of 1995 in accordance with s.

28  119.15, and shall stand repealed October 2, 2006, unless

29  reviewed and saved from repeal through reenactment by the

30  Legislature.

31  

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 1         Section 727.  Subsections (1), (2), and (3) of section

 2  560.407, Florida Statutes, are amended to read:

 3         560.407  Records.--

 4         (1)  Each registrant under this part must maintain all

 5  books, accounts, records, and documents necessary to determine

 6  the registrant's compliance with the provisions of the code.

 7  Such books, accounts, records, and documents shall be retained

 8  for a period of at least 3 years unless a longer period is

 9  expressly required by the commission department, the laws of

10  this state, or any federal law.

11         (2)  The records required to be maintained by the code

12  or any rule adopted pursuant thereto may be maintained by the

13  registrant at any location within this state, provided that

14  the registrant notifies the office department, in writing, of

15  the location of the records in its application or otherwise.

16         (3)  A registrant shall make records available to the

17  office department for examination and investigation in this

18  state, as permitted by the code, within 7 days after receipt

19  of a written request.

20         Section 728.  Subsection (2) of section 560.408,

21  Florida Statutes, is amended to read:

22         560.408  Legislative intent; report.--

23         (2)  The director of the office shall submit a report

24  on January 1, 2004, Comptroller shall submit a report to the

25  President of the Senate and the Speaker of the House of

26  Representatives on January 1, 2003, and January 1, 2004,

27  containing findings and conclusions concerning the

28  effectiveness of this act in preventing fraud, abuse, and

29  other unlawful activity associated with deferred presentment

30  transactions. The report may contain legislative

31  recommendations addressing the prevention of fraud, abuse, and

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 1  other unlawful activity associated with deferred presentment

 2  transactions. Prior to filing each the report, the Comptroller

 3  and director of the office shall consult with the Attorney

 4  General for the purpose of including any recommendations or

 5  concerns expressed by the Attorney General.

 6         Section 729.  Section 561.051, Florida Statutes, is

 7  amended to read:

 8         561.051  Reporting requirements of director.--The

 9  director of the division shall promptly report and remit to

10  the Chief Financial Officer Treasurer all taxes and fees

11  collected by him or her hereunder and shall send copies of the

12  reports to the Comptroller.

13         Section 730.  Section 562.44, Florida Statutes, is

14  amended to read:

15         562.44  Donation of forfeited beverages or raw

16  materials to state institutions; sale of forfeited

17  beverages.--Any alcoholic beverage or raw materials used for

18  the manufacture of alcoholic beverages that may be seized and

19  forfeited under any of the provisions of the Beverage Law may,

20  with the approval and consent of the Department of Business

21  and Professional Regulation, be donated to any state-operated

22  or charitable institution that may have a legitimate use

23  therefor in the operation of such institution, or the division

24  may sell such beverage so seized and forfeited to any licensed

25  wholesaler in the state, upon the condition that all federal

26  and state taxes that may be due thereon shall be paid, that

27  such sale shall be made only upon submission by said division

28  of a request for bids to at least five wholesale dealers in

29  the state, and that such sale shall be made to the highest and

30  best bidder therefor. However, if no satisfactory bid from a

31  wholesaler is received, the division may then reject all bids

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 1  and sell such beverage so seized and forfeited to any

 2  retailer, licensed in this state to sell such beverage, upon

 3  the condition that all federal and state taxes that may be due

 4  thereon shall have been paid, that such sale shall be made

 5  only upon submission by said division of a request for bids to

 6  at least five retail dealers in the state and that such sale

 7  shall be to the highest and best bidder therefor. All moneys

 8  received from such sales shall be paid by the division to the

 9  Chief Financial Officer State Treasurer for the account of the

10  beverage fund and shall be subject to disbursement in

11  accordance with the law relating thereto.

12         Section 731.  Section 567.08, Florida Statutes, is

13  amended to read:

14         567.08  Refund of unused portion of state license

15  tax.--When any county votes by an election to discontinue

16  permitting the sale of intoxicating liquors, wines, or beer,

17  prior to the date of expiration of any license issued by the

18  state for the sale of intoxicating liquors, wines, or beer in

19  such county, the fee for the unexpired and unused portion of

20  said license shall be refunded to the licensee by warrant

21  drawn by the Chief Financial Officer, State Comptroller on the

22  State Treasurer who shall pay such warrants from any moneys in

23  the State Treasury not otherwise appropriated.

24         Section 732.  Subsections (1) and (2) of section

25  569.205, Florida Statutes, are amended to read:

26         569.205  Department of Business and Professional

27  Regulation Tobacco Settlement Trust Fund.--

28         (1)  The Department of Business and Professional

29  Regulation Tobacco Settlement Trust Fund is hereby created

30  within that department. Funds to be credited to the trust fund

31  shall consist of funds disbursed, by nonoperating transfer,

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 1  from the Department of Financial Services Banking and Finance

 2  Tobacco Settlement Clearing Trust Fund in amounts equal to the

 3  annual appropriations made from this trust fund.

 4         (2)  Notwithstanding the provisions of s. 216.301 and

 5  pursuant to s. 216.351, any unencumbered balance in the trust

 6  fund at the end of any fiscal year and any encumbered balance

 7  remaining undisbursed on December 31 of the same calendar year

 8  shall revert to the Department of Financial Services Banking

 9  and Finance Tobacco Settlement Clearing Trust Fund.

10         Section 733.  Subsection (1) of section 569.215,

11  Florida Statutes, is amended to read:

12         569.215  Confidential records relating to tobacco

13  settlement agreement.--

14         (1)  Proprietary confidential business information

15  received by the Governor, the Attorney General, or outside

16  counsel representing the State of Florida in negotiations for

17  settlement payments pursuant to the settlement agreement, as

18  amended, in the case of State of Florida et al. v. American

19  Tobacco Company et al., No. 95-1466AH, in the Circuit Court of

20  the Fifteenth Judicial Circuit, in and for Palm Beach County,

21  or received by the Chief Financial Officer Comptroller or the

22  Auditor General for any purpose relating to verifying

23  settlement payments made pursuant to the settlement agreement

24  is confidential and exempt from the provisions of s. 119.07(1)

25  and s. 24(a) of Art. I of the State Constitution. Any state or

26  federal agency that is authorized to have access to such

27  documents by any provision of law shall be granted such access

28  in furtherance of such agency's statutory duties,

29  notwithstanding the provisions of this section. Proprietary

30  confidential business information received under this section

31  shall not retain its confidential and exempt status if that

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 1  information is made public, including publicizing such

 2  information in a Securities and Exchange Commission filing, an

 3  annual financial statement, or other document or means. This

 4  exemption is subject to the Open Government Sunset Review Act

 5  of 1995 in accordance with s. 119.15, and shall stand repealed

 6  on October 2, 2006, unless reviewed and saved from repeal

 7  through reenactment by the Legislature.

 8         Section 734.  Subsection (2) of section 570.13, Florida

 9  Statutes, is amended to read:

10         570.13  Salary of commissioner, officers, and

11  employees; expenses.--

12         (2)  The reasonable and necessary travel and other

13  expenses of the commissioner, assistant commissioner, counsel,

14  directors, and other officers and employees of the department,

15  while actually engaged in the performance of their duties,

16  outside of the City of Tallahassee, or if any such officer or

17  employee be in charge of or regularly employed at a branch

18  office of the department, the reasonable and necessary travel

19  and other expenses outside the place such branch office is

20  located, shall be paid from the State Treasury after audit by

21  the Chief Financial Officer Comptroller of vouchers approved

22  by the department in the amount provided in s. 112.061.

23         Section 735.  Subsection (1) of section 570.195,

24  Florida Statutes, is amended to read:

25         570.195  Tobacco farmers; assistance.--

26         (1)  In order to assist Florida tobacco farmers in

27  reducing encumbered debt on stranded investment in equipment,

28  the nonrecurring sum of $2.5 million is appropriated from the

29  Department of Financial Services Banking and Finance Tobacco

30  Settlement Clearing Trust Fund to the Department of

31  Agriculture and Consumer Services for the purchase at fair

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 1  market value of equipment associated with agricultural

 2  production of tobacco from persons or entities that were using

 3  such equipment for production of tobacco between April 1 and

 4  October 1, 2000, on land within this state and sign a letter

 5  of intent to cease tobacco production upon the development and

 6  implementation of an alternative crop that would provide the

 7  same net revenue and proportional costs as tobacco. The

 8  department may adopt rules that, at a minimum, define and

 9  describe the equipment to be purchased under this section,

10  prescribe criteria for identifying persons and entities who

11  are eligible to have such equipment purchased by the

12  department, and prescribe procedures to be followed for

13  equipment purchases. From the funds appropriated by this

14  section, the department is authorized to expend such sums as

15  are reasonable and necessary to administer the program.

16         Section 736.  Section 570.20, Florida Statutes, is

17  amended to read:

18         570.20  General Inspection Trust Fund.--All donations

19  and all inspection fees and other funds authorized and

20  received from whatever source in the enforcement of the

21  inspection laws administered by the department shall be paid

22  into the General Inspection Trust Fund of Florida, which is

23  created in the office of the Chief Financial Officer

24  Treasurer.  All expenses incurred in carrying out the

25  provisions of the inspection laws shall be paid from this fund

26  as other funds are paid from the State Treasury.  A percentage

27  of all revenue deposited in this fund, including transfers

28  from any subsidiary accounts, shall be deposited in the

29  General Revenue Fund pursuant to chapter 215, except that

30  funds collected for marketing orders shall pay at the rate of

31  3 percent.

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 1         Section 737.  Subsection (6) of section 574.03, Florida

 2  Statutes, is amended to read:

 3         574.03  Warehouseman; licenses and fees.--

 4         (6)  As a prerequisite to the issuance of a license

 5  under the provisions of this section, each applicant shall

 6  furnish evidence to the Department of Agriculture and Consumer

 7  Services that the applicant has in force a standard fire and

 8  extended coverage insurance policy for the full market value

 9  of the maximum amount of tobacco contained in his or her sales

10  warehouse at any one time during the marketing season for

11  which the license is sought.  The insurance policy shall be

12  written by an insurance company of the warehouseman's choice

13  authorized to transact business in this state, and such

14  insurance coverage shall be approved in form by the Office of

15  Insurance Regulation of the Financial Services Commission

16  Department of Insurance, and a copy of the insurance policy

17  shall be filed with the director of the Division of Marketing

18  and Development of the Department of Agriculture and Consumer

19  Services. The policy shall contain an endorsement requiring

20  notification to the director of the Division of Marketing and

21  Development of the Department of Agriculture and Consumer

22  Services by the insurance company at least 10 days prior to

23  cancellation of their intention to cancel the policy.

24         Section 738.  Section 589.06, Florida Statutes, is

25  amended to read:

26         589.06  Warrants for payment of accounts.--Upon the

27  presentation to the Chief Financial Officer Comptroller of any

28  accounts duly approved by the Division of Forestry,

29  accompanied by such itemized vouchers or accounts as shall be

30  required by her or him, the Chief Financial Officer

31  Comptroller shall audit the same and draw a warrant on the

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 1  State Treasurer for the amount for which the account is

 2  audited, payable out of funds to the credit of the division.

 3         Section 739.  Paragraph (a) of subsection (7) of

 4  section 597.010, Florida Statutes, is amended to read:

 5         597.010  Shellfish regulation; leases.--

 6         (7)  SURCHARGE FOR IMPROVEMENT OR REHABILITATION.--A

 7  surcharge of $10 per acre, or any fraction of an acre, per

 8  annum shall be levied upon each lease, other than a perpetual

 9  lease granted pursuant to chapter 370 prior to 1985, and

10  deposited into the General Inspection Trust Fund. The purpose

11  of the surcharge is to provide a mechanism to have financial

12  resources immediately available for improvement of lease areas

13  and for cleanup and rehabilitation of abandoned or vacated

14  lease sites.  The department is authorized to adopt rules

15  necessary to carry out the provisions of this subsection.

16         (a)  Moneys in the fund that are not needed currently

17  for cleanup and rehabilitation of abandoned or vacated lease

18  sites shall be deposited with the Chief Financial Officer

19  Treasurer to the credit of the fund and may be invested in

20  such manner as is provided for by statute. Interest received

21  on such investment shall be credited to the fund.

22  

23  The department shall recover to the use of the fund from the

24  person or persons abandoning or vacating the lease, jointly

25  and severally, all sums owed or expended from the fund.

26         Section 740.  Subsections (9) and (10) of section

27  601.10, Florida Statutes, are amended to read:

28         601.10  Powers of the Department of Citrus.--The

29  Department of Citrus shall have and shall exercise such

30  general and specific powers as are delegated to it by this

31  

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 1  chapter and other statutes of the state, which powers shall

 2  include, but shall not be confined to, the following:

 3         (9)  When, in the opinion of the Department of Citrus,

 4  the tax revenues collected pursuant to this chapter, whether

 5  allocated for research, advertising or promotion, reserve

 6  funds, advertising incentive plans, or other purposes, are not

 7  immediately needed for the purpose for which such funds are

 8  provided, the Chief Financial Officer Treasurer is authorized

 9  and shall, upon the request and approval of the Department of

10  Citrus, or its general manager if she or he has been given

11  such authority, invest and reinvest the funds designated and

12  for the period of time specified in such request.  In the

13  investment of such funds, the Chief Financial Officer

14  Treasurer shall have the powers and be subject to the

15  limitations provided for in s. 17.61 s. 18.125.

16         (10)  Subject to the concurrence of the Chief Financial

17  Officer Treasurer, whenever the department contracts with a

18  foreign entity for performance of services or the purchase of

19  materials, and such contract requires payment in equivalent

20  foreign currency, the department may, for payment of such

21  contract obligation, deposit sufficient state funds in a

22  foreign bank, or purchase foreign currency at the current

23  market rate, up to an amount not in excess of the contract

24  obligation.  All payments from these funds must have prior

25  audit approval from the office of the Chief Financial Officer

26  Comptroller.

27         Section 741.  Paragraph (c) of subsection (8) of

28  section 601.15, Florida Statutes, is amended to read:

29         601.15  Advertising campaign; methods of conducting;

30  excise tax; emergency reserve fund; citrus research.--

31         (8)

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 1         (c)  All obligations, expenses, and costs incurred

 2  under the provisions of this section shall be paid out of the

 3  Citrus Advertising Fund upon warrant of the Chief Financial

 4  Officer Comptroller when vouchers thereof, approved by the

 5  Department of Citrus, are exhibited.

 6         Section 742.  Subsection (6) of section 601.28, Florida

 7  Statutes, is amended to read:

 8         601.28  Inspection fees.--

 9         (6)  When any portion of the revenues deposited to the

10  Citrus Inspection Trust Fund is not immediately needed for the

11  purpose for which such funds are appropriated, the Chief

12  Financial Officer Treasurer shall invest and reinvest such

13  funds, and the earnings thereon shall be deposited to and made

14  a part of the Citrus Inspection Trust Fund.

15         Section 743.  Subsection (2) of section 607.0501,

16  Florida Statutes, is amended to read:

17         607.0501  Registered office and registered agent.--

18         (2)  This section does not apply to corporations which

19  are required by law to designate the Chief Financial Officer

20  Insurance Commissioner and Treasurer as their attorney for the

21  service of process, associations subject to the provisions of

22  chapter 665, and banks and trust companies subject to the

23  provisions of the financial institutions codes.

24         Section 744.  Section 607.14401, Florida Statutes, is

25  amended to read:

26         607.14401  Deposit with Department of Financial

27  Services Banking and Finance.--Assets of a dissolved

28  corporation that should be transferred to a creditor,

29  claimant, or shareholder of the corporation who cannot be

30  found or who is not competent to receive them shall be

31  deposited, within 6 months from the date fixed for the payment

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 1  of the final liquidating distribution, with the Department of

 2  Financial Services Banking and Finance, where such assets

 3  shall be held as abandoned property.  When the creditor,

 4  claimant, or shareholder furnishes satisfactory proof of

 5  entitlement to the amount or assets deposited, the Department

 6  of Financial Services Banking and Finance shall pay the

 7  creditor, claimant, or shareholder or his or her

 8  representative that amount or those assets.

 9         Section 745.  Section 609.05, Florida Statutes, is

10  amended to read:

11         609.05  Qualification with Office of Financial

12  Institutions and Securities Regulation Department of Banking

13  and Finance.--Before any person may offer for sale, barter or

14  sell any unit, share, contract, note, bond, mortgage, oil or

15  mineral lease or other security of an association doing

16  business under what is known as a "declaration of trust" in

17  this state, such person shall procure from the Office of

18  Financial Institutions and Securities Regulation of the

19  Financial Services Commission Department of Banking and

20  Finance a permit to offer for sale and sell such securities,

21  which permit shall be applied for and granted under the same

22  conditions as like permits are applied for and granted to

23  corporations.

24         Section 746.  Subsection (2) of section 617.0501,

25  Florida Statutes, is amended to read:

26         617.0501  Registered office and registered agent.--

27         (2)  This section does not apply to corporations which

28  are required by law to designate the Chief Financial Officer

29  Insurance Commissioner and Treasurer as their attorney for the

30  service of process.

31  

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 1         Section 747.  Section 617.1440, Florida Statutes, is

 2  amended to read:

 3         617.1440  Deposit with Department of Financial Services

 4  Banking and Finance.--Assets of a dissolved corporation that

 5  should be transferred to a creditor, claimant, member of the

 6  corporation, or other person who cannot be found or who is not

 7  competent to receive them shall be deposited, within 6 months

 8  after the date fixed for the payment of the final liquidating

 9  distribution, with the Department of Financial Services

10  Banking and Finance, where such assets shall be held as

11  abandoned property.  When the creditor, claimant, member, or

12  other person furnishes satisfactory proof of entitlement to

13  the amount or assets deposited, the Department of Financial

14  Services Banking and Finance shall pay him or her or his or

15  her representative that amount or those assets.

16         Section 748.  Section 624.01, Florida Statutes, is

17  amended to read:

18         624.01  Short title.--Chapters 624-632, 634, 635, 636,

19  641, 642, 648, and 651 constitute the "Florida Insurance

20  Code."

21         Section 749.  Section 624.05, Florida Statutes, is

22  amended to read:

23         624.05  "Department," "commission," and "office"

24  defined.--As used in the Insurance Code:

25         (1)  "Department" means the Department of Financial

26  Services. The term does not mean the Financial Services

27  Commission or any office of the Financial Services Commission

28  Insurance of this state, unless the context otherwise

29  requires.

30         (2)  "Commission" means the Financial Services

31  Commission.

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 1         (3)  "Office" means the Office of Insurance Regulation

 2  of the Financial Services Commission.

 3         Section 750.  Subsection (2) of section 624.07, Florida

 4  Statutes, is amended to read:

 5         624.07  "Domicile" defined.--Except as provided in s.

 6  631.011, the "domicile" of an insurer means:

 7         (2)  As to other alien insurers authorized to transact

 8  insurance in one or more states, the state designated by the

 9  insurer in writing filed with the office department at the

10  time of admission to this state or within 6 months after the

11  effective date of this code, whichever date is the later, and

12  may be any of the following states:

13         (a)  That in which the insurer was first authorized to

14  transact insurance if the insurer is still so authorized.

15         (b)  That in which is located the insurer's principal

16  place of business in the United States.

17         (c)  That in which is held the larger deposit of

18  trusteed assets of the insurer for the protection of its

19  policyholders and creditors in the United States.

20  

21  If the insurer makes no such designation, its domicile shall

22  be deemed to be that state in which is located its principal

23  place of business in the United States.

24         Section 751.  Subsection (1) of section 624.09, Florida

25  Statutes, is amended to read:

26         624.09  "Authorized," "unauthorized" insurer defined.--

27         (1)  An "authorized" insurer is one duly authorized by

28  a subsisting certificate of authority issued by the office

29  department to transact insurance in this state.

30         Section 752.  Subsection (2) of section 624.11, Florida

31  Statutes, is amended to read:

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 1         624.11  Compliance required.--

 2         (2)  Any risk retention group organized and existing

 3  under the provisions of the Product Liability Risk Retention

 4  Act of 1981 (Pub. L. No. 97-45), which has been licensed as an

 5  insurance company and authorized to engage in the business of

 6  insurance may transact insurance in this state and shall be

 7  subject to the provisions of ss. 624.15, 624.316, 624.418,

 8  624.421, 624.4211, 624.422, 624.509, 626.112, 626.611,

 9  626.621, 626.7315, 626.741, 626.932, 626.938, 626.9541,

10  627.351, and 627.915; part I of chapter 631; and all other

11  applicable provisions of the laws of this state.  Any such

12  group formed in another jurisdiction shall furnish to the

13  office department, upon request, a copy of any financial

14  report submitted by the group in the licensing jurisdiction.

15         Section 753.  Section 624.124, Florida Statutes, is

16  amended to read:

17         624.124  Motor vehicle services; exemption from

18  code.--Any person may, in exchange for fees, dues, charges, or

19  other consideration, provide any of the following services

20  related to the ownership, operation, use, or maintenance of a

21  motor vehicle without being deemed an insurer and without

22  being subject to the provisions of this code:

23         (1)  Towing service.

24         (2)  Procuring from an insurer group coverage for bail

25  and arrest bonds or for accidental death and dismemberment.

26         (3)  Emergency service.

27         (4)  Procuring prepaid legal services, or providing

28  reimbursement for legal services, except that this shall not

29  be deemed to be an exemption from chapter 642.

30         (5)  Offering assistance in locating or recovering

31  stolen or missing motor vehicles.

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 1         (6)  Paying emergency living and transportation

 2  expenses of the owner of a motor vehicle when the motor

 3  vehicle is damaged.

 4  

 5  For purposes of this section, "motor vehicle" has the same

 6  meaning specified by s. 634.011(6) s. 634.011(7).

 7         Section 754.  Subsection (3) of section 624.129,

 8  Florida Statutes, is amended to read:

 9         624.129  Certain location and recovery services;

10  exemption from code.--

11         (3)  The written agreement or enrollment form used by

12  the provider of such services for subscribers in this state

13  shall contain a conspicuous legend to the effect that the

14  services are not regulated by either the department or the

15  office as insurance.

16         Section 755.  Subsections (2) and (5) of section

17  624.155, Florida Statutes, are amended to read:

18         624.155  Civil remedy.--

19         (2)(a)  As a condition precedent to bringing an action

20  under this section, the office department and the insurer must

21  have been given 60 days' written notice of the violation.  If

22  the office department returns a notice for lack of

23  specificity, the 60-day time period shall not begin until a

24  proper notice is filed.

25         (b)  The notice shall be on a form adopted by the

26  commission and provided by the office department and shall

27  state with specificity the following information, and such

28  other information as the commission requires department may

29  require:

30         1.  The statutory provision, including the specific

31  language of the statute, which the insurer allegedly violated.

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 1         2.  The facts and circumstances giving rise to the

 2  violation.

 3         3.  The name of any individual involved in the

 4  violation.

 5         4.  Reference to specific policy language that is

 6  relevant to the violation, if any.  If the person bringing the

 7  civil action is a third party claimant, she or he shall not be

 8  required to reference the specific policy language if the

 9  insurer has not provided a copy of the policy to the third

10  party claimant pursuant to written request.

11         5.  A statement that the notice is given in order to

12  perfect the right to pursue the civil remedy authorized by

13  this section.

14         (c)  Within 20 days of receipt of the notice, the

15  office department may return any notice that does not provide

16  the specific information required by this section, and the

17  office department shall indicate the specific deficiencies

18  contained in the notice. A determination by the office

19  department to return a notice for lack of specificity shall be

20  exempt from the requirements of chapter 120.

21         (d)  No action shall lie if, within 60 days after

22  filing notice, the damages are paid or the circumstances

23  giving rise to the violation are corrected.

24         (e)  The insurer that is the recipient of a notice

25  filed pursuant to this section shall report to the office

26  department on the disposition of the alleged violation.

27         (f)  The applicable statute of limitations for an

28  action under this section shall be tolled for a period of 65

29  days by the mailing of the notice required by this subsection

30  or the mailing of a subsequent notice required by this

31  subsection.

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 1         (5)  This section shall not be construed to authorize a

 2  class action suit against an insurer or a civil action against

 3  the commission, the office, or the department or any of their,

 4  its employees, or the Insurance Commissioner, or to create a

 5  cause of action when a health insurer refuses to pay a claim

 6  for reimbursement on the ground that the charge for a service

 7  was unreasonably high or that the service provided was not

 8  medically necessary.

 9         Section 756.  Section 624.19, Florida Statutes, is

10  amended to read:

11         624.19  Existing forms and filings.--Every form of

12  insurance document and every rate or other filing lawfully in

13  use immediately prior to January 7, 2003 October 1, 1959, may

14  continue to be so used or be effective until the commission or

15  office department otherwise prescribes pursuant to this code.

16         Section 757.  Section 624.302, Florida Statutes, is

17  amended to read:

18         624.302  Offices.--The department shall establish and

19  maintain offices at the State Capitol in Tallahassee, and in

20  such other places throughout the state as it designates may

21  from time to time designate. The Office of Insurance

22  Regulation shall establish and maintain offices in Tallahassee

23  and in such other places throughout the state as it

24  designates.

25         Section 758.  Section 624.303, Florida Statutes, is

26  amended to read:

27         624.303  Seal; certified copies as evidence.--

28         (1)  The department, commission, and office shall each

29  have an official seal by which its respective proceedings are

30  authenticated.

31  

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 1         (2)  All certificates executed by the department or

 2  office, other than licenses of agents, solicitors, or

 3  adjusters or similar licenses or permits, shall bear its

 4  respective seal.

 5         (3)  Any written instrument purporting to be a copy of

 6  any action, proceeding, or finding of fact by the department,

 7  commission, or office or any record of the department,

 8  commission, or office or copy of any document on file in its

 9  office when authenticated under hand of the respective agency

10  head or his or her designee commissioner by the seal shall be

11  accepted by all the courts of this state as prima facie

12  evidence of its contents.

13         Section 759.  Section 624.305, Florida Statutes, is

14  amended to read:

15         624.305  Prohibited interests, rewards.--

16         (1)  No employee of the department, commission, or

17  office, including the members of the commission, but not

18  including employees of the Office of Financial Institutions

19  and Securities Regulation, Insurance Commissioner and

20  Treasurer shall:

21         (a)  Be financially interested, directly or indirectly,

22  in any insurer or insurance agency authorized to transact

23  insurance in this state, or in any insurance transaction

24  except as a policyholder or claimant under a policy; or

25         (b)  Be given or receive any fee, compensation, loan,

26  gift, or other thing of value in addition to the compensation

27  and expense allowance provided by law, for any service

28  rendered or to be rendered in her or his capacity as a

29  department, commission, or office employee.

30         (2)  This section shall not be deemed to prohibit an

31  insurer from making, in the regular course of business, a loan

                                 860

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 1  to any employee of the department, commission, or office, if

 2  such loan is adequately secured by a mortgage upon real estate

 3  or other collateral and qualifies as an eligible investment of

 4  the insurer under part II of chapter 625.

 5         (3)  When there is no conflict of interest, the

 6  department, commission, and office may each employ or retain

 7  from time to time an insurance actuary, accountant, or other

 8  professional person who is independently practicing her or his

 9  profession even though such person is similarly employed or

10  retained by insurers or others.

11         (4)  Any person employed by the department, commission,

12  or office on January 7, 2003, including a member of the

13  commission, who was not subject to this section prior to that

14  date, has until January 1, 2004, to comply with this section.

15         Section 760.  Section 624.307, Florida Statutes, is

16  amended to read:

17         624.307  General powers; duties.--

18         (1)  The department and office shall enforce the

19  provisions of this code and shall execute the duties imposed

20  upon it by this code, within the respective jurisdiction of

21  each, as provided by law.

22         (2)  The department shall have the powers and authority

23  expressly conferred upon it by, or reasonably implied from,

24  the provisions of this code. The office shall have the powers

25  and authority expressly conferred upon it by, or reasonably

26  implied from, the provisions of this code.

27         (3)  The department or office may conduct such

28  investigations of insurance matters, in addition to

29  investigations expressly authorized, as it may deem proper to

30  determine whether any person has violated any provision of

31  this code within its respective regulatory jurisdiction or to

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 1  secure information useful in the lawful administration of any

 2  such provision.  The cost of such investigations shall be

 3  borne by the state.

 4         (4)  The department and office may each collect,

 5  propose, publish, and disseminate information relating to the

 6  subject matter of any duties imposed upon it by law.

 7         (5)  The department and office shall each have such

 8  additional powers and duties as may be provided by other laws

 9  of this state.

10         (6)  The department and office may each employ

11  actuaries who shall be at-will employees and who shall serve

12  at the pleasure of the Chief Financial Officer, in the case of

13  department employees, or at the pleasure of the director of

14  the office, in the case of office employees Insurance

15  Commissioner. Actuaries employed pursuant to this paragraph

16  shall be members of the Society of Actuaries or the Casualty

17  Actuarial Society and shall be exempt from the Career Service

18  System established under chapter 110.  The salaries of the

19  actuaries employed pursuant to this paragraph by the

20  department shall be set in accordance with s. 216.251(2)(a)5.

21  and shall be set at levels which are commensurate with salary

22  levels paid to actuaries by the insurance industry.

23         (7)  The office department shall, within existing

24  resources, develop and implement an outreach program for the

25  purpose of encouraging the entry of additional insurers into

26  the Florida market.

27         Section 761.  Subsection (1) of section 624.308,

28  Florida Statutes, is amended to read:

29         624.308  Rules.--

30         (1)  The department and the commission may each has

31  authority to adopt rules pursuant to ss. 120.536(1) and 120.54

                                 862

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 1  to implement provisions of law conferring duties upon the

 2  department or the commission, respectively it.

 3         Section 762.  Section 624.310, Florida Statutes, is

 4  amended to read:

 5         624.310  Enforcement; cease and desist orders; removal

 6  of certain persons; fines.--

 7         (1)  DEFINITIONS.--For the purposes of this section,

 8  the term:

 9         (a)  "Affiliated party" means any person who directs or

10  participates in the conduct of the affairs of a licensee and

11  who is:

12         1.  A director, officer, employee, trustee, committee

13  member, or controlling stockholder of a licensee or a

14  subsidiary or service corporation of the licensee, other than

15  a controlling stockholder which is a holding company, or an

16  agent of a licensee or a subsidiary or service corporation of

17  the licensee;

18         2.  A person who has filed or is required to file a

19  statement or any other information required to be filed under

20  s. 628.461 or s. 628.4615;

21         3.  A stockholder, other than a stockholder that is a

22  holding company of the licensee, who participates in the

23  conduct of the affairs of the licensee; or

24         4.  An independent contractor who:

25         a.  Renders a written opinion required by the laws of

26  this state under her or his professional credentials on behalf

27  of the licensee, which opinion is reasonably relied on by the

28  department or office in the performance of its duties; or

29         b.  Affirmatively and knowingly conceals facts, through

30  a written misrepresentation to the department or office, with

31  knowledge that such misrepresentation:

                                 863

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 1         (I)  Constitutes a violation of the insurance code or a

 2  lawful rule or order of the department, commission, or office;

 3  and

 4         (II)  Directly and materially endangers the ability of

 5  the licensee to meet its obligations to policyholders.

 6  

 7  For the purposes of this subparagraph, any representation of

 8  fact made by an independent contractor on behalf of a

 9  licensee, affirmatively communicated as a representation of

10  the licensee to the independent contractor, shall not be

11  considered a misrepresentation by the independent contractor

12  to the department.

13         (b)  "Licensee" means a person issued a license or

14  certificate of authority or approval under this code or a

15  person registered under a provision of this code.

16         (2)  ENFORCEMENT GENERALLY.--

17         (a)  The powers granted by this section to the office

18  apply only with respect to licensees of the office and their

19  affiliated parties and to unlicensed persons subject to the

20  regulatory jurisdiction of the office, and the powers granted

21  by this section to the department apply only with respect to

22  licensees of the department and their affiliated parties and

23  to unlicensed persons subject to regulatory jurisdiction of

24  the department.

25         (b)  The department and office each may institute such

26  suits or other legal proceedings as may be required to enforce

27  any provision of this code within the respective regulatory

28  jurisdiction of each.  If it appears that any person has

29  violated any provision of this code for which criminal

30  prosecution is provided, the department or office shall

31  provide the appropriate state attorney or other prosecuting

                                 864

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 1  agency having jurisdiction with respect to such prosecution

 2  with the relevant information in its possession.

 3         (3)  CEASE AND DESIST ORDERS.--

 4         (a)  The department or office may issue and serve a

 5  complaint stating charges upon any licensee or upon any

 6  affiliated party, whenever the department or office has

 7  reasonable cause to believe that the person or individual

 8  named therein is engaging in or has engaged in conduct that

 9  is:

10         1.  An act that demonstrates a lack of fitness or

11  trustworthiness to engage in the business of insurance, is

12  hazardous to the insurance buying public, or constitutes

13  business operations that are a detriment to policyholders,

14  stockholders, investors, creditors, or the public;

15         2.  A violation of any provision of the Florida

16  Insurance Code;

17         3.  A violation of any rule of the department or

18  commission;

19         4.  A violation of any order of the department or

20  office; or

21         5.  A breach of any written agreement with the

22  department or office.

23         (b)  The complaint shall contain a statement of facts

24  and notice of opportunity for a hearing pursuant to ss.

25  120.569 and 120.57.

26         (c)  If no hearing is requested within the time allowed

27  by ss. 120.569 and 120.57, or if a hearing is held and the

28  department or office finds that any of the charges are proven,

29  the department or office may enter an order directing the

30  licensee or the affiliated party named in the complaint to

31  cease and desist from engaging in the conduct complained of

                                 865

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 1  and take corrective action to remedy the effects of past

 2  improper conduct and assure future compliance.

 3         (d)  If the licensee or affiliated party named in the

 4  order fails to respond to the complaint within the time

 5  allotted by ss. 120.569 and 120.57, the failure constitutes a

 6  default and justifies the entry of a cease and desist order.

 7         (e)  A contested or default cease and desist order is

 8  effective when reduced to writing and served upon the licensee

 9  or affiliated party named therein.  An uncontested cease and

10  desist order is effective as agreed.

11         (f)  Whenever the department or office finds that

12  conduct described in paragraph (a) is likely to cause

13  insolvency, substantial dissipation or misvaluation of assets

14  or earnings of the licensee, substantial inability to pay

15  claims on a timely basis, or substantial prejudice to

16  prospective or existing insureds, policyholders, subscribers,

17  or the public, it may issue an emergency cease and desist

18  order requiring the licensee or any affiliated party to

19  immediately cease and desist from engaging in the conduct

20  complained of and to take corrective and remedial action.  The

21  emergency order is effective immediately upon service of a

22  copy of the order upon the licensee or affiliated party named

23  therein and remains effective for 90 days.  If the department

24  or office begins nonemergency cease and desist proceedings

25  under this subsection, the emergency order remains effective

26  until the conclusion of the proceedings under ss. 120.569 and

27  120.57.  Any emergency order entered under this subsection is

28  exempt from s. 119.07(1) and is confidential until it is made

29  permanent unless the department or office finds that the

30  confidentiality will result in substantial risk of financial

31  loss to the public.  All emergency cease and desist orders

                                 866

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 1  that are not made permanent are available for public

 2  inspection 1 year from the date the emergency cease and desist

 3  order expires; however, portions of an emergency cease and

 4  desist order remain confidential and exempt from the

 5  provisions of s. 119.07(1) if disclosure would:

 6         1.  Jeopardize the integrity of another active

 7  investigation;

 8         2.  Impair the safety and financial soundness of the

 9  licensee or affiliated party;

10         3.  Reveal personal financial information;

11         4.  Reveal the identity of a confidential source;

12         5.  Defame or cause unwarranted damage to the good name

13  or reputation of an individual or jeopardize the safety of an

14  individual; or

15         6.  Reveal investigative techniques or procedures.

16         (4)  REMOVAL OF AFFILIATED PARTIES BY THE DEPARTMENT.--

17         (a)  The department or office may issue and serve a

18  complaint stating charges upon any affiliated party and upon

19  the licensee involved, whenever the department or office has

20  reason to believe that an affiliated party is engaging in or

21  has engaged in conduct that constitutes:

22         1.  An act that demonstrates a lack of fitness or

23  trustworthiness to engage in the business of insurance through

24  engaging in illegal activity or mismanagement of business

25  activities;

26         2.  A willful violation of any law relating to the

27  business of insurance; however, if the violation constitutes a

28  misdemeanor, no complaint shall be served as provided in this

29  section until the affiliated party is notified in writing of

30  the matter of the violation and has been afforded a reasonable

31  

                                 867

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 1  period of time, as set forth in the notice, to correct the

 2  violation and has failed to do so;

 3         3.  A violation of any other law involving fraud or

 4  moral turpitude that constitutes a felony;

 5         4.  A willful violation of any rule of the department

 6  or commission;

 7         5.  A willful violation of any order of the department

 8  or office;

 9         6.  A material misrepresentation of fact, made

10  knowingly and willfully or made with reckless disregard for

11  the truth of the matter; or

12         7.  An act of commission or omission or a practice

13  which is a breach of trust or a breach of fiduciary duty.

14         (b)  The complaint shall contain a statement of facts

15  and notice of opportunity for a hearing pursuant to ss.

16  120.569 and 120.57.

17         (c)  If no hearing is requested within the time

18  allotted by ss. 120.569 and 120.57, or if a hearing is held

19  and the department or office finds that any of the charges in

20  the complaint are proven true and that:

21         1.  The licensee has suffered or will likely suffer

22  loss or other damage;

23         2.  The interests of the policyholders, creditors, or

24  public are, or could be, seriously prejudiced by reason of the

25  violation or act or breach of fiduciary duty;

26         3.  The affiliated party has received financial gain by

27  reason of the violation, act, or breach of fiduciary duty; or

28         4.  The violation, act, or breach of fiduciary duty is

29  one involving personal dishonesty on the part of the

30  affiliated party or the conduct jeopardizes or could

31  

                                 868

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 1  reasonably be anticipated to jeopardize the financial

 2  soundness of the licensee,

 3  

 4  The department or office may enter an order removing the

 5  affiliated party or restricting or prohibiting participation

 6  by the person in the affairs of that particular licensee or of

 7  any other licensee.

 8         (d)  If the affiliated party fails to respond to the

 9  complaint within the time allotted by ss. 120.569 and 120.57,

10  the failure constitutes a default and justifies the entry of

11  an order of removal, suspension, or restriction.

12         (e)  A contested or default order of removal,

13  restriction, or prohibition is effective when reduced to

14  writing and served on the licensee and the affiliated party.

15  An uncontested order of removal, restriction, or prohibition

16  is effective as agreed.

17         (f)1.  The chief executive officer, or the person

18  holding the equivalent office, of a licensee shall promptly

19  notify the department or office that issued the license if she

20  or he has actual knowledge that any affiliated party is

21  charged with a felony in a state or federal court.

22         2.  Whenever any affiliated party is charged with a

23  felony in a state or federal court or with the equivalent of a

24  felony in the courts of any foreign country with which the

25  United States maintains diplomatic relations, and the charge

26  alleges violation of any law involving fraud, theft, or moral

27  turpitude, the department or office may enter an emergency

28  order suspending the affiliated party or restricting or

29  prohibiting participation by the affiliated party in the

30  affairs of the particular licensee or of any other licensee

31  upon service of the order upon the licensee and the affiliated

                                 869

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 1  party charged.  The order shall contain notice of opportunity

 2  for a hearing pursuant to ss. 120.569 and 120.57, where the

 3  affiliated party may request a postsuspension hearing to show

 4  that continued service to or participation in the affairs of

 5  the licensee does not pose a threat to the interests of the

 6  licensee's policyholders or creditors and does not threaten to

 7  impair public confidence in the licensee.  In accordance with

 8  applicable departmental rules, the department or office shall

 9  notify the affiliated party whether the order suspending or

10  prohibiting the person from participation in the affairs of a

11  licensee will be rescinded or otherwise modified.  The

12  emergency order remains in effect, unless otherwise modified

13  by the department or office, until the criminal charge is

14  disposed of.  The acquittal of the person charged, or the

15  final, unappealed dismissal of all charges against the person,

16  dissolves the emergency order, but does not prohibit the

17  department or office from instituting proceedings under

18  paragraph (a).  If the person charged is convicted or pleads

19  guilty or nolo contendere, whether or not an adjudication of

20  guilt is entered by the court, the emergency order shall

21  become final.

22         (g)  Any affiliated party removed from office pursuant

23  to this section is not eligible for reelection or appointment

24  to the position or to any other official position in any

25  licensee in this state except upon the written consent of the

26  department or office.  Any affiliated party who is removed,

27  restricted, or prohibited from participation in the affairs of

28  a licensee pursuant to this section may petition the

29  department or office for modification or termination of the

30  removal, restriction, or prohibition.

31  

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 1         (h)  Resignation or termination of an affiliated party

 2  does not affect the department's or office's jurisdiction to

 3  proceed under this subsection.

 4         (5)  ADMINISTRATIVE FINES; ENFORCEMENT.--

 5         (a)  The department or office may, in a proceeding

 6  initiated pursuant to chapter 120, impose an administrative

 7  fine against any person found in the proceeding to have

 8  violated any provision of this code, a cease and desist order

 9  of the department or office, or any written agreement with the

10  department or office. No proceeding shall be initiated and no

11  fine shall accrue until after the person has been notified in

12  writing of the nature of the violation and has been afforded a

13  reasonable period of time, as set forth in the notice, to

14  correct the violation and has failed to do so.

15         (b)  A fine imposed under this subsection may not

16  exceed the amounts specified in s. 624.4211, per violation.

17         (c)  The department or office may, in addition to the

18  imposition of an administrative fine under this subsection,

19  also suspend or revoke the license or certificate of authority

20  of the licensee fined under this subsection.

21         (d)  Any administrative fine levied by the department

22  or office under this subsection may be enforced by the

23  department or office by appropriate proceedings in the circuit

24  court of the county in which the person resides or in which

25  the principal office of a licensee is located, or, in the case

26  of a foreign insurer or person not residing in this state, in

27  Leon County.  In any administrative or judicial proceeding

28  arising under this section, a party may elect to correct the

29  violation asserted by the department or office, and, upon

30  doing so, any fine shall cease to accrue; however, the

31  election to correct the violation does not render any

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 1  administrative or judicial proceeding moot. All fines

 2  collected under this section shall be paid to the Insurance

 3  Commissioner's Regulatory Trust Fund.

 4         (e)  In imposing any administrative penalty or remedy

 5  provided for under this section, the department or office

 6  shall take into account the appropriateness of the penalty

 7  with respect to the size of the financial resources and the

 8  good faith of the person charged, the gravity of the

 9  violation, the history of previous violations, and other

10  matters as justice may require.

11         (f)  The imposition of an administrative fine under

12  this subsection may be in addition to any other penalty or

13  administrative fine authorized under this code.

14         (6)  ADMINISTRATIVE PROCEDURES.--All administrative

15  proceedings under subsections (3), (4), and (5) shall be

16  conducted in accordance with chapter 120.  Any service

17  required or authorized to be made by the department or office

18  under this code shall be made by certified mail, return

19  receipt requested, delivered to the addressee only; by

20  personal delivery; or in accordance with chapter 48.  The

21  service provided for herein shall be effective from the date

22  of delivery.

23         (7)  OTHER LAWS NOT SUPERSEDED.--The provisions of this

24  section are in addition to other provisions of this code, and

25  shall not be construed to curtail, impede, replace, or delete

26  any other similar provision or power of the department or

27  office under the insurance code as defined in s. 624.01 or any

28  power of the department or office which may exist under the

29  common law of this state.  The procedures set forth in s.

30  626.9581 do not apply to regulatory action taken pursuant to

31  the provisions of this section.

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 1         Section 763.  Section 624.3102, Florida Statutes, is

 2  amended to read:

 3         624.3102  Immunity from civil liability for providing

 4  department, commission, or office with information about

 5  condition of insurer.--A person, other than a person filing a

 6  required report or other required information, who provides

 7  the department, commission, or office with information about

 8  the financial condition of an insurer is immune from civil

 9  liability arising out of the provision of the information

10  unless the person acted with knowledge that the information

11  was false or with reckless disregard for the truth or falsity

12  of the information.

13         Section 764.  Section 624.311, Florida Statutes, is

14  amended to read:

15         624.311  Records; reproductions; destruction.--

16         (1)  Except as provided in this section, the

17  department, commission, and office shall each preserve in

18  permanent form records of its proceedings, hearings,

19  investigations, and examinations and shall file such records

20  in its office.

21         (2)  The records of insurance claim negotiations of any

22  state agency or political subdivision are confidential and

23  exempt from s. 119.07(1) until termination of all litigation

24  and settlement of all claims arising out of the same incident.

25         (3)  The department, commission, and office may each

26  photograph, microphotograph, or reproduce on film, whereby

27  each page will be reproduced in exact conformity with the

28  original, all financial records, financial statements of

29  domestic insurers, reports of business transacted in this

30  state by foreign insurers and alien insurers, reports of

31  examination of domestic insurers, and such other records and

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 1  documents on file in its office as it may in its discretion

 2  select.

 3         (4)  To facilitate the efficient use of floor space and

 4  filing equipment in its offices, the department, commission,

 5  and office may each destroy the following records and

 6  documents pursuant to chapter 257:

 7         (a)  General closed correspondence files over 3 years

 8  old;

 9         (b)  Agent, adjuster, and similar license files,

10  including license files of the Division of State Fire Marshal,

11  over 2 years old; except that the department or office shall

12  preserve by reproduction or otherwise a copy of the original

13  records upon the basis of which each such licensee qualified

14  for her or his initial license, except a competency

15  examination, and of any disciplinary proceeding affecting the

16  licensee;

17         (c)  All agent, adjuster, and similar license files and

18  records, including original license qualification records and

19  records of disciplinary proceedings 5 years after a licensee

20  has ceased to be qualified for a license;

21         (d)  Insurer certificate of authority files over 2

22  years old, except that the office department shall preserve by

23  reproduction or otherwise a copy of the initial certificate of

24  authority of each insurer;

25         (e)  All documents and records which have been

26  photographed or otherwise reproduced as provided in subsection

27  (3), if such reproductions have been filed and an audit of the

28  department or office has been completed for the period

29  embracing the dates of such documents and records; and

30         (f)  All other records, documents, and files not

31  expressly provided for in paragraphs (a)-(e).

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 1         Section 765.  Subsections (2) and (3) of section

 2  624.312, Florida Statutes, are amended to read:

 3         624.312  Reproductions and certified copies of records

 4  as evidence.--

 5         (2)  Upon the request of any person and payment of the

 6  applicable fee, the department, commission, or office shall

 7  give a certified copy of any record in its office which is

 8  then subject to public inspection.

 9         (3)  Copies of original records or documents in its

10  office certified by the department, commission, or office

11  shall be received in evidence in all courts as if they were

12  originals.

13         Section 766.  Section 624.313, Florida Statutes, is

14  amended to read:

15         624.313  Publications.--

16         (1)  As early as reasonably possible, the office

17  department shall annually have printed and made available a

18  statistical report which must include all of the following

19  information on either a calendar year or fiscal year basis:

20         (a)  A summary of all information reported to the

21  office department under s. 627.915(1).

22         (b)  The total amount of premiums written and earned by

23  line of insurance.

24         (c)  The total amount of losses paid and losses

25  incurred by line of insurance.

26         (d)  The ratio of premiums written to losses paid by

27  line of insurance.

28         (e)  The ratio of premiums earned to losses incurred by

29  line of insurance.

30         (f)  The market share of the 10 largest insurers or

31  insurer groups by line of insurance and of each insurer or

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 1  insurer group that has a market share of at least 1 percent of

 2  a line of insurance in this state.

 3         (g)  The profitability of each major line of insurance.

 4         (h)  An analysis of the impact of the insurance

 5  industry on the economy of the state.

 6         (i)  A complaint ratio by line of insurance for the

 7  insurers referred to in paragraph (f), based upon information

 8  provided to the office by the department.  The office

 9  department shall determine the most appropriate ratio or

10  ratios for quantifying complaints.

11         (j)  An analysis of such lines or kinds of insurance

12  for which the office department determines that an

13  availability problem exists in this state.

14         (k)  A summary of the findings of market examinations

15  performed by the office department under s. 624.3161 during

16  the preceding year.

17         (l)  Such other information as the office department

18  deems relevant.

19         (2)(a)  The department may prepare and have printed and

20  published in pamphlet or book form the following:

21         1.(a)  As needed, questions and answers for the use of

22  persons applying for an examination for licensing as agents or

23  solicitors for property, casualty, surety, health, and

24  miscellaneous insurers.

25         2.(b)  As needed, questions and answers for the use of

26  persons applying for an examination for licensing as agents

27  for life and health insurers.

28         (b)(c)  The office may prepare and have printed and

29  published in pamphlet or book form, as needed, questions and

30  answers for the use of persons applying for an examination for

31  licensing as adjusters.

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 1         (3)  The department or office shall sell the

 2  publications mentioned in subsections (1) and (2) to

 3  purchasers at a price fixed by the department or office it at

 4  not less than the cost of printing and binding such

 5  publications, plus packaging and postage costs for mailing;

 6  except that the department or office may deliver copies of

 7  such publications free of cost to state agencies and officers;

 8  insurance supervisory authorities of other states and

 9  jurisdictions; institutions of higher learning located in

10  Florida; the Library of Congress; insurance officers of Naval,

11  Military, and Air Force bases located in Florida; and to

12  persons serving as advisers to the department or office in

13  preparation of the publications.

14         (4)  The department or office may contract with outside

15  vendors, in accordance with chapter 287, to compile data in an

16  electronic data processing format that is compatible with the

17  systems of the department or office.

18         Section 767.  Section 624.314, is amended to read:

19         624.314  Publications; Insurance Commissioner's

20  Regulatory Trust Fund.--The department and office shall each

21  deposit all moneys received from the sale of publications

22  under s. 624.313 in the Insurance Commissioner's Regulatory

23  Trust Fund for the purpose of paying costs for the

24  preparation, printing, and delivery to the department of the

25  publications mentioned in s. 624.313(2), packaging and mailing

26  costs, and banking, accounting, and incidental expenses

27  connected with the sale and delivery of such publications by

28  the department.  All moneys so deposited and all funds

29  hereafter transferred to the Insurance Commissioner's

30  Regulatory Trust Fund are appropriated for the uses and

31  purposes above mentioned.

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 1         Section 768.  Section 624.315, Florida Statutes, is

 2  amended to read:

 3         624.315  Department; annual report.--

 4         (1)  As early as reasonably possible, the office, with

 5  such assistance from the department as requested, shall

 6  annually prepare a report to the Speaker and Minority Leader

 7  of the House of Representatives, the President and Minority

 8  Leader of the Senate, the chairs of the legislative committees

 9  with jurisdiction over matters of insurance, and the Governor

10  showing, with respect to the preceding calendar year:

11         (a)  Names of the authorized insurers transacting

12  insurance in this state, with abstracts of their financial

13  statements including assets, liabilities, and net worth.

14         (b)  Names of insurers whose business was closed during

15  the year, the cause thereof, and amounts of assets and

16  liabilities as ascertainable.

17         (c)  Names of insurers against which delinquency or

18  similar proceedings were instituted, and a concise statement

19  of the circumstances and results of each such proceeding.

20         (d)  The receipts and estimated expenses of the office

21  department for the year.

22         (e)  Such other pertinent information and matters as

23  the office department deems to be in the public interest.

24         (f)  Annually after each regular session of the

25  Legislature, a compilation of the laws of this state relating

26  to insurance.  Any such publication may be printed, revised,

27  or reprinted upon the basis of the original low bid.

28         (g)  An analysis and summary report of the state of the

29  insurance industry in this state evaluated as of the end of

30  the most recent calendar year.

31  

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 1         (2)  The office department shall maintain the following

 2  information and make such information available upon request:

 3         (a)  Calendar year profitability, including investment

 4  income from policyholders' unearned premium and loss reserves

 5  (Florida and countrywide).

 6         (b)  Aggregate Florida loss reserves.

 7         (c)  Premiums written (Florida and countrywide).

 8         (d)  Premiums earned (Florida and countrywide).

 9         (e)  Incurred losses (Florida and countrywide).

10         (f)  Paid losses (Florida and countrywide).

11         (g)  Allocated Florida loss adjustment expenses.

12         (h)  Renewal ratio (countrywide).

13         (i)  Variation of premiums charged by the industry as

14  compared to rates promulgated by the Insurance Services Office

15  (Florida and countrywide).

16         (j)  An analysis of policy size limits (Florida and

17  countrywide).

18         (k)  Insureds' selection of claims-made versus

19  occurrence coverage (Florida and countrywide).

20         (l)  A subreport on the involuntary market in Florida

21  encompassing such joint underwriting plans and assigned risk

22  plans operating in the state.

23         (m)  A subreport providing information relevant to

24  emerging markets and alternate marketing mechanisms, such as

25  self-insured trusts, risk retention groups, purchasing groups,

26  and the excess-surplus lines market.

27         (n)  Trends; emerging trends as exemplified by the

28  percentage change in frequency and severity of both paid and

29  incurred claims, and pure premium (Florida and countrywide).

30         (o)  Fast track loss ratios as defined and assimilated

31  by the Insurance Services Office (Florida and countrywide).

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 1         (3)  The office department may contract with outside

 2  vendors, in accordance with chapter 287, to compile data in an

 3  electronic data processing format that is compatible with the

 4  systems of the office department.

 5         Section 769.  Section 624.316, Florida Statutes, is

 6  amended to read:

 7         624.316  Examination of insurers.--

 8         (1)(a)  The office department shall examine the

 9  affairs, transactions, accounts, records, and assets of each

10  authorized insurer and of the attorney in fact of a reciprocal

11  insurer as to its transactions affecting the insurer as often

12  as it deems advisable, except as provided in this section.

13  The examination may include examination of the affairs,

14  transactions, accounts, and records relating directly or

15  indirectly to the insurer and of the assets of the insurer's

16  managing general agents and controlling or controlled person,

17  as defined in s. 625.012. The examination shall be pursuant to

18  a written order of the office department. Such order shall

19  expire upon receipt by the office department of the written

20  report of the examination.

21         (b)  As a part of its examination procedure, the office

22  department shall examine each insurer regarding all of the

23  information required by s. 627.915.

24         (c)  The office department shall examine each insurer

25  according to accounting procedures designed to fulfill the

26  requirements of generally accepted insurance accounting

27  principles and practices and good internal control and in

28  keeping with generally accepted accounting forms, accounts,

29  records, methods, and practices relating to insurers. To

30  facilitate uniformity in examinations, the commission

31  department may adopt, by rule, the Market and Financial

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 1  Conduct Examiners Examination Handbook and the Financial

 2  Condition Examiners Handbook of the National Association of

 3  Insurance Commissioners, 2002 1990, and may adopt subsequent

 4  amendments thereto, if the examination methodology remains

 5  substantially consistent.

 6         (2)(a)  Except as provided in paragraph (f), the office

 7  department may examine each insurer as often as may be

 8  warranted for the protection of the policyholders and in the

 9  public interest, and shall examine each domestic insurer not

10  less frequently than once every 3 years. The examination shall

11  cover the preceding 3 fiscal years of the insurer and shall be

12  commenced within 12 months after the end of the most recent

13  fiscal year being covered by the examination. The examination

14  may cover any period of the insurer's operations since the

15  last previous examination. The examination may include

16  examination of events subsequent to the end of the most recent

17  fiscal year and the events of any prior period that affect the

18  present financial condition of the insurer. In lieu of making

19  its own examination, the office department may accept an

20  independent certified public accountant's audit report

21  prepared on a statutory basis consistent with the Florida

22  Insurance Code on that specific company. The office department

23  may not accept the report in lieu of the requirement imposed

24  by paragraph (1)(b). When an examination is conducted by the

25  office department for the sole purpose of examining the 3

26  preceding fiscal years of the insurer within 12 months after

27  the opinion date of an independent certified public

28  accountant's audit report prepared on a statutory basis on

29  that specific company consistent with the Florida Insurance

30  Code, the cost of the examination as charged to the insurer

31  pursuant to s. 624.320 shall be reduced by the cost to the

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 1  insurer of the independent certified public accountant's audit

 2  reports. Requests for the reduction in cost of examination

 3  must be submitted to the office department in writing no later

 4  than 90 days after the conclusion of the examination and shall

 5  include sufficient documentation to support the charges

 6  incurred for the statutory audit performed by the independent

 7  certified public accountant.

 8         (b)  The office department shall examine each insurer

 9  applying for an initial certificate of authority to transact

10  insurance in this state before granting the initial

11  certificate.

12         (c)  In lieu of making its own examination, the office

13  department may accept a full report of the last recent

14  examination of a foreign insurer, certified to by the

15  insurance supervisory official of another state.

16         (d)  The examination by the office department of an

17  alien insurer shall be limited to the alien insurer's

18  insurance transactions and affairs in the United States,

19  except as otherwise required by the office department.

20         (e)  The commission department shall adopt rules

21  providing that, upon agreement between the office department

22  and the insurer, an examination under this section may be

23  conducted by independent certified public accountants,

24  actuaries meeting criteria specified by rule, and reinsurance

25  specialists meeting criteria specified by rule. The rules

26  shall provide:

27         1.  That the agreement of the insurer is not required

28  if the office department reasonably suspects criminal

29  misconduct on the part of the insurer.

30         2.  That the office department shall provide the

31  insurer with a list of three firms acceptable to the office

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 1  department, and that the insurer shall select the firm to

 2  conduct the examination from the list provided by the office

 3  department.

 4         3.  That the insurer being examined must make payment

 5  for the examination directly to the firm performing the

 6  examination in accordance with the rates and terms agreed to

 7  by the office department, the insurer, and the firm performing

 8  the examination.

 9         4.  That if the examination is conducted without the

10  consent of the insurer, the insurer must pay all reasonable

11  charges of the examining firm if the examination finds

12  impairment, insolvency, or criminal misconduct on the part of

13  the insurer.

14         (f)1.

15         a.  An examination under this section must be conducted

16  at least once every year with respect to a domestic insurer

17  that has continuously held a certificate of authority for less

18  than 3 years. The examination must cover the preceding fiscal

19  year or the period since the last examination of the insurer.

20  The office department may limit the scope of the examination.

21         b.  The office department may not accept an independent

22  certified public accountant's audit report in lieu of an

23  examination required by this subparagraph.

24         c.  An insurer may not be required to pay more than

25  $25,000 to cover the costs of any one examination under this

26  subparagraph.

27         2.  An examination under this section must be conducted

28  not less frequently than once every 5 years with respect to an

29  insurer that has continuously held a certificate of authority,

30  without a change in ownership subject to s. 624.4245 or s.

31  628.461, for more than 15 years. The examination must cover

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 1  the preceding 5 fiscal years of the insurer or the period

 2  since the last examination of the insurer. This subparagraph

 3  does not limit the ability of the office department to conduct

 4  more frequent examinations.

 5         Section 770.  Section 624.3161, Florida Statutes, is

 6  amended to read:

 7         624.3161  Market conduct examinations.--

 8         (1)  As often as it deems necessary, the office

 9  department shall examine each licensed rating organization,

10  each advisory organization, each group, association, carrier,

11  as defined in s. 440.02, or other organization of insurers

12  which engages in joint underwriting or joint reinsurance, and

13  each authorized insurer transacting in this state any class of

14  insurance to which the provisions of chapter 627 are

15  applicable.  The examination shall be for the purpose of

16  ascertaining compliance by the person examined with the

17  applicable provisions of chapters 440, 624, 626, 627, and 635.

18         (2)  In lieu of any such examination, the office

19  department may accept the report of a similar examination made

20  by the insurance supervisory official of another state.

21         (3)  The examination may be conducted by an independent

22  professional examiner under contract to the office department,

23  in which case payment shall be made directly to the contracted

24  examiner by the insurer examined in accordance with the rates

25  and terms agreed to by the office department and the examiner.

26         (4)  The reasonable cost of the examination shall be

27  paid by the person examined, and such person shall be subject,

28  as though an insurer, to the provisions of s. 624.320.

29         (5)  Such examinations shall also be subject to the

30  applicable provisions of chapter 440 and ss. 624.318, 624.319,

31  624.321, and 624.322.

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 1         Section 771.  Section 624.317, Florida Statutes, is

 2  amended to read:

 3         624.317  Investigation of agents, adjusters,

 4  administrators, service companies, and others.--If it has

 5  reason to believe that any person has violated or is violating

 6  any provision of this code, or upon the written complaint

 7  signed by any interested person indicating that any such

 8  violation may exist:,

 9         (1)  The department shall conduct such investigation as

10  it deems necessary of the accounts, records, documents, and

11  transactions pertaining to or affecting the insurance affairs

12  of any:

13         (1)  general agent, surplus line agent, managing

14  general agent, adjuster, administrator, service company, or

15  other person.

16         (2)  insurance agent, customer representative, service

17  representative, or other person subject to its jurisdiction or

18  solicitor, subject to the requirements of s. 626.601.

19         (2)  The office shall conduct such investigation as it

20  deems necessary of the accounts, records, documents, and

21  transactions pertaining to or affecting the insurance affairs

22  of any:

23         (a)  Adjuster, administrator, service company, or other

24  person subject to its jurisdiction.

25         (b)(3)  Person having a contract or power of attorney

26  under which she or he enjoys in fact the exclusive or dominant

27  right to manage or control an insurer.

28         (c)(4)  Person engaged in or proposing to be engaged in

29  the promotion or formation of:

30         1.(a)  A domestic insurer;

31         2.(b)  An insurance holding corporation; or

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 1         3.(c)  A corporation to finance a domestic insurer or

 2  in the production of the domestic insurer's business.

 3         Section 772.  Section 624.318, Florida Statutes, is

 4  amended to read:

 5         624.318  Conduct of examination or investigation;

 6  access to records; correction of accounts; appraisals.--

 7         (1)  The examination or investigation may be conducted

 8  by the accredited examiners or investigators of the department

 9  or office at the offices wherever located of the person being

10  examined or investigated and at such other places as may be

11  required for determination of matters under examination or

12  investigation.  In the case of alien insurers, the examination

13  may be so conducted in the insurer's offices and places in the

14  United States, except as otherwise required by the department

15  or office.

16         (2)  Every person being examined or investigated, and

17  its officers, attorneys, employees, agents, and

18  representatives, shall make freely available to the department

19  or office or its examiners or investigators the accounts,

20  records, documents, files, information, assets, and matters in

21  their possession or control relating to the subject of the

22  examination or investigation. An agent who provides other

23  products or services or maintains customer information not

24  related to insurance must maintain records relating to

25  insurance products and transactions separately if necessary to

26  give the department or office access to such records. If

27  records relating to the insurance transactions are maintained

28  by an agent on premises owned or operated by a third party,

29  the agent and the third party must provide access to the

30  records by the department or office.

31  

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 1         (3)  If the department or office finds any accounts or

 2  records to be inadequate, or inadequately kept or posted, it

 3  may employ experts to reconstruct, rewrite, post, or balance

 4  them at the expense of the person being examined if such

 5  person has failed to maintain, complete, or correct such

 6  records or accounting after the department or office has given

 7  her or him notice and a reasonable opportunity to do so.

 8         (4)  If the office department deems it necessary to

 9  value any asset involved in such an examination of an insurer,

10  it may make written request of the insurer to designate one or

11  more competent appraisers acceptable to the office department,

12  who shall promptly make an appraisal of the asset and furnish

13  a copy thereof to the office department.  If the insurer fails

14  to designate such an appraiser or appraisers within 20 days

15  after the request of the office department, the office

16  department may designate the appraiser or appraisers.  The

17  reasonable expense of any such appraisal shall be a part of

18  the expense of examination, to be borne by the insurer.

19         (5)  Neither the department, the office, nor any

20  examiner shall remove any record, account, document, file, or

21  other  property of the person being examined from the offices

22  of such person except with the written consent of such person

23  given in advance of such removal or pursuant to an order of

24  court duly obtained.

25         (6)  Any individual who willfully obstructs the

26  department, the office, or the or its examiner in the

27  examinations or investigations authorized by this part is

28  guilty of a misdemeanor and upon conviction shall be punished

29  as provided in s. 624.15.

30         Section 773.  Section 624.319, Florida Statutes, is

31  amended to read:

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 1         624.319  Examination and investigation reports.--

 2         (1)  The department or office or its examiner shall

 3  make a full and true written report of each examination. The

 4  examination report shall contain only information obtained

 5  from examination of the records, accounts, files, and

 6  documents of or relative to the insurer examined or from

 7  testimony of individuals under oath, together with relevant

 8  conclusions and recommendations of the examiner based thereon.

 9  The department or office shall furnish a copy of the

10  examination report to the insurer examined not less than 30

11  days prior to filing the examination report in its office.  If

12  such insurer so requests in writing within such 30-day period,

13  the department or office shall grant a hearing with respect to

14  the examination report and shall not so file the examination

15  report until after the hearing and after such modifications

16  have been made therein as the department or office deems

17  proper.

18         (2)  The examination report when so filed shall be

19  admissible in evidence in any action or proceeding brought by

20  the department or office against the person examined, or

21  against its officers, employees, or agents.  In all other

22  proceedings, the admissibility of the examination report is

23  governed by the evidence code.  The department or office or

24  its examiners may at any time testify and offer other proper

25  evidence as to information secured or matters discovered

26  during the course of an examination, whether or not a written

27  report of the examination has been either made, furnished, or

28  filed in the department or office.

29         (3)(a)  Examination reports, until filed, are

30  confidential and exempt from the provisions of s. 119.07(1).

31  Investigation reports are confidential and exempt from the

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 1  provisions of s. 119.07(1) until the investigation is

 2  completed or ceases to be active.  For purposes of this

 3  subsection, an investigation is active while it is being

 4  conducted by the department or office with a reasonable, good

 5  faith belief that it could lead to the filing of

 6  administrative, civil, or criminal proceedings.  An

 7  investigation does not cease to be active if the department or

 8  office is proceeding with reasonable dispatch and has a good

 9  faith belief that action could be initiated by the department

10  or office or other administrative or law enforcement agency.

11  After an investigation is completed or ceases to be active,

12  portions of the investigation report relating to the

13  investigation remain confidential and exempt from the

14  provisions of s. 119.07(1) if disclosure would:

15         1.  Jeopardize the integrity of another active

16  investigation;

17         2.  Impair the safety and financial soundness of the

18  licensee or affiliated party;

19         3.  Reveal personal financial information;

20         4.  Reveal the identity of a confidential source;

21         5.  Defame or cause unwarranted damage to the good name

22  or reputation of an individual or jeopardize the safety of an

23  individual; or

24         6.  Reveal investigative techniques or procedures.

25         (b)  Workpapers and other information held by the

26  department or office, and workpapers and other information

27  received from another governmental entity or the National

28  Association of Insurance Commissioners, for the department's

29  or office's use in the performance of its examination or

30  investigation duties pursuant to this section and ss. 624.316,

31  624.3161, 624.317, and 624.318 are confidential and exempt

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 1  from the provisions of s. 119.07(1) and s. 24(a), Art. I of

 2  the State Constitution.  This exemption applies to workpapers

 3  and other information held by the department or office before,

 4  on, or after the effective date of this exemption. Such

 5  confidential and exempt information may be disclosed to

 6  another governmental entity, if disclosure is necessary for

 7  the receiving entity to perform its duties and

 8  responsibilities, and may be disclosed to the National

 9  Association of Insurance Commissioners.  The receiving

10  governmental entity or the association must maintain the

11  confidential and exempt status of the information.  The

12  information made confidential and exempt by this paragraph may

13  be used in a criminal, civil, or administrative proceeding so

14  long as the confidential and exempt status of such information

15  is maintained.  This paragraph is subject to the Open

16  Government Sunset Review Act of 1995 in accordance with s.

17  119.15 and shall stand repealed on October 2, 2007, unless

18  reviewed and saved from repeal through reenactment by the

19  Legislature.

20         (c)  Lists of insurers or regulated companies are

21  confidential and exempt from the provisions of s. 119.07(1)

22  if:

23         1.  The financial solvency, condition, or soundness of

24  such insurers or regulated companies is being monitored by the

25  office department;

26         2.  The list is prepared to internally coordinate

27  regulation by the office department of the financial solvency,

28  condition, or soundness of the insurers or regulated

29  companies; and

30         3.  The office determines Insurance Commissioner and

31  Treasurer determine that public inspection of such list could

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 1  impair the financial solvency, condition, or soundness of such

 2  insurers or regulated companies.

 3         (4)  After the examination report has been filed

 4  pursuant to subsection (1), the department or office may

 5  publish the results of any such examination in one or more

 6  newspapers published in this state whenever it deems it to be

 7  in the public interest.

 8         (5)  After the examination report of an insurer has

 9  been filed pursuant to subsection (1), an affidavit shall be

10  filed with the office department, not more than 30 days after

11  the report has been filed, on a form furnished by the office

12  department and signed by the officer of the company in charge

13  of the insurer's business in this state, stating that she or

14  he has read the report and that the recommendations made in

15  the report will be considered within a reasonable time.

16         Section 774.  Subsections (1), (2), (3), and (5) of

17  section 624.320, Florida Statutes, are amended to read:

18         624.320  Examination expenses.--

19         (1)  Each insurer so examined shall pay to the office

20  department the expenses of the examination at the rates

21  adopted by the office department.  Such expenses shall include

22  actual travel expenses, reasonable living expense allowance,

23  compensation of the examiner or other person making the

24  examination, and necessary attendant administrative costs of

25  the office department directly related to the examination.

26  Such travel expense and living expense allowance shall be

27  limited to those expenses necessarily incurred on account of

28  the examination and shall be paid by the examined insurer

29  together with compensation upon presentation by the office

30  department to such insurer of a detailed account of such

31  

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 1  charges and expenses after a detailed statement has been filed

 2  by the examiner and approved by the office department.

 3         (2)  All moneys collected from insurers for

 4  examinations shall be deposited into the Insurance

 5  Commissioner's Regulatory Trust Fund, and the office may

 6  department is authorized to make deposits from time to time

 7  into such fund from moneys appropriated for the operation of

 8  the office department.

 9         (3)  Notwithstanding the provisions of s. 112.061, the

10  office may department is authorized to pay to the examiner or

11  person making the examination out of such trust fund the

12  actual travel expenses, reasonable living expense allowance,

13  and compensation in accordance with the statement filed with

14  the office department by the examiner or other person, as

15  provided in subsection (1) upon approval by the office

16  department.

17         (5)  The office may department is authorized to pay to

18  regular insurance examiners, not residents of Leon County,

19  Florida, per diem for periods not exceeding 30 days for each

20  such examiner while at the Office of Insurance Regulation the

21  department in Tallahassee, Florida, for the purpose of

22  auditing insurers' annual statements.  Such expenses shall be

23  paid out of moneys budgeted for such purpose, as for regular

24  employees at rates provided in s. 112.061.

25         Section 775.  Subsections (1) and (2) of section

26  624.321, Florida Statutes, are amended to read:

27         624.321  Witnesses and evidence.--

28         (1)  As to any examination, investigation, or hearing

29  being conducted under this code, a person designated by the

30  department or office, respectively the Insurance Commissioner

31  and Treasurer or her or his designee:

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 1         (a)  May administer oaths, examine and cross-examine

 2  witnesses, receive oral and documentary evidence; and

 3         (b)  Shall have the power to subpoena witnesses, compel

 4  their attendance and testimony, and require by subpoena the

 5  production of books, papers, records, files, correspondence,

 6  documents, or other evidence which is relevant to the inquiry.

 7         (2)  If any person refuses to comply with any such

 8  subpoena or to testify as to any matter concerning which she

 9  or he may be lawfully interrogated, the Circuit Court of Leon

10  County or of the county wherein such examination,

11  investigation, or hearing is being conducted, or of the county

12  wherein such person resides, may, on the application of the

13  department or office, issue an order requiring such person to

14  comply with the subpoena and to testify.

15         Section 776.  Section 624.322, Florida Statutes, is

16  amended to read:

17         624.322  Testimony compelled; immunity from

18  prosecution.--

19         (1)  If any natural person asks to be excused from

20  attending or testifying or from producing any books, papers,

21  records, contracts, documents, or other evidence in connection

22  with any examination, hearing, or investigation being

23  conducted by the department, commission, or office or its

24  examiner, on the ground that the testimony or evidence

25  required of her or him may tend to incriminate the person or

26  subject her or him to a penalty or forfeiture, and shall

27  notwithstanding be directed to give such testimony or produce

28  such evidence, the person must, if so directed by the

29  department, commission, or office and the Department of Legal

30  Affairs, nonetheless comply with such direction; but she or he

31  shall not thereafter be prosecuted or subjected to any penalty

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 1  or forfeiture for or on account of any transaction, matter, or

 2  thing concerning which she or he may have so testified or

 3  produced evidence; and no testimony so given or evidence

 4  produced shall be received against the person upon any

 5  criminal action, investigation, or proceeding.  However, no

 6  such person so testifying shall be exempt from prosecution or

 7  punishment for any perjury committed by her or him in such

 8  testimony, and the testimony or evidence so given or produced

 9  shall be admissible against her or him upon any criminal

10  action, investigation, or proceeding concerning such perjury.

11  No license or permit conferred or to be conferred to such

12  person shall be refused, suspended, or revoked based upon the

13  use of such testimony.

14         (2)  Any such individual may execute, acknowledge, and

15  file with the department, commission, or office, as

16  appropriate, in the office of the Department of Insurance a

17  statement expressly waiving such immunity or privilege in

18  respect to any transaction, matter, or thing specified in such

19  statement; and thereupon the testimony of such individual or

20  such evidence in relation to such transaction, matter, or

21  thing may be received or produced before any judge or justice,

22  court, tribunal, grand jury, or otherwise; and, if so received

23  or produced, such individual shall not be entitled to any

24  immunity or privileges on account of any testimony she or he

25  may so give or evidence so produced.

26         Section 777.  Section 624.324, Florida Statutes, is

27  amended to read:

28         624.324  Hearings.--The department, commission, and

29  office may each hold hearings for any purpose within the scope

30  of this code deemed to be necessary.

31  

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 1         Section 778.  Section 624.33, Florida Statutes, is

 2  amended to read:

 3         624.33  Jurisdiction regarding health or life

 4  coverage.--

 5         (1)  Notwithstanding any other provision of law, and

 6  except as provided in this section, any person or other entity

 7  which in this state provides life insurance coverage;

 8  annuities; or coverage for medical, surgical, chiropractic,

 9  physical therapy, speech-language pathology, audiology,

10  professional mental health, dental, hospital, or optometric

11  expenses, or any other health insurance coverage, whether such

12  coverage is by direct payment, reimbursement, or otherwise,

13  shall, upon request, file with the office Department of

14  Insurance a copy of Internal Revenue Service form 5500 and

15  attached schedules as filed with the Internal Revenue Service

16  and the United States Department of Labor, and an annual

17  summary, as required by the Employee Retirement Income

18  Security Act of 1974, 29 U.S.C. ss. 1001 et seq., as amended.

19         (2)  Any person or entity providing any of the

20  coverages or benefits referred to in subsection (1) which does

21  not meet the filing requirements referred to in subsection

22  (1), or which otherwise fails to demonstrate to the office

23  department that, while providing such services, it is exempt

24  from state law, shall submit to an examination by the office

25  department to determine the organization and solvency of the

26  person or entity and to determine whether or not such entity

27  is in compliance with the applicable provisions of chapters

28  624-651.

29         (3)  A governmental trust which is established or

30  maintained entirely by the state, counties, municipalities, or

31  special taxing districts or any agency or instrumentality

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 1  thereof or any combination thereof exclusively for the benefit

 2  of their employees is exempt from the terms of this section.

 3         (4)  Any licensed agent, administrator, service

 4  company, or other person which, in connection with coverage

 5  offered by an entity subject to examination by the office

 6  department in accordance with subsection (2), is engaged in

 7  this state in the solicitation, negotiation, or effectuation

 8  of any such coverage or the inspection of risks or the setting

 9  of rates, the investigation or adjustment of losses, the

10  collection of premiums, or any other function connected with

11  any such coverage is subject to the jurisdiction of the

12  department or office and to such examination as the department

13  or office deems necessary of the accounts, records, documents,

14  and transactions pertaining to or affecting such coverage to

15  the same extent as the person or entity affording such

16  coverage.

17         (5)  This section does not apply to an insurer, health

18  maintenance organization, professional service plan

19  corporation, or person providing continuing care, which person

20  or entity possesses a valid certificate of authority issued by

21  the office department, except to the extent that such person

22  or entity provides the coverages described in subsection (1)

23  to its employees other than under a policy or contract which

24  is otherwise subject to regulation under the Florida Insurance

25  Code.

26         Section 779.  Subsections (2) and (3) of section

27  624.34, Florida Statutes, are amended to read:

28         624.34  Authority of Department of Law Enforcement to

29  accept fingerprints of, and exchange criminal history records

30  with respect to, certain persons.--

31  

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 1         (2)  The Department of Law Enforcement may accept

 2  fingerprints of individuals who apply for a license as an

 3  agent, customer representative, adjuster, service

 4  representative, or managing general agent or the fingerprints

 5  of the majority owner, sole proprietor, partners, officers,

 6  and directors of a corporation or other legal entity that

 7  applies for licensure with the department or office under the

 8  provisions of the Florida Insurance Code.

 9         (3)  The Department of Law Enforcement may, to the

10  extent provided for by federal law, exchange state,

11  multistate, and federal criminal history records with the

12  department or office for the purpose of the issuance,

13  suspension, or revocation of a certificate of authority or

14  license to operate in this state.

15         Section 780.  Subsections (1) and (2) of section

16  624.401, Florida Statutes, are amended to read:

17         624.401  Certificate of authority required.--

18         (1)  No person shall act as an insurer, and no insurer

19  or its agents, attorneys, subscribers, or representatives

20  shall directly or indirectly transact insurance, in this state

21  except as authorized by a subsisting certificate of authority

22  issued to the insurer by the office department, except as to

23  such transactions as are expressly otherwise provided for in

24  this code.

25         (2)  No insurer shall from offices or by personnel or

26  facilities located in this state solicit insurance

27  applications or otherwise transact insurance in another state

28  or country unless it holds a subsisting certificate of

29  authority issued to it by the office department authorizing it

30  to transact the same kind or kinds of insurance in this state.

31  

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 1         Section 781.  Subsection (8) of section 624.4031,

 2  Florida Statutes, is amended to read:

 3         624.4031  Church benefit plans and church benefit

 4  board.--

 5         (8)  The Florida Insurance Code does not apply to a

 6  church benefits board that has operated more than 5 years in

 7  its state of domicile and has more than $2 million in

 8  reserves.  This exemption extends to the programs, plans,

 9  benefits, activities, or affiliates of the church benefits

10  board.  A church benefits board may qualify for this exemption

11  if an authorized representative of the church benefits board

12  submits to the office department an affidavit stating that the

13  church benefits board meets or exceeds the requirements of

14  this section.  If the office department believes the

15  information provided on the affidavit is inaccurate, the

16  office department has the burden of proving that the church

17  benefits board fails to meet the requirements of this section.

18         Section 782.  Subsections (2), (3), (4), (5), and (7)

19  of section 624.404, Florida Statutes, are amended to read:

20         624.404  General eligibility of insurers for

21  certificate of authority.--To qualify for and hold authority

22  to transact insurance in this state, an insurer must be

23  otherwise in compliance with this code and with its charter

24  powers and must be an incorporated stock insurer, an

25  incorporated mutual insurer, or a reciprocal insurer, of the

26  same general type as may be formed as a domestic insurer under

27  this code; except that:

28         (2)  No foreign or alien insurer or exchange shall be

29  authorized to transact insurance in this state unless it is

30  otherwise qualified therefor under this code and has operated

31  satisfactorily for at least 3 years in its state or country of

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 1  domicile; however, the office department may waive the 3-year

 2  requirement if the foreign or alien insurer or exchange:

 3         (a)  Has operated successfully and has capital and

 4  surplus of $5 million;

 5         (b)  Is the wholly owned subsidiary of an insurer which

 6  is an authorized insurer in this state;

 7         (c)  Is the successor in interest through merger or

 8  consolidation of an authorized insurer; or

 9         (d)  Provides a product or service not readily

10  available to the consumers of this state.

11         (3)(a)  The office department shall not grant or

12  continue authority to transact insurance in this state as to

13  any insurer the management, officers, or directors of which

14  are found by it to be incompetent or untrustworthy; or so

15  lacking in insurance company managerial experience as to make

16  the proposed operation hazardous to the insurance-buying

17  public; or so lacking in insurance experience, ability, and

18  standing as to jeopardize the reasonable promise of successful

19  operation; or which it has good reason to believe are

20  affiliated directly or indirectly through ownership, control,

21  reinsurance transactions, or other insurance or business

22  relations, with any person or persons whose business

23  operations are or have been marked, to the detriment of

24  policyholders or stockholders or investors or creditors or of

25  the public, by manipulation of assets, accounts, or

26  reinsurance or by bad faith.

27         (b)  The office department shall not grant or continue

28  authority to transact insurance in this state as to any

29  insurer if any person, including any subscriber, stockholder,

30  or incorporator, who exercises or has the ability to exercise

31  effective control of the insurer, or who influences or has the

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 1  ability to influence the transaction of the business of the

 2  insurer, does not possess the financial standing and business

 3  experience for the successful operation of the insurer.

 4         (c)  The office department may deny, suspend, or revoke

 5  the authority to transact insurance in this state of any

 6  insurer if any person, including any subscriber, stockholder,

 7  or incorporator, who exercises or has the ability to exercise

 8  effective control of the insurer, or who influences or has the

 9  ability to influence the transaction of the business of the

10  insurer, has been found guilty of, or has pleaded guilty or

11  nolo contendere to, any felony or crime punishable by

12  imprisonment of 1 year or more under the law of the United

13  States or any state thereof or under the law of any other

14  country which involves moral turpitude, without regard to

15  whether a judgment of conviction has been entered by the court

16  having jurisdiction in such case. However, in the case of an

17  insurer operating under a subsisting certificate of authority,

18  the insurer shall remove any such person immediately upon

19  discovery of the conditions set forth in this paragraph when

20  applicable to such person or upon the order of the office

21  department, and the failure to so act by said insurer shall be

22  grounds for revocation or suspension of the insurer's

23  certificate of authority.

24         (d)  The office department may deny, suspend, or revoke

25  the authority of an insurer to transact insurance in this

26  state if any person, including any subscriber, stockholder, or

27  incorporator, who exercises or has the ability to exercise

28  effective control of the insurer, or who influences or has the

29  ability to influence the transaction of the business of the

30  insurer, which person the office department has good reason to

31  believe is now or was in the past affiliated directly or

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 1  indirectly, through ownership interest of 10 percent or more,

 2  control, or reinsurance transactions, with any business,

 3  corporation, or other entity that has been found guilty of or

 4  has pleaded guilty or nolo contendere to any felony or crime

 5  punishable by imprisonment for 1 year or more under the laws

 6  of the United States, any state, or any other country,

 7  regardless of adjudication.  However, in the case of an

 8  insurer operating under a subsisting certificate of authority,

 9  the insurer shall immediately remove such person or

10  immediately notify the office department of such person upon

11  discovery of the conditions set forth in this paragraph,

12  either when applicable to such person or upon order of the

13  office department; the failure to remove such person, provide

14  such notice, or comply with such order constitutes grounds for

15  suspension or revocation of the insurer's certificate of

16  authority.

17         (4)(a)  No authorized insurer shall act as a fronting

18  company for any unauthorized insurer which is not an approved

19  reinsurer.

20         (b)  A "fronting company" is an authorized insurer

21  which by reinsurance or otherwise generally transfers more

22  than 50 percent to one unauthorized insurer which does not

23  meet the requirements of s. 624.610(3)(a), (b), or (c), or

24  more than 75 percent to two or more unauthorized insurers

25  which do not meet the requirements of s. 624.610(3)(a), (b),

26  or (c), of the entire risk of loss on all of the insurance

27  written by it in this state, or on one or more lines of

28  insurance, on all of the business produced through one or more

29  agents or agencies, or on all of the business from a

30  designated geographical territory, without obtaining the prior

31  approval of the office department.

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 1         (c)  The office department may, in its discretion,

 2  approve a transfer of risk in excess of the limits in

 3  paragraph (b) upon presentation of evidence, satisfactory to

 4  the office department, that the transfer would be in the best

 5  interests of the financial condition of the insurer and in the

 6  best interests of the policyholders.

 7         (5)  No insurer shall be authorized to transact

 8  insurance in this state which, during the 3 years immediately

 9  preceding its application for a certificate of authority, has

10  violated any of the insurance laws of this state and after

11  being informed of such violation has failed to correct the

12  same; except that, if all other requirements are met, the

13  office department may nevertheless issue a certificate of

14  authority to such an insurer upon the filing by the insurer of

15  a sworn statement of all such insurance so written in

16  violation of law, and upon payment to the office department of

17  a sum of money as additional filing fee equivalent to all

18  premium taxes and other state taxes and fees as would have

19  been payable by the insurer if such insurance had been

20  lawfully written by an authorized insurer under the laws of

21  this state. This fee, when collected, shall be deposited to

22  the credit of the Insurance Commissioner's Regulatory Trust

23  Fund.

24         (7)  For the purpose of satisfying the requirements of

25  ss. 624.407 and 624.408, the investment portfolio of an

26  insurer applying for an initial certificate of authority to do

27  business in this state shall value its bonds and stocks in

28  accordance with the provisions of the latest edition of the

29  publication "Purposes and Procedures Manual of the NAIC

30  Securities Valuation Office" "Valuations of Securities" by the

31  National Association of Insurance Commissioners, July 1, 2002

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 1  1990, and subsequent amendments thereto, if the valuation

 2  methodology remains substantially unchanged.

 3         Section 783.  Subsection (1) of section 624.4072,

 4  Florida Statutes, is amended to read:

 5         624.4072  Minority-owned property and casualty

 6  insurers; limited exemption for taxation and assessments.--

 7         (1)  A minority business that is at least 51 percent

 8  owned by minority persons, as defined in s. 288.703(3),

 9  initially issued a certificate of authority in this state as

10  an authorized insurer after May 1, 1998, and before January 1,

11  2002, to write property and casualty insurance shall be

12  exempt, for a period not to exceed 10 years from the date of

13  receiving its certificate of authority, from the following

14  taxes and assessments:

15         (a)  Taxes imposed under ss. 175.101, 185.08, and

16  624.509;

17         (b)  Assessments by the Citizens Property Insurance

18  Corporation Florida Residential Property and Casualty Joint

19  Underwriting Association or by the Florida Windstorm

20  Underwriting Association, as provided under s. 627.351, except

21  for emergency assessments collected from policyholders

22  pursuant to s. 627.351(6)(b)3.d. s. 627.351(2)(b)2.d.(III) and

23  (6)(b)3.d. Any such insurer shall be a member insurer of the

24  Citizens Property Insurance Corporation Florida Windstorm

25  Underwriting Association and the Florida Residential Property

26  and Casualty Joint Underwriting Association. The premiums of

27  such insurer shall be included in determining, for the

28  Citizens Property Insurance Corporation Florida Windstorm

29  Underwriting Association, the aggregate statewide direct

30  written premium for property insurance and in determining, for

31  the Florida Residential Property and Casualty Joint

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 1  Underwriting Association, the aggregate statewide direct

 2  written premium for the subject lines of business for all

 3  member insurers.

 4         Section 784.  Section 624.4085, Florida Statutes, is

 5  amended to read:

 6         624.4085  Risk-based capital requirements for

 7  insurers.--

 8         (1)  As used in this section, the term:

 9         (a)  "Adjusted risk-based capital report" means a

10  risk-based capital report that has been adjusted by the office

11  department in accordance with this section.

12         (b)  "Authorized control level risk-based capital"

13  means the number determined under the risk-based capital

14  formula in the risk-based capital instructions.

15         (c)  "Company action level risk-based capital" means

16  the product of 2.0 and an insurer's authorized control level

17  risk-based capital.

18         (d)  "Corrective order" means an order issued by the

19  office department specifying corrective actions that the

20  office department has determined are required.

21         (e)  "Department" means the Department of Insurance.

22         (e)(f)  "Domestic insurer" means any insurer domiciled

23  in this state.

24         (f)(g)  "Foreign insurer" means any insurer that is

25  authorized or eligible to do business in this state but that

26  is not domiciled in this state.

27         (g)(h)  "Life and health insurer" means any insurer

28  authorized or eligible under the Florida Insurance Code to

29  underwrite life or health insurance.  The term includes a

30  property and casualty insurer that writes accident and health

31  insurance only.

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 1         (h)(i)  "Mandatory control level risk-based capital"

 2  means the product of 0.70 and the authorized control level

 3  risk-based capital.

 4         (i)(j)  "Negative trend" means, with respect to a life

 5  and health insurer, a negative trend over a period of time, as

 6  determined in accordance with the trend test calculation

 7  included in the risk-based capital instructions.

 8         (j)(k)  "Property and casualty insurer" means any

 9  insurer licensed under the Florida Insurance Code, but does

10  not include a single-line mortgage guaranty insurer, financial

11  guaranty insurer, or title insurer or a life and health

12  insurer.

13         (k)(l)  "Regulatory action level risk-based capital"

14  means the product of 1.5 and an insurer's authorized control

15  level risk-based capital.

16         (l)(m)  "Revised risk-based capital plan" means the

17  revision of the risk-based capital plan which is prepared by

18  an insurer after the office department rejects the original

19  plan.

20         (m)(n)  "Risk-based capital instructions" means the

21  instructions for preparing a risk-based capital report as

22  adopted by the National Association of Insurance

23  Commissioners.

24         (n)(o)  "Risk-based capital level" means an insurer's

25  company action level risk-based capital, regulatory action

26  level risk-based capital, authorized control level risk-based

27  capital, or mandatory control level risk-based capital.

28         (o)(p)  "Risk-based capital plan" means a comprehensive

29  financial plan specified in paragraph (4)(b).

30         (p)(q)  "Risk-based capital report" means the report

31  required in subsection (2).

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 1         (q)(r)  "Total adjusted capital" means the sum of:

 2         1.  An insurer's statutory capital and surplus; and

 3         2.  Any other item required by the risk-based capital

 4  instructions.

 5         (2)(a)  Each domestic insurer that is subject to this

 6  section shall, on or before March 1 of each year, prepare and

 7  file with the National Association of Insurance Commissioners

 8  a report of its risk-based capital levels as of the end of the

 9  calendar year just ended, in a form and containing the

10  information required in the risk-based capital instructions.

11  In addition, each domestic insurer shall file a printed copy

12  of its risk-based capital report:

13         1.  With the office department on or before March 1 of

14  each year.

15         2.  With the insurance department in any other state in

16  which the insurer is authorized to do business, if that

17  department has notified the insurer of its request in writing,

18  in which case the insurer shall file its risk-based capital

19  report not later than the later of:

20         a.  Fifteen days after the receipt of notice to file

21  its risk-based capital report with that state; or

22         b.  March 1.

23         (b)  The comparison of an insurer's total adjusted

24  capital to any of its risk-based capital levels is a

25  regulatory tool that may indicate the need for possible

26  corrective action with respect to the insurer, and may not be

27  used as a means to rank insurers generally. Therefore, except

28  as otherwise required under this section, the making,

29  publishing, disseminating, circulating, or placing before the

30  public, or causing, directly or indirectly, to be made,

31  published, disseminated, circulated, or placed before the

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 1  public, in a newspaper, magazine, or other publication, or in

 2  the form of a notice, circular, pamphlet, letter, or poster,

 3  or over any radio or television station, or in any other way,

 4  an advertisement, announcement, or statement containing an

 5  assertion, representation, or statement with regard to the

 6  risk-based capital levels of any insurer, or of any component

 7  derived in the calculation, by any insurer, agent, broker, or

 8  other person engaged in any manner in the insurance business

 9  would be misleading and is therefore prohibited; however, if

10  any materially false statement with respect to the comparison

11  regarding an insurer's total adjusted capital to its

12  risk-based capital levels (or any of them) or an inappropriate

13  comparison of any other amount to the insurer's risk-based

14  capital levels is published in any written publication and the

15  insurer is able to demonstrate to the office commissioner with

16  substantial proof the falsity or inappropriateness of the

17  statement, the insurer may publish in a written publication an

18  announcement the sole purpose of which is to rebut the

19  materially false statement.

20         (c)  The office department shall use the risk-based

21  capital instructions, risk-based capital reports, adjusted

22  risk-based capital reports, risk-based capital plans, and

23  revised risk-based capital plans solely for monitoring the

24  solvency of insurers and assessing the need for corrective

25  action with respect to insurers. The office department may not

26  use that information for ratemaking, as evidence in any rate

27  proceeding, or for calculating or deriving any elements of an

28  appropriate premium level or rate of return for any line of

29  insurance which an insurer or an affiliate of such insurer is

30  authorized to write.

31  

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 1         (d)  A life and health insurer's risk-based capital is

 2  determined in accordance with the formula set forth in the

 3  risk-based capital instructions. The formula takes into

 4  account and may adjust for the covariance between:

 5         1.  The risk with respect to the insurer's assets;

 6         2.  The risk of adverse insurance experience with

 7  respect to the insurer's liabilities and obligations;

 8         3.  The interest rate risk with respect to the

 9  insurer's business; and

10         4.  Any other business or other relevant risk set out

11  in the risk-based capital instructions,

12  

13  determined in each case by applying the factors in the manner

14  set forth in the risk-based capital instructions.

15         (e)  A property and casualty insurer's risk-based

16  capital is determined in accordance with the formula set forth

17  in the risk-based capital instructions. The formula takes into

18  account and may adjust for the covariance between:

19         1.  The asset risk;

20         2.  The credit risk;

21         3.  The underwriting risk; and

22         4.  Any other business or other relevant risk set out

23  in the risk-based capital instructions,

24  

25  determined in each case by applying the factors in the manner

26  set forth in the risk-based capital instructions.

27         (f)  The Legislature finds that an excess of capital

28  over the amount produced by the risk-based capital

29  requirements and the formulas, schedules, and instructions

30  specified in this section is a desirable goal with respect to

31  the business of insurance. Accordingly, insurers should seek

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 1  to maintain capital above the risk-based capital levels

 2  required by this section. Additional capital is used and

 3  useful in the insurance business and helps to secure an

 4  insurer against various risks inherent in, or affecting, the

 5  business of insurance and not accounted for or only partially

 6  measured by the risk-based capital requirements contained in

 7  this section.

 8         (g)  If a domestic insurer files a risk-based capital

 9  report that the office department finds is inaccurate, the

10  office department shall adjust the risk-based capital report

11  to correct the inaccuracy and shall notify the insurer of the

12  adjustment. The notice must state the reason for the

13  adjustment.  A risk-based capital report that is so adjusted

14  is referred to as the adjusted risk-based capital report. The

15  adjusted risk-based capital report must also be filed by the

16  insurer with the National Association of Insurance

17  Commissioners.

18         (3)(a)  A company action level event includes:

19         1.  The filing of a risk-based capital report by an

20  insurer which indicates that:

21         a.  The insurer's total adjusted capital is greater

22  than or equal to its regulatory action level risk-based

23  capital but less than its company action level risk-based

24  capital; or

25         b.  If a life and health insurer, the insurer has total

26  adjusted capital that is greater than or equal to its company

27  action level risk-based capital, but is less than the product

28  of its authorized control level risk-based capital and 2.5,

29  and has a negative trend;

30         2.  The notification by the office department to the

31  insurer of an adjusted risk-based capital report that

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 1  indicates an event in subparagraph 1., unless the insurer

 2  challenges the adjusted risk-based capital report under

 3  subsection (7); or

 4         3.  If, under subsection (7), an insurer challenges an

 5  adjusted risk-based capital report that indicates an event in

 6  subparagraph 1., the notification by the office department to

 7  the insurer that the office department has, after a hearing,

 8  rejected the insurer's challenge.

 9         (b)  If a company action level event occurs, the

10  insurer shall prepare and submit to the office department a

11  risk-based capital plan, which must:

12         1.  Identify the conditions that contribute to the

13  company action level event;

14         2.  Contain proposals of corrective actions that the

15  insurer intends to take and that are reasonably expected to

16  result in the elimination of the company action level event;

17         3.  Provide projections of the insurer's financial

18  results in the current year and at least the 4 succeeding

19  years, both in the absence of proposed corrective actions and

20  giving effect to the proposed corrective actions, including

21  projections of statutory operating income, net income,

22  capital, and surplus. The projections for both new and renewal

23  business may include separate projections for each major line

24  of business and, if separate projections are provided, must

25  separately identify each significant income, expense, and

26  benefit component;

27         4.  Identify the key assumptions affecting the

28  insurer's projections and the sensitivity of the projections

29  to the assumptions; and

30         5.  Identify the quality of, and problems associated

31  with, the insurer's business, including, but not limited to,

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 1  its assets, anticipated business growth and associated surplus

 2  strain, extraordinary exposure to risk, mix of business, and

 3  any use of reinsurance.

 4         (c)  The risk-based capital plan must be submitted:

 5         1.  Within 45 days after the company action level

 6  event; or

 7         2.  If the insurer challenges an adjusted risk-based

 8  capital report under subsection (7), within 45 days after

 9  notification to the insurer that the office department has,

10  after a hearing, rejected the insurer's challenge.

11         (d)  Within 60 days after the submission by an insurer

12  of a risk-based capital plan to the office department, the

13  office department shall notify the insurer whether the

14  risk-based capital plan must be implemented or is, in the

15  judgment of the office department, unsatisfactory. If the

16  office department determines that the risk-based capital plan

17  is unsatisfactory, the notification to the insurer must set

18  forth the reasons for the determination and may set forth

19  proposed revisions. Upon notification from the office

20  department, the insurer shall prepare a revised risk-based

21  capital plan, which may incorporate by reference any revisions

22  proposed by the office department, and shall submit the

23  revised risk-based capital plan to the office department:

24         1.  Within 45 days after the notification from the

25  office department; or

26         2.  If the insurer challenges the notification from the

27  office department under subsection (7), within 45 days after a

28  notification to the insurer that the office department has,

29  after a hearing, rejected the insurer's challenge.

30         (e)  If the office department notifies an insurer that

31  the insurer's risk-based capital plan or revised risk-based

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 1  capital plan is unsatisfactory, the office department may, at

 2  its discretion and subject to the insurer's right to a hearing

 3  under subsection (7), specify in the notification that the

 4  notification is a regulatory action level event.

 5         (f)  Each domestic insurer that files a risk-based

 6  capital plan or a revised risk-based capital plan with the

 7  office department shall file a copy of the risk-based capital

 8  plan or the revised risk-based capital plan with the insurance

 9  department in any other state in which the insurer is

10  authorized to do business if:

11         1.  That state has a risk-based capital law that is

12  substantially similar to paragraph (8)(a); and

13         2.  The insurance department of that state has notified

14  the insurer of its request for the filing in writing, in which

15  case the insurer shall file a copy of the risk-based capital

16  plan or the revised risk-based capital plan in that state no

17  later than the later of:

18         a.  Fifteen days after the receipt of notice to file a

19  copy of its risk-based capital plan or revised risk-based

20  capital plan with the state; or

21         b.  The date on which the risk-based capital plan or

22  the revised risk-based capital plan is filed under paragraph

23  (c) or paragraph (d).

24         (4)(a)  A regulatory action level event includes:

25         1.  The filing of a risk-based capital report by the

26  insurer which indicates that the insurer's total adjusted

27  capital is greater than or equal to its authorized control

28  level risk-based capital but is less than its regulatory

29  action level risk-based capital;

30         2.  The notification by the office department to the

31  insurer of an adjusted risk-based capital report that

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 1  indicates the event described in subparagraph 1., unless the

 2  insurer challenges the adjusted risk-based capital report

 3  under subsection (7);

 4         3.  If, under subsection (7), the insurer challenges an

 5  adjusted risk-based capital report that indicates the event

 6  described in subparagraph 1., the notification by the office

 7  department to the insurer that the office department has,

 8  after a hearing, rejected the insurer's challenge;

 9         4.  The failure of the insurer to file a risk-based

10  capital report by the filing date, unless the insurer provides

11  an explanation for such failure which is satisfactory to the

12  office department and cures the failure within 10 days after

13  the filing date;

14         5.  The failure of the insurer to submit a risk-based

15  capital plan to the office department within the time period

16  set forth in paragraph (3)(c);

17         6.  Notification by the office department to the

18  insurer that:

19         a.  The risk-based capital plan or the revised

20  risk-based capital plan submitted by the insurer is, in the

21  judgment of the office department, unsatisfactory; and

22         b.  This notification constitutes a regulatory action

23  level event with respect to the insurer, unless the insurer

24  challenges the determination under subsection (7);

25         7.  If, under subsection (7), the insurer challenges a

26  determination by the office department under subparagraph 6.,

27  the notification by the office department to the insurer that

28  the office department has, after a hearing, rejected the

29  challenge;

30         8.  Notification by the office department to the

31  insurer that the insurer has failed to adhere to its

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 1  risk-based capital plan or revised risk-based capital plan,

 2  but only if this failure has a substantial adverse effect on

 3  the ability of the insurer to eliminate the company action

 4  level event in accordance with its risk-based capital plan or

 5  revised risk-based capital plan and the office department has

 6  so stated in the notification, unless the insurer challenges

 7  the determination under subsection (7); or

 8         9.  If, under subsection (7), the insurer challenges a

 9  determination by the office department under subparagraph 8.,

10  the notification by the office department to the insurer that

11  the office department has, after a hearing, rejected the

12  challenge.

13         (b)  If a regulatory action level event occurs, the

14  office department shall:

15         1.  Require the insurer to prepare and submit a

16  risk-based capital plan or, if applicable, a revised

17  risk-based capital plan;

18         2.  Perform an examination pursuant to s. 624.316 or an

19  analysis, as the office department considers necessary, of the

20  assets, liabilities, and operations of the insurer, including

21  a review of the risk-based capital plan or the revised

22  risk-based capital plan; and

23         3.  After the examination or analysis, issue a

24  corrective order specifying such corrective actions as the

25  office department determines are required.

26         (c)  In determining corrective actions, the office

27  department shall consider any factor relevant to the insurer

28  based upon the office's department's examination or analysis

29  of the assets, liabilities, and operations of the insurer,

30  including, but not limited to, the results of any sensitivity

31  tests undertaken as provided in the risk-based capital

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 1  instructions. The risk-based capital plan or the revised

 2  risk-based capital plan must be submitted:

 3         1.  Within 45 days after the occurrence of the

 4  regulatory action level event;

 5         2.  If the insurer challenges an adjusted risk-based

 6  capital report under subsection (7), within 45 days after the

 7  notification to the insurer that the office department has,

 8  after a hearing, rejected the insurer's challenge; or

 9         3.  If the insurer challenges a revised risk-based

10  capital plan under subsection (7), within 45 days after the

11  notification to the insurer that the office department has,

12  after a hearing, rejected the insurer's challenge.

13         (d)  The office department may retain actuaries,

14  investment experts, and other consultants to review an

15  insurer's risk-based capital plan or revised risk-based

16  capital plan, examine or analyze the assets, liabilities, and

17  operations of an insurer, and formulate the corrective order

18  with respect to the insurer. The fees, costs, and expenses

19  relating to consultants must be borne by the affected insurer

20  or by any other party as directed by the office department.

21         (5)(a)  An authorized control level event includes:

22         1.  The filing of a risk-based capital report by the

23  insurer which indicates that the insurer's total adjusted

24  capital is greater than or equal to its mandatory control

25  level risk-based capital but is less than its authorized

26  control level risk-based capital;

27         2.  The notification by the office department to the

28  insurer of an adjusted risk-based capital report that

29  indicates the event in subparagraph 1., unless the insurer

30  challenges the adjusted risk-based capital report under

31  subsection (7);

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 1         3.  If, under subsection (7), the insurer challenges an

 2  adjusted risk-based capital report that indicates the event in

 3  subparagraph 1., notification by the office department to the

 4  insurer that the office department has, after a hearing,

 5  rejected the insurer's challenge;

 6         4.  The failure of the insurer to respond, in a manner

 7  satisfactory to the office department, to a corrective order,

 8  unless the insurer challenges the corrective order under

 9  subsection (7); or

10         5.  If the insurer challenges a corrective order under

11  subsection (7) and the office department has, after a hearing,

12  rejected the challenge or modified the corrective order, the

13  failure of the insurer to respond, in a manner satisfactory to

14  the office department, to the corrective order after rejection

15  or modification by the office department.

16         (b)  If an authorized control level event occurs, the

17  office department shall:

18         1.  Take any action required under subsection (4)

19  regarding the insurer with respect to which a regulatory

20  action level event has occurred; or

21         2.  If the office department considers it to be in the

22  best interests of the policyholders and creditors of the

23  insurer and of the public, take any action as necessary to

24  cause the insurer to be placed under regulatory control under

25  chapter 631.  An authorized control level event is sufficient

26  ground for the department to be appointed as receiver as

27  provided in chapter 631.

28         (6)(a)  A mandatory control level event includes:

29         1.  The filing of a risk-based capital report that

30  indicates that the insurer's total adjusted capital is less

31  than its mandatory control level risk-based capital;

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 1         2.  Notification by the office department to the

 2  insurer of an adjusted risk-based capital report that

 3  indicates the event in subparagraph 1., unless the insurer

 4  challenges the adjusted risk-based capital report under

 5  subsection (7); or

 6         3.  If, under subsection (7), the insurer challenges an

 7  adjusted risk-based capital report that indicates the event in

 8  subparagraph 1., notification by the office department to the

 9  insurer that the office department has, after a hearing,

10  rejected the insurer's challenge.

11         (b)  If a mandatory control level event occurs:

12         1.  With respect to a life and health insurer, the

13  office department shall, after due consideration of s.

14  624.408, take any action necessary to place the insurer under

15  regulatory control, including any remedy available under

16  chapter 631.  A mandatory control level event is sufficient

17  ground for the department to be appointed as receiver as

18  provided in chapter 631.  The office department may forego

19  taking action for up to 90 days after the mandatory control

20  level event if the office department finds there is a

21  reasonable expectation that the mandatory control level event

22  may be eliminated within the 90-day period.

23         2.  With respect to a property and casualty insurer,

24  the office department shall, after due consideration of s.

25  624.408, take any action necessary to place the insurer under

26  regulatory control, including any remedy available under

27  chapter 631, or, in the case of an insurer that is not writing

28  new business, may allow the insurer to continue to operate

29  under the supervision of the office department. In either

30  case, the mandatory control level event is sufficient ground

31  for the department to be appointed as receiver as provided in

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 1  chapter 631. The office department may forego taking action

 2  for up to 90 days after the mandatory control level event if

 3  the office department finds there is a reasonable expectation

 4  that the mandatory control level event will be eliminated

 5  within the 90-day period.

 6         (7)(a)  An insurer has a right to a hearing before the

 7  office department upon:

 8         1.  Notification to an insurer by the office department

 9  of an adjusted risk-based capital report;

10         2.  Notification to an insurer by the office department

11  that the insurer's risk-based capital plan or revised

12  risk-based capital plan is unsatisfactory, and that the

13  notification constitutes a regulatory action level event with

14  respect to such insurer;

15         3.  Notification to any insurer by the office

16  department that the insurer has failed to adhere to its

17  risk-based capital plan or revised risk-based capital plan and

18  that the failure has a substantial adverse effect on the

19  ability of the insurer to eliminate the company action level

20  event in accordance with its risk-based capital plan or its

21  revised risk-based capital plan; or

22         4.  Notification to an insurer by the office department

23  of a corrective order with respect to the insurer.

24         (b)  At such hearing the insurer may challenge any

25  determination or action by the office department. The insurer

26  shall notify the office department of its request for a

27  hearing within 5 days after receipt of the notification by the

28  office department under this subsection. Upon receipt of the

29  request for a hearing, the office department shall set a date

30  for the hearing, which date must be no fewer than 10 nor more

31  than 30 days after the date the office department receives the

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 1  insurer's request. The hearing must be conducted as provided

 2  in s. 624.324, with the right to appellate review under s.

 3  120.68.

 4         (8)(a)  Any foreign insurer shall, upon the written

 5  request of the office department, submit to the office

 6  department a risk-based capital report, as of the end of the

 7  calendar year just ended, no later than the later of:

 8         1.  The date a risk-based capital report is required to

 9  be filed by a domestic insurer under this section; or

10         2.  Fifteen days after the request is received by the

11  foreign insurer.

12         (b)  Any foreign insurer shall, upon the written

13  request of the office department, promptly submit to the

14  office department a copy of any risk-based capital plan that

15  is filed with the insurance department of another state.

16         (c)  The office department may require a foreign

17  insurer to file a risk-based capital plan if:

18         1.  A company action level event, regulatory action

19  level event, or authorized control level event occurs with

20  respect to any foreign insurer as determined under the

21  risk-based capital law of the state of domicile of the

22  insurer, or, if there is no risk-based capital law in that

23  state, under this section.

24         2.  The insurance department of the state of domicile

25  of the foreign insurer fails to require the foreign insurer to

26  file a risk-based capital plan in the manner specified under

27  the risk-based capital law of that state, or, if there is no

28  risk-based capital law in that state, under subsection (3).

29  

30  The failure of the foreign insurer to file a risk-based

31  capital plan with the office department when required under

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 1  this paragraph is a ground for the office department to take

 2  any action under s. 624.418 which it determines is necessary.

 3         (d)  If a mandatory control level event occurs with

 4  respect to any foreign insurer and a domiciliary receiver has

 5  not been appointed with respect to the foreign insurer under

 6  the rehabilitation and liquidation law of the state of

 7  domicile of the foreign insurer, the office department may

 8  apply to the Circuit Court of Leon County and such event

 9  constitutes grounds for the department to be appointed as

10  receiver as provided in chapter 631 with respect to the

11  liquidation of property of foreign insurers found in this

12  state. The occurrence of a mandatory control level event is a

13  ground for such application.

14         (9)  There shall be no liability on the part of, and no

15  cause of action shall arise against, the commission,

16  commissioner, the department, or office, or their its

17  employees or agents, for any action taken by them in the

18  performance of their powers and duties under this section.

19         (10)  The office department shall transmit any notice

20  that may result in regulatory action by registered mail,

21  certified mail, or any other method of transmission.  Notice

22  is effective when the insurer receives it.

23         (11)  For the purposes of the risk-based capital

24  reports required to be filed by life and health insurers with

25  respect to their 1997 annual statement data and the risk-based

26  capital reports required to be filed by property and casualty

27  insurers with respect to their 1997 annual statement data, the

28  following requirements apply in lieu of the provisions of

29  subsections (3), (4), (5), and (6):

30  

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 1         (a)  If a company action level event occurs with

 2  respect to a domestic insurer, the department may not take any

 3  regulatory action.

 4         (b)  If a regulatory action level event occurs under

 5  subparagraph (4)(a)1., 2., or 3., the department shall take

 6  the actions required under subsection (3).

 7         (c)  If a regulatory action level event occurs under

 8  subparagraph (4)(a)4., 5., 6., 7., 8., or 9., or an authorized

 9  control level event occurs, the department shall take the

10  actions required under subsection (4).

11         (d)  If a mandatory control level event occurs with

12  respect to an insurer, the department shall take the actions

13  required under subsection (5).

14         (11)(12)  This section is supplemental to the other

15  laws of this state and does not preclude or limit any power or

16  duty of the department or office under those laws or under the

17  rules adopted under those laws.

18         (12)(13)  This section does not apply to a domestic

19  property and casualty insurer that meets all of the following

20  conditions:

21         (a)  Writes direct business only in this state;

22         (b)  Writes direct annual premiums of $2 million or

23  less; and

24         (c)  Assumes no reinsurance in excess of 5 percent of

25  direct premiums written.

26         (13)(14)  The commission department may adopt rules to

27  administer this section, including, but not limited to, those

28  regarding risk-based capital reports, adjusted risk-based

29  capital reports, risk-based capital plans, corrective orders

30  and procedures to be followed in the event of a triggering of

31  a company action level event, a regulatory action level event,

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 1  an authorized control level event, or a mandatory control

 2  level event.

 3         Section 785.  Subsections (1) and (2) of section

 4  624.40851, Florida Statutes, are amended to read:

 5         624.40851  Confidentiality of risk-based capital

 6  information.--

 7         (1)  The initial risk-based capital report and any

 8  adjusted risk-based capital report; any risk-based capital

 9  plan and any revised risk-based capital plan; and working

10  papers and reports of examination or analysis of an insurer

11  performed pursuant to a plan or corrective order, or

12  regulatory action level event, with respect to any domestic

13  insurer or foreign insurer, held by the office Department of

14  Insurance, and transcripts of hearings made as required by

15  this section, are confidential and exempt from s. 119.07(1)

16  and s. 24(a), Art. I of the State Constitution.

17         (2)  Hearings conducted pursuant to s. 624.4085

18  relating to the office's department's actions regarding any

19  insurer's risk-based capital plan, revised risk-based capital

20  plan, risk-based capital report, or adjusted risk-based

21  capital report, are exempt from s. 286.011 and s. 24(b), Art.

22  I of the State Constitution, except as otherwise provided in

23  this section. Such hearings shall be recorded by a court

24  reporter. The office Department of Insurance shall open such

25  hearings or provide a copy of the transcript of such hearings

26  or information otherwise made confidential and exempt pursuant

27  to this section to a department, agency, or instrumentality of

28  this or another state or of the United States if the office

29  department determines the disclosure is necessary or proper

30  for the enforcement of the laws of the United States or of

31  this or another state.

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 1         Section 786.  Section 624.4094, Florida Statutes, is

 2  amended to read:

 3         624.4094  Bail bond premiums.--

 4         (1)  The Legislature finds that a significant portion

 5  of bail bond premiums is retained by the licensed bail bond

 6  agents or licensed managing general agents. For purposes of

 7  reporting in financial statements required to be filed with

 8  the office department pursuant to s. 624.424, direct written

 9  premiums for bail bonds by a domestic insurer in this state

10  shall be reported net of any amounts retained by licensed bail

11  bond agents or licensed managing general agents. However, in

12  no case shall the direct written premiums for bail bonds be

13  less than 6.5 percent of the total consideration received by

14  the agent for all bail bonds written by the agent. This

15  subsection also applies to any determination of compliance

16  with s. 624.4095.

17         (2)  Premiums assumed by a domestic insurer shall be

18  reported consistent with subsections (1) and (4) for purposes

19  of filing financial statements with the office department.

20         (3)  Each domestic bail bond insurer shall keep

21  complete and accurate records of the total consideration paid

22  for all bail bonds written by such insurer.

23         (4)  Each domestic bail bond insurer shall disclose the

24  following information in the notes to the financial statement

25  in the insurer's annual statement filed with the office

26  department.

27         (a)  The gross bail bond premiums written in each state

28  by agents for the company.

29         (b)  The amount of premium taxes incurred by the

30  company in each state.

31  

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 1         (c)  Total consideration withheld by agents and not

 2  reported as an expense by the insurer in financial statements

 3  filed with the office department.

 4         (d)  The amount of bail bond premium included on the

 5  surety line of the annual statement filed with the office

 6  department.

 7         (5)  This section does not affect the reporting or

 8  payment of insurance premium taxes under ss. 624.509,

 9  624.5091, and 624.5092, and the insurance premium tax and

10  related excise taxes shall continue to be calculated using

11  gross bail bond premiums.

12         Section 787.  Subsection (1) of section 624.4095,

13  Florida Statutes, is amended to read:

14         624.4095  Premiums written; restrictions.--

15         (1)  Whenever an insurer's ratio of actual or projected

16  annual written premiums as adjusted in accordance with

17  subsection (4) to current or projected surplus as to

18  policyholders as adjusted in accordance with subsection (6)

19  (5) exceeds 10 to 1 for gross written premiums or exceeds 4 to

20  1 for net written premiums, the office department shall

21  suspend the insurer's certificate of authority or establish by

22  order maximum gross or net annual premiums to be written by

23  the insurer consistent with maintaining the ratios specified

24  herein unless the insurer demonstrates to the office's

25  department's satisfaction that exceeding the ratios of this

26  section does not endanger the financial condition of the

27  insurer or endanger the interests of the insurer's

28  policyholders.

29         Section 788.  Section 624.410, Florida Statutes, is

30  amended to read:

31  

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 1         624.410  Permissible insuring combinations without

 2  additional capital funds.--A property insurer may include such

 3  amount and kind of insurance against legal liability for

 4  injury, damage, or loss to the person or property of others,

 5  and for medical, hospital, and surgical expense related to

 6  such injury, as the office department deems to be reasonably

 7  incidental to insurance of real property against fire and

 8  other perils under policies covering residential properties

 9  involving not more than four families, with or without

10  incidental office, professional, private school or studio

11  occupancy by an insured, whether or not the premium or rate

12  charged for certain perils so covered is specified in the

13  policy.  Any provision of s. 624.609 to the contrary

14  notwithstanding, no insurer authorized as to property

15  insurance only shall, pursuant to this subsection, retain risk

16  as to any one subject of insurance as to hazards other than

17  property insurance hazards, in an amount exceeding 5 percent

18  of its surplus as to policyholders.

19         Section 789.  Section 624.411, Florida Statutes, is

20  amended to read:

21         624.411  Deposit requirement; domestic insurers and

22  foreign insurers.--

23         (1)  As to domestic insurers, the office department

24  shall not issue or permit to exist a certificate of authority

25  unless such insurer has deposited and maintains deposited in

26  trust for the protection of the insurer's policyholders or its

27  policyholders and creditors with the department securities

28  eligible for such deposit under s. 625.52, having at all times

29  a value of not less than as follows:

30         (a)  To transact casualty insurance, $250,000.

31  

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 1         (b)  To transact all other kinds of insurance, $100,000

 2  per kind of insurance.

 3         (c)  A domestic insurer authorized to transact more

 4  than one kind of insurance shall not be required to deposit

 5  more than $300,000 under this subsection.

 6         (2)  As to foreign insurers, the office department,

 7  upon issuing or permitting to exist a certificate of

 8  authority, may require for good cause a deposit and

 9  maintenance of the deposit in trust for the protection of the

10  insured's policyholders or its policyholders and creditors

11  with the department securities eligible for such deposit under

12  s. 625.52, having at all times a value of not less than as

13  follows:

14         (a)  To transact casualty insurance, $150,000.

15         (b)  To transact all other kinds of insurance, $100,000

16  per kind of insurance.

17         (c)  A foreign insurer authorized to transact more than

18  one kind of insurance in this state shall not be required to

19  deposit more than $200,000 under this subsection.

20         (d)  A foreign insurer with surplus as to policyholders

21  of more than $10 million according to its latest annual

22  statement shall not be required to make a deposit under this

23  subsection.

24         (3)  Whenever the office department determines that the

25  financial condition of an insurer has deteriorated or that the

26  policyholders' best interests are not being preserved by the

27  activities of an insurer, the office department may require

28  such insurer to deposit and maintain deposited in trust with

29  the department for the protection of the insurer's

30  policyholders or its policyholders and creditors, for such

31  time as the office department deems necessary, securities

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 1  eligible for such deposit under s. 625.52, having a market

 2  value of not less than the amount which the office department

 3  determines is necessary, which amount shall be not less than

 4  $100,000, or more than 25 percent of the insurer's obligations

 5  in this state, as determined from the latest annual financial

 6  statement of the insured.  The deposit required under this

 7  subsection shall not exceed $2 million and is in addition to

 8  any other deposits required of an insurer pursuant to

 9  subsections (1) and (2) or any other provisions of the Florida

10  Insurance Code.

11         (4)  All such deposits in this state are subject to the

12  applicable provisions of part III of chapter 625.

13         Section 790.  Subsection (1) of section 624.412,

14  Florida Statutes, is amended to read:

15         624.412  Deposit of alien insurers.--

16         (1)  An alien insurer shall not have authority to

17  transact insurance in this state unless it has and maintains

18  within the United States as trust deposits with public

19  officials having supervision over insurers, or with trustees,

20  public depositories, or trust institutions approved by the

21  office department, assets available for discharge of its

22  United States insurance obligations, which assets shall be in

23  amount not less than the outstanding reserves and other

24  liabilities of the insurer arising out of its insurance

25  transactions in the United States together with the amount of

26  surplus as to policyholders required by s. 624.408 of a

27  domestic stock insurer transacting like kinds of insurance.

28         Section 791.  Subsection (1) of section 624.413,

29  Florida Statutes, is amended to read:

30         624.413  Application for certificate of authority.--

31  

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 1         (1)  To apply for a certificate of authority, an

 2  insurer shall file its application therefor with the office

 3  department, upon a form adopted by the commission and

 4  furnished by the office it, showing its name; location of its

 5  home office and, if an alien insurer, its principal office in

 6  the United States; kinds of insurance to be transacted; state

 7  or country of domicile; and such additional information as the

 8  commission department may reasonably requires require,

 9  together with the following documents:

10         (a)  One copy of its corporate charter, articles of

11  incorporation, existing and proposed nonfacultative

12  reinsurance contracts, declaration of trust, or other charter

13  documents, with all amendments thereto, certified by the

14  public official with whom the originals are on file in the

15  state or country of domicile.

16         (b)  If a mutual insurer, a copy of its bylaws, as

17  amended, certified by its secretary or other officer having

18  custody thereof.

19         (c)  If a foreign or alien reciprocal insurer, a copy

20  of the power of attorney of its attorney in fact and of its

21  subscribers' agreement, if any, certified by the attorney in

22  fact; and, if a domestic reciprocal insurer, the declaration

23  provided for in s. 629.081.

24         (d)  A copy of its financial statement as of December

25  31 next preceding, containing information generally included

26  in insurer financial statements prepared in accordance with

27  generally accepted insurance accounting principles and

28  practices and in a form generally utilized by insurers for

29  financial statements, sworn to by at least two executive

30  officers of the insurer, or certified by the public official

31  having supervision of insurance in the insurer's state of

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 1  domicile or of entry into the United States.  To facilitate

 2  uniformity in financial statements, the commission department

 3  may by rule adopt the form for financial statements approved

 4  by the National Association of Insurance Commissioners in 2002

 5  1990, and may adopt subsequent amendments thereto if the form

 6  remains substantially consistent.

 7         (e)  Supplemental quarterly financial statements for

 8  each calendar quarter since the beginning of the year of its

 9  application for the certificate of authority, sworn to by at

10  least two of its executive officers. To facilitate uniformity

11  in financial statements, the commission department may by rule

12  adopt the form for quarterly financial statements approved by

13  the National Association of Insurance Commissioners in 2002

14  1990, and may adopt subsequent amendments thereto if the form

15  remains substantially consistent.

16         (f)  If a foreign or alien insurer, a copy of the

17  report of the most recent examination of the insurer certified

18  by the public official having supervision of insurance in its

19  state of domicile or of entry into the United States.  The end

20  of the most recent year covered by the examination must be

21  within the 3-year period preceding the date of application.

22  In lieu of the certified examination report, the office

23  department may accept an audited certified public accountant's

24  report prepared on a basis consistent with the insurance laws

25  of the insurer's state of domicile, certified by the public

26  official having supervision of insurance in its state of

27  domicile or of entry into the United States.

28         (g)  If a foreign or alien insurer, a certificate of

29  compliance from the public official having supervision of

30  insurance in its state or country of domicile showing that it

31  

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 1  is duly organized and authorized to transact insurance therein

 2  and the kinds of insurance it is so authorized to transact.

 3         (h)  If a foreign or alien insurer, a certificate of

 4  the public official having custody of any deposit maintained

 5  by the insurer in another state in lieu of a deposit or part

 6  thereof required in this state under s. 624.411 or s. 624.412,

 7  showing the amount of such deposit and the assets or

 8  securities of which comprised.

 9         (i)  If a life insurer, a certificate of valuation.

10         (j)  If an alien insurer, a copy of the appointment and

11  authority of its United States manager, certified by its

12  officer having custody of its records.

13         Section 792.  Section 624.4135, Florida Statutes, is

14  amended to read:

15         624.4135  Redomestication.--The commission department

16  shall adopt rules establishing procedures and forms for a

17  foreign insurer to apply for a certificate of authority as a

18  domestic insurer.

19         Section 793.  Section 624.414, Florida Statutes, is

20  amended to read:

21         624.414  Issuance or refusal of authority.--The fee for

22  filing application for a certificate of authority shall not be

23  subject to refund.  The office department shall issue to the

24  applicant insurer a proper certificate of authority if it

25  finds that the insurer has met the requirements of this code,

26  exclusive of the requirements relative to the filing and

27  approval of an insurer's policy forms, riders, endorsements,

28  applications, and rates.  If it does not so find, the office

29  department shall issue its order refusing the certificate.

30  The certificate, if issued, shall specify the kind or kinds

31  and line or lines of insurance the insurer is authorized to

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 1  transact in this state.  The issuance of a certificate of

 2  authority does not signify that an insurer has met the

 3  requirements of this code relative to the filing and approval

 4  of an insurer's policy forms, riders, endorsements,

 5  applications, and rates which may be required prior to an

 6  insurer actually writing any premiums.

 7         Section 794.  Section 624.415, Florida Statutes, is

 8  amended to read:

 9         624.415  Ownership of certificate of authority;

10  return.--Although issued to the insurer, the certificate of

11  authority is at all times the property of this state.  Upon

12  any expiration, suspension, or termination thereof, the

13  insurer shall promptly deliver the certificate of authority to

14  the office department.

15         Section 795.  Subsections (2), (3), and (4) of section

16  624.416, Florida Statutes, are amended to read:

17         624.416  Continuance, expiration, reinstatement, and

18  amendment of certificate of authority.--

19         (2)  If not so continued by the insurer, its

20  certificate of authority shall expire at midnight on the May

21  31 next following such failure of the insurer so to continue

22  it in force.  The office department shall promptly notify the

23  insurer of the occurrence of any failure resulting in

24  impending expiration of its certificate of authority.

25         (3)  The office department may, in its discretion,

26  reinstate a certificate of authority which the insurer has

27  inadvertently permitted to expire, after the insurer has fully

28  cured all its failures which resulted in the expiration, and

29  upon payment by the insurer of the fee for reinstatement, in

30  the amount provided in s. 624.501(1)(b).  Otherwise, the

31  insurer shall be granted another certificate of authority only

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 1  after filing application therefor and meeting all other

 2  requirements as for an original certificate of authority in

 3  this state.

 4         (4)  The office department may amend a certificate of

 5  authority at any time to accord with changes in the insurer's

 6  charter or insuring powers.

 7         Section 796.  Section 624.418, Florida Statutes, is

 8  amended to read:

 9         624.418  Suspension, revocation of certificate of

10  authority for violations and special grounds.--

11         (1)  The office department shall suspend or revoke an

12  insurer's certificate of authority if it finds that the

13  insurer:

14         (a)  Is in unsound financial condition.

15         (b)  Is using such methods and practices in the conduct

16  of its business as to render its further transaction of

17  insurance in this state hazardous or injurious to its

18  policyholders or to the public.

19         (c)  Has failed to pay any final judgment rendered

20  against it in this state within 60 days after the judgment

21  became final.

22         (d)  No longer meets the requirements for the authority

23  originally granted.

24         (2)  The office department may, in its discretion,

25  suspend or revoke the certificate of authority of an insurer

26  if it finds that the insurer:

27         (a)  Has violated any lawful order or rule of the

28  office or commission department or any provision of this code.

29         (b)  Has refused to be examined or to produce its

30  accounts, records, and files for examination, or if any of its

31  officers have refused to give information with respect to its

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 1  affairs or to perform any other legal obligation as to such

 2  examination, when required by the office department.

 3         (c)  Has for any line, class, or combination thereof,

 4  with such frequency as to indicate its general business

 5  practice in this state, without just cause refused to pay

 6  proper claims arising under its policies, whether any such

 7  claim is in favor of an insured or is in favor of a third

 8  person with respect to the liability of an insured to such

 9  third person, or without just cause compels such insureds or

10  claimants to accept less than the amount due them or to employ

11  attorneys or to bring suit against the insurer or such an

12  insured to secure full payment or settlement of such claims.

13         (d)  Is affiliated with and under the same general

14  management or interlocking directorate or ownership as another

15  insurer which transacts direct insurance in this state without

16  having a certificate of authority therefor, except as

17  permitted as to surplus lines insurers under part VIII of

18  chapter 626.

19         (e)  Has been convicted of, or entered a plea of guilty

20  or nolo contendere to, a felony relating to the transaction of

21  insurance, in this state or in any other state, without regard

22  to whether adjudication was withheld.

23         (f)  Has a ratio of net premiums written to surplus as

24  to policyholders that exceeds 4 to 1, and the office

25  department has reason to believe that the financial condition

26  of the insurer endangers the interests of the policyholders.

27  The ratio of net premiums written to surplus as to

28  policyholders shall be on an annualized actual or projected

29  basis. The ratio shall be based on the insurer's current

30  calendar year activities and experience to date or the

31  insurer's previous calendar year activities and experience, or

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 1  both, and shall be calculated to represent a 12-month period.

 2  However, the provisions of this paragraph do not apply to any

 3  insurance or insurer exempted from s. 624.4095.

 4         (g)  Is under suspension or revocation in another

 5  state.

 6         (3)  The insolvency or impairment of an insurer

 7  constitutes an immediate serious danger to the public health,

 8  safety, or welfare; and the office department may, at its

 9  discretion, without prior notice and the opportunity for

10  hearing immediately suspend the certificate of authority of an

11  insurer upon a determination that:

12         (a)  The insurer is impaired or insolvent; or

13         (b)  Receivership, conservatorship, rehabilitation, or

14  other delinquency proceedings have been initiated against the

15  insurer by the public insurance supervisory official of any

16  state.

17         Section 797.  Section 624.420, Florida Statutes, is

18  amended to read:

19         624.420  Order, notice of suspension or revocation of

20  certificate of authority; effect; publication.--

21         (1)  Suspension or revocation of an insurer's

22  certificate of authority shall be by the order of the office

23  department. The office department shall promptly also give

24  notice of such suspension or revocation to the insurer's

25  agents in this state of record in the office of the

26  department.  The insurer shall not solicit or write any new

27  coverages in this state during the period of any such

28  suspension and may renew coverages only upon a finding by the

29  office department that the insurer is capable of servicing the

30  renewal coverage.  The insurer shall not solicit or write any

31  new or renewal coverages after any such revocation.

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 1         (2)  In its discretion, the office department may cause

 2  notice of any such suspension or revocation to be published in

 3  one or more newspapers of general circulation published in

 4  this state.

 5         Section 798.  Subsections (2), (3), (4), and (5) of

 6  section 624.421, Florida Statutes, are amended to read:

 7         624.421  Duration of suspension; insurer's obligations

 8  during suspension period; reinstatement.--

 9         (2)  During the period of suspension, the insurer shall

10  file with the office department all documents and information

11  and pay all license fees and taxes as required under this code

12  as if the certificate had continued in full force.

13         (3)  If the suspension of the certificate of authority

14  is for a fixed period of time and the certificate of authority

15  has not been otherwise terminated, upon expiration of the

16  suspension period the insurer's certificate of authority shall

17  be reinstated unless the office department finds that the

18  insurer is not in compliance with the requirements of this

19  code.  The office department shall promptly notify the insurer

20  of such reinstatement, and the insurer shall not consider its

21  certificate of authority reinstated until so notified by the

22  office department.  If not reinstated, the certificate of

23  authority shall be deemed to have expired as of the end of the

24  suspension period or upon failure of the insurer to continue

25  the certificate during the suspension period in accordance

26  with subsection (2), whichever event first occurs.

27         (4)  If the suspension of the certificate of authority

28  was until the occurrence of a specific event or events and the

29  certificate of authority has not been otherwise terminated,

30  upon the presentation of evidence satisfactory to the office

31  department that the specific event or events have occurred,

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 1  the insurer's certificate of authority shall be reinstated

 2  unless the office department finds that the insurer is

 3  otherwise not in compliance with the requirements of this

 4  code. The office department shall promptly notify the insurer

 5  of such reinstatement, and the insurer shall not consider its

 6  certificate of authority reinstated until so notified by the

 7  office department.  If satisfactory evidence as to the

 8  occurrence of the specific event or events has not been

 9  presented to the office department within 2 years of the date

10  of such suspension, the certificate of authority shall be

11  deemed to have expired as of 2 years from the date of

12  suspension or upon failure of the insurer to continue the

13  certificate during the suspension period in accordance with

14  subsection (2), whichever first occurs.

15         (5)  Upon reinstatement of the insurer's certificate of

16  authority, the authority of its agents in this state to

17  represent the insurer shall likewise reinstate.  The office

18  department shall promptly notify the insurer of such

19  reinstatement.

20         Section 799.  Subsections (1), (3), and (4) of section

21  624.4211, Florida Statutes, are amended to read:

22         624.4211  Administrative fine in lieu of suspension or

23  revocation.--

24         (1)  If the office department finds that one or more

25  grounds exist for the discretionary revocation or suspension

26  of a certificate of authority issued under this chapter, the

27  office department may, in lieu of such revocation or

28  suspension, impose a fine upon the insurer.

29         (3)  With respect to any knowing and willful violation

30  of a lawful order or rule of the office or commission

31  department or a provision of this code, the office department

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 1  may impose a fine upon the insurer in an amount not to exceed

 2  $20,000 for each such violation.  In no event shall such fine

 3  exceed an aggregate amount of $100,000 for all knowing and

 4  willful violations arising out of the same action.  In

 5  addition to such fines, such insurer shall make restitution

 6  when due in accordance with the provisions of subsection (2).

 7         (4)  The failure of an insurer to make restitution when

 8  due as required under this section constitutes a willful

 9  violation of this code. However, if an insurer in good faith

10  is uncertain as to whether any restitution is due or as to the

11  amount of such restitution, it shall promptly notify the

12  office department of the circumstances; and the failure to

13  make restitution pending a determination thereof shall not

14  constitute a violation of this code.

15         Section 800.  Section 624.422, Florida Statutes, is

16  amended to read:

17         624.422  Service of process; appointment of Chief

18  Financial Officer Insurance Commissioner and Treasurer as

19  process agent.--

20         (1)  Each licensed insurer, whether domestic, foreign,

21  or alien, shall be deemed to have appointed the Chief

22  Financial Officer Insurance Commissioner and Treasurer and her

23  or his successors in office as its attorney to receive service

24  of all legal process issued against it in any civil action or

25  proceeding in this state; and process so served shall be valid

26  and binding upon the insurer.

27         (2)  Prior to its authorization to transact insurance

28  in this state, each insurer shall file with the department

29  designation of the name and address of the person to whom

30  process against it served upon the Chief Financial Officer

31  Insurance Commissioner and Treasurer is to be forwarded. The

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 1  insurer may change the designation at any time by a new

 2  filing.

 3         (3)  Service of process upon the Chief Financial

 4  Officer Insurance Commissioner and Treasurer as the insurer's

 5  attorney pursuant to such an appointment shall be the sole

 6  method of service of process upon an authorized domestic,

 7  foreign, or alien insurer in this state.

 8         Section 801.  Section 624.423, Florida Statutes, is

 9  amended to read:

10         624.423  Serving process.--

11         (1)  Service of process upon the Chief Financial

12  Officer Insurance Commissioner and Treasurer as process agent

13  of the insurer (under s. 624.422) shall be made by serving

14  copies in triplicate of the process upon the Chief Financial

15  Officer Insurance Commissioner and Treasurer or upon her or

16  his assistant, deputy, or other person in charge of her or his

17  office.  Upon receiving such service, the Chief Financial

18  Officer Insurance Commissioner and Treasurer shall file one

19  copy in her or his office, return one copy with her or his

20  admission of service, and promptly forward one copy of the

21  process by registered or certified mail to the person last

22  designated by the insurer to receive the same, as provided

23  under s. 624.422(2).

24         (2)  Where process is served upon the Chief Financial

25  Officer Insurance Commissioner and Treasurer as an insurer's

26  process agent, the insurer shall not be required to answer or

27  plead except within 20 days after the date upon which the

28  Chief Financial Officer Insurance Commissioner and Treasurer

29  mailed a copy of the process served upon her or him as

30  required by subsection (1).

31  

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 1         (3)  Process served upon the Chief Financial Officer

 2  Insurance Commissioner and Treasurer and copy thereof

 3  forwarded as in this section provided shall for all purposes

 4  constitute valid and binding service thereof upon the insurer.

 5         Section 802.  Section 624.424, Florida Statutes, is

 6  amended to read:

 7         624.424  Annual statement and other information.--

 8         (1)(a)  Each authorized insurer shall file with the

 9  office department full and true statements of its financial

10  condition, transactions, and affairs. An annual statement

11  covering the preceding calendar year shall be filed on or

12  before March 1, and quarterly statements covering the periods

13  ending on March 31, June 30, and September 30 shall be filed

14  within 45 days after each such date. The office department

15  may, for good cause, grant an extension of time for filing of

16  an annual or quarterly statement. The statements shall contain

17  information generally included in insurers' financial

18  statements prepared in accordance with generally accepted

19  insurance accounting principles and practices and in a form

20  generally utilized by insurers for financial statements, sworn

21  to by at least two executive officers of the insurer or, if a

22  reciprocal insurer, by the oath of the attorney in fact or its

23  like officer if a corporation. To facilitate uniformity in

24  financial statements and to facilitate office department

25  analysis, the commission department may by rule adopt the form

26  for financial statements approved by the National Association

27  of Insurance Commissioners in 2002 1990, and may adopt

28  subsequent amendments thereto if the methodology remains

29  substantially consistent, and may by rule require each insurer

30  to submit to the office department or such organization as the

31  office department may designate all or part of the information

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 1  contained in the financial statement in a computer-readable

 2  form compatible with the electronic data processing system

 3  specified by the office department.

 4         (b)  Each insurer's annual statement must contain a

 5  statement of opinion on loss and loss adjustment expense

 6  reserves made by a member of the American Academy of Actuaries

 7  or by a qualified loss reserve specialist, under criteria

 8  established by rule of the commission department. In adopting

 9  the rule, the commission department must consider any criteria

10  established by the National Association of Insurance

11  Commissioners. The office department may require semiannual

12  updates of the annual statement of opinion as to a particular

13  insurer if the office department has reasonable cause to

14  believe that such reserves are understated to the extent of

15  materially misstating the financial position of the insurer.

16  Workpapers in support of the statement of opinion must be

17  provided to the office department upon request. This paragraph

18  does not apply to life insurance or title insurance.

19         (c)  The commission department may by rule require

20  reports or filings required under the insurance code to be

21  submitted on a computer-diskette compatible with the

22  electronic data processing equipment specified by the

23  commission department.

24         (2)  The statement of an alien insurer shall be

25  verified by the insurer's United States manager or other

26  officer duly authorized.  It shall be a separate statement, to

27  be known as its general statement, of its transactions,

28  assets, and affairs within the United States unless the office

29  department requires otherwise. If the office department

30  requires a statement as to the insurer's affairs elsewhere,

31  

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 1  the insurer shall file such statement with the office

 2  department as soon as reasonably possible.

 3         (3)  Each insurer having a deposit as required under s.

 4  624.411 shall file with the office department annually with

 5  its annual statement a certificate to the effect that the

 6  assets so deposited have a market value equal to or in excess

 7  of the amount of deposit so required.

 8         (4)  At the time of filing, the insurer shall pay the

 9  fee for filing its annual statement in the amount specified in

10  s. 624.501.

11         (5)  The office department may refuse to continue, or

12  may suspend or revoke, the certificate of authority of an

13  insurer failing to file its annual or quarterly statements and

14  accompanying certificates when due.

15         (6)  In addition to information called for and

16  furnished in connection with its annual or quarterly

17  statements, an insurer shall furnish to the office department

18  as soon as reasonably possible such information as to its

19  transactions or affairs as the office department may from time

20  to time request in writing.  All such information furnished

21  pursuant to the office's department's request shall be

22  verified by the oath of two executive officers of the insurer

23  or, if a reciprocal insurer, by the oath of the attorney in

24  fact or its like officers if a corporation.

25         (7)  The signatures of all such persons when written on

26  annual or quarterly statements or other reports required by

27  this section shall be presumed to have been so written by

28  authority of the person whose signature is affixed thereon.

29  The affixing of any signature by anyone other than the

30  purported signer constitutes a felony of the second degree,

31  

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 1  punishable as provided in s. 775.082, s. 775.083, or s.

 2  775.084.

 3         (8)(a)  All authorized insurers must have conducted an

 4  annual audit by an independent certified public accountant and

 5  must file an audited financial report with the office

 6  department on or before June 1 for the preceding year ending

 7  December 31.  The office department may require an insurer to

 8  file an audited financial report earlier than June 1 upon 90

 9  days' advance notice to the insurer.  The office department

10  may immediately suspend an insurer's certificate of authority

11  by order if an insurer's failure to file required reports,

12  financial statements, or information required by this

13  subsection or rule adopted pursuant thereto creates a

14  significant uncertainty as to the insurer's continuing

15  eligibility for a certificate of authority.

16         (b)  Any authorized insurer otherwise subject to this

17  section having direct premiums written in this state of less

18  than $1 million in any calendar year and fewer less than 1,000

19  policyholders or certificateholders of directly written

20  policies nationwide at the end of such calendar year is exempt

21  from this section for such year unless the office department

22  makes a specific finding that compliance is necessary in order

23  for the office department to carry out its statutory

24  responsibilities.  However, any insurer having assumed

25  premiums pursuant to contracts or treaties or reinsurance of

26  $1 million or more is not exempt.  Any insurer subject to an

27  exemption must submit by March 1 following the year to which

28  the exemption applies an affidavit sworn to by a responsible

29  officer of the insurer specifying the amount of direct

30  premiums written in this state and number of policyholders or

31  certificateholders.

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 1         (c)  The board of directors of an insurer shall hire

 2  the certified public accountant that prepares the audit

 3  required by this subsection and the board shall establish an

 4  audit committee of three or more directors of the insurer or

 5  an affiliated company. The audit committee shall be

 6  responsible for discussing audit findings and interacting with

 7  the certified public accountant with regard to her or his

 8  findings. The audit committee shall be comprised solely of

 9  members who are free from any relationship that, in the

10  opinion of its board of directors, would interfere with the

11  exercise of independent judgment as a committee member. The

12  audit committee shall report to the board any findings of

13  adverse financial conditions or significant deficiencies in

14  internal controls that have been noted by the accountant. The

15  insurer may request the office department to waive this

16  requirement of the audit committee membership based upon

17  unusual hardship to the insurer.

18         (d)  An insurer may not use the same accountant or

19  partner of an accounting firm responsible for preparing the

20  report required by this subsection for more than 7 consecutive

21  years.  Following this period, the insurer may not use such

22  accountant or partner for a period of 2 years, but may use

23  another accountant or partner of the same firm.  An insurer

24  may request the office department to waive this prohibition

25  based upon an unusual hardship to the insurer and a

26  determination that the accountant is exercising independent

27  judgment that is not unduly influenced by the insurer

28  considering such factors as the number of partners, expertise

29  of the partners or the number of insurance clients of the

30  accounting firm; the premium volume of the insurer; and the

31  

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 1  number of jurisdictions in which the insurer transacts

 2  business.

 3         (e)  The commission department shall adopt rules to

 4  implement this subsection, which rules must be in substantial

 5  conformity with the 1998 1990 Model Rule Requiring Annual

 6  Audited Financial Reports adopted by the National Association

 7  of Insurance Commissioners, except where inconsistent with the

 8  requirements of this subsection. Any exception to, waiver of,

 9  or interpretation of accounting requirements of the commission

10  department must be in writing and signed by an authorized

11  representative of the office department. No insurer may raise

12  as a defense in any action, any exception to, waiver of, or

13  interpretation of accounting requirements, unless previously

14  issued in writing by an authorized representative of the

15  office department.

16         (9)(a)  Each authorized insurer shall, pursuant to s.

17  409.910(20), provide records and information to the Agency for

18  Health Care Administration to identify potential insurance

19  coverage for claims filed with that agency and its fiscal

20  agents for payment of medical services under the Medicaid

21  program.

22         (b)  Each authorized insurer shall, pursuant to s.

23  409.2561(5)(c), notify the Medicaid agency of a cancellation

24  or discontinuance of a policy within 30 days if the insurer

25  received notification from the Medicaid agency to do so.

26         (c)  Any information provided by an insurer under this

27  subsection does not violate any right of confidentiality or

28  contract that the insurer may have with covered persons.  The

29  insurer is immune from any liability that it may otherwise

30  incur through its release of such information to the Agency

31  for Health Care Administration.

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 1         (10)  Each insurer or insurer group doing business in

 2  this state shall file on a quarterly basis in conjunction with

 3  financial reports required by paragraph (1)(a) a supplemental

 4  report on an individual and group basis on a form prescribed

 5  by the commission department with information on personal

 6  lines and commercial lines residential property insurance

 7  policies in this state.  The supplemental report shall include

 8  separate information for personal lines property policies and

 9  for commercial lines property policies and totals for each

10  item specified, including premiums written for each of the

11  property lines of business as described in ss. 215.555(2)(c)

12  and 627.351(6)(a).  The report shall include the following

13  information for each county on a monthly basis:

14         (a)  Total number of policies in force at the end of

15  each month.

16         (b)  Total number of policies canceled.

17         (c)  Total number of policies nonrenewed.

18         (d)  Number of policies canceled due to hurricane risk.

19         (e)  Number of policies nonrenewed due to hurricane

20  risk.

21         (f)  Number of new policies written.

22         (g)  Total dollar value of structure exposure under

23  policies that include wind coverage.

24         (h)  Number of policies that exclude wind coverage.

25         Section 803.  Section 624.4241, Florida Statutes, is

26  amended to read:

27         624.4241  NAIC filing requirements.--

28         (1)  Each domestic, foreign, and alien insurer who is

29  authorized to transact insurance in this state shall file one

30  extra copy of its annual statement convention blank, along

31  with such additional filings as prescribed by the commission

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 1  department for the preceding year.  Such extra copy shall be

 2  for the explicit purpose of allowing the office department to

 3  forward it to the National Association of Insurance

 4  Commissioners.

 5         (2)  Coincident with the filing of the documents

 6  required in subsection (1), each insurer shall pay to the

 7  office department a reasonable fee to cover the costs

 8  associated with the filing and analysis of the documents by

 9  the National Association of Insurance Commissioners and the

10  office department.

11         (3)  The provisions of this section shall not apply to

12  any foreign, domestic, or alien insurer which has filed such

13  documents directly with the National Association of Insurance

14  Commissioners if the National Association of Insurance

15  Commissioners has certified receipt of the required documents

16  to the office department.

17         Section 804.  Subsections (2) and (3) of section

18  624.4243, Florida Statutes, are amended to read:

19         624.4243  Reporting of premium growth.--

20         (2)  Until an insurer has held a certificate of

21  authority in this state for 24 months, the insurer shall,

22  instead of making the calculations required under subsection

23  (1), report to the office department no later than the last

24  day of each month the insurer's direct and assumed written

25  premiums from the United States and its territories for the

26  previous month.

27         (3)  If the amount of the premium growth calculated by

28  an insurer under this section exceeds 33 percent, the insurer

29  shall, within 30 days after the end of the 12-month period

30  ending on the last day of the previous month, file with the

31  office department a statement of the premium growth

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 1  calculations under this section. The commission department

 2  shall adopt rules specifying the form for the report. In

 3  response to a report under this section, the office department

 4  may require the insurer to submit an explanation of the

 5  insurer's pattern of premium growth.

 6         Section 805.  Section 624.4245, Florida Statutes, is

 7  amended to read:

 8         624.4245  Change in controlling interest of foreign or

 9  alien insurer; report required.--In the event of a change in

10  the controlling capital stock or a change of 50 percent or

11  more of the assets of a foreign or alien insurer, such insurer

12  shall report such change in writing to the office department

13  within 30 days of the effective date thereof.  The report

14  shall contain the name and address of the new owner or owners

15  of the controlling stock or assets, the nature and value of

16  the new assets, and such other relevant information as the

17  commission or office department may reasonably require. For

18  the purposes of this section, the term "controlling capital

19  stock" means a sufficient number of shares of the issued and

20  outstanding capital stock of such insurer or person so as to

21  give the owner thereof power to exercise a controlling

22  influence over the management or policies of such insurer or

23  person.

24         Section 806.  Subsections (1), (2), (3), (7), and (8)

25  of section 624.430, Florida Statutes, are amended to read:

26         624.430  Withdrawal of insurer or discontinuance of

27  writing certain kinds or lines of insurance.--

28         (1)  Any insurer desiring to surrender its certificate

29  of authority, withdraw from this state, or discontinue the

30  writing of any one or multiple kinds or lines of insurance in

31  this state shall give 90 days' notice in writing to the office

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 1  department setting forth its reasons for such action.  Any

 2  insurer who does not write any premiums in a kind or line of

 3  insurance within a calendar year shall have that kind or line

 4  of insurance removed from its certificate of authority;

 5  however, such line of insurance shall be restored to the

 6  insurer's certificate upon the insurer demonstrating that it

 7  has available the expertise necessary and meets the other

 8  requirements of this code to write that line of insurance.

 9         (2)  If the office department determines, based upon

10  its review of the notice and other required information, that

11  the plan of an insurer withdrawing from this state makes

12  adequate provision for the satisfaction of the insurer's

13  obligations and is not hazardous to policyholders or the

14  public, the office department shall approve the surrender of

15  the insurer's certificate of authority. The office department

16  shall, within 45 days from receipt of a complete notice and

17  all required or requested additional information, approve,

18  disapprove, or approve with conditions the plan submitted by

19  the insurer. Failure to timely take action with respect to the

20  notice shall be deemed an approval of the surrender of the

21  certificate of authority.

22         (3)  Upon office department approval of the surrender

23  of the certificate of authority of a domestic property and

24  casualty insurer that is a corporation, the insurer may

25  initiate the dissolution of the corporation in accordance with

26  the applicable provisions of chapter 607.

27         (7)  This section does not apply to insurers who have

28  discontinued writing in accordance with an order issued by the

29  office department.

30         (8)  The commission department may adopt rules to

31  administer this section.

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 1         Section 807.  Subsections (5) and (6) of section

 2  624.4361, Florida Statutes, are amended to read:

 3         624.4361  Definitions.--As used in ss. 624.436-624.446:

 4         (5)  "Statutory accounting principles" means generally

 5  accepted accounting principles, except as modified by part I

 6  of chapter 625 and by rules adopted by the commission

 7  department which recognize the difference between an

 8  arrangement and an insurer.

 9         (6)  "Surplus notes" means funds borrowed by a

10  multiple-employer welfare arrangement which result in a

11  written instrument which includes all of the following:

12         (a)  The effective date, amount, interest, and parties

13  involved are clearly set forth.

14         (b)  The principal sum and any interest accrued thereon

15  are subject to and subordinate to all other liabilities of the

16  multiple-employer welfare arrangement.

17         (c)  The instrument states that the parties agree that

18  the multiple-employer welfare arrangement shall satisfy the

19  office department that all claims of participants and general

20  creditors of the organization have been paid or otherwise

21  discharged prior to any payment of interest or repayment of

22  principal.

23         (d)  The instrument is executed by both parties and a

24  certified copy of the instrument is filed with the office

25  department.

26         (e)  The parties agree not to modify, terminate, or

27  cancel the surplus note without the prior approval of the

28  office department.

29         Section 808.  Subsections (2) and (4) of section

30  624.437, Florida Statutes, are amended to read:

31  

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 1         624.437  "Multiple-employer welfare arrangement"

 2  defined; certificate of authority required; penalty.--

 3         (2)  No person shall operate, maintain, or, after

 4  October 1, 1983, establish a multiple-employer welfare

 5  arrangement unless such arrangement has a valid certificate of

 6  authority issued by the office department.

 7         (4)(a)  Any person failing to hold a subsisting

 8  certificate of authority from the office department while

 9  operating or maintaining a multiple-employer welfare

10  arrangement shall be subject to a fine of not less than $5,000

11  or more than $100,000 for each violation.

12         (b)  Any person who operates or maintains a

13  multiple-employer welfare arrangement without a subsisting

14  certificate of authority from the office department shall be

15  subject to the cease and desist penalty powers of the office

16  department as set forth in ss. 626.9571, 626.9581, 626.9591,

17  and 626.9601.

18         (c)1.  Any person who operates or maintains a

19  multiple-employer welfare arrangement without a subsisting

20  certificate of authority as required under this section

21  commits a felony of the third degree, punishable as provided

22  in s. 775.082 or s. 775.083.

23         2.  Except as provided in subparagraph 1., any person

24  who violates the provisions of ss. 624.437-624.446 commits a

25  misdemeanor of the first degree, punishable as provided in s.

26  775.082 or s. 775.083.

27         (d)  In addition to the penalties and other enforcement

28  provisions of the Florida Insurance Code, the office

29  department is vested with the power to seek both temporary and

30  permanent injunctive relief when:

31  

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 1         1.  A multiple-employer welfare arrangement is being

 2  operated by any person or entity without a subsisting

 3  certificate of authority.

 4         2.  Any person, entity, or multiple-employer welfare

 5  arrangement has engaged in any activity prohibited by the

 6  Florida Insurance Code or by any rule adopted pursuant

 7  thereto.

 8         3.  Any multiple-employer welfare arrangement, person,

 9  or entity is renewing, issuing, or delivering a policy,

10  contract, certificate, summary plan description, or other

11  evidence of the benefits and coverages provided to employees

12  or employee family members without a subsisting certificate of

13  authority.

14  

15  The office's department's authority to seek injunctive relief

16  shall not be conditioned on having conducted any proceeding

17  pursuant to chapter 120.  The authority vested in the office

18  department by virtue of the operation of this section shall

19  not act to reduce any other enforcement remedy or power to

20  seek injunctive relief that may otherwise be available to the

21  office department.

22         Section 809.  Subsections (5) and (6) of section

23  624.438, Florida Statutes, are amended to read:

24         624.438  General eligibility.--

25         (5)  The office department shall not grant or continue

26  a certificate of authority for any arrangement if the office

27  department determines any trustee, manager, or administrator

28  to be incompetent, untrustworthy, or so lacking in insurance

29  expertise as to make the operations of the arrangement

30  hazardous to potential and existing insureds; that any

31  trustee, manager, or administrator has been found guilty of,

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 1  or has pled guilty or no contest to a felony, a crime

 2  involving moral turpitude, or a crime punishable by

 3  imprisonment of 1 year or more under the law of any state,

 4  territory, or country, whether or not a judgment or conviction

 5  has been entered; that any trustee, manager, or administrator

 6  has had any type of insurance license revoked in this or any

 7  other state; or that the business operations of the

 8  arrangement are or have been marked, to the detriment of the

 9  employers participating in the arrangement, of persons

10  receiving benefits from the arrangement, or of creditors or

11  the public, by the improper manipulation of assets, accounts,

12  or specific excess insurance or by bad faith.

13         (6)  To qualify for and retain approval to transact

14  business, an arrangement shall make all contracts with

15  administrators or service companies available for inspection

16  by the office department initially, and annually thereafter

17  upon reasonable notice.

18         Section 810.  Section 624.439, Florida Statutes, is

19  amended to read:

20         624.439  Filing of application.--The sponsoring

21  association shall file with the office department an

22  application for a certificate of authority upon a form to be

23  adopted by the commission and furnished by the office

24  department, signed under oath by officers of the trust, which

25  shall include or have attached the following:

26         (1)  A copy of the articles of incorporation,

27  constitution, and bylaws of the association, if any.

28         (2)  A list of the names, addresses, and official

29  capacities within the arrangement of the individuals who are

30  to be responsible for the management of and the conduct of the

31  affairs of the arrangement, including all trustees, officers,

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 1  and directors. Such individuals shall fully disclose to the

 2  office department the extent and nature of any contracts or

 3  arrangements between themselves and the arrangement, including

 4  any possible conflicts of interest.

 5         (3)  A copy of the articles of incorporation, bylaws,

 6  or trust agreement which governs the operation of the

 7  arrangement.

 8         (4)  A copy of the policy, contract, certificate,

 9  summary plan description, or other evidence of the benefits

10  and coverages provided to covered employees, which shall be in

11  accordance with s. 627.651(4), and which shall include a table

12  of the rates charged, or proposed to be charged, for each form

13  of such contract.  A qualified actuary shall certify that:

14         (a)  The rates are not inadequate.

15         (b)  The rates are appropriate for the class of risks

16  for which they have been computed.

17         (c)  An adequate description of the rating methodology

18  has been filed with the office department and such methodology

19  follows consistent and equitable actuarial principles.

20         (5)  A copy of the fidelity bond in an amount equal to

21  not less than 10 percent of the funds handled annually and

22  issued in the name of the arrangement covering its trustees,

23  directors, officers, employees, administrator, or other

24  individuals managing or handling the funds or assets of the

25  arrangement.  In no case may such bond be less than $50,000 or

26  more than $500,000, except that the office department, after

27  due notice to all interested parties and opportunity for

28  hearing, and after consideration of the record, may prescribe

29  an amount in excess of $500,000, subject to the 10-percent

30  limitation of the preceding sentence.

31  

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 1         (6)(a)  A copy of the arrangement's excess insurance

 2  agreement, which shall provide that the net retention level

 3  for any one risk shall not exceed $50,000, and which shall

 4  otherwise be in accordance with sound actuarial principles.

 5         (b)  The office department may waive or modify the

 6  maximum net retention requirement if:

 7         1.  The excess insurance is not available for a

 8  reasonable cost; or

 9         2.  The arrangement:

10         a.  Has 150 percent of the statutory reserve

11  requirement as specified in s. 624.441;

12         b.  Has a fund balance in excess of that required by

13  statute; and

14         c.  Has a ratio of current assets to current

15  liabilities of at least 2.0 to 1.0.

16         (7)(a)  A feasibility study, done by an independent

17  qualified actuary and an independent certified public

18  accountant, determined by the office department to

19  satisfactorily address market potential, market penetration,

20  market competition, operating expenses, gross revenues, net

21  income, total assets and liabilities, cash flow, and such

22  other items as the office or commission department may

23  reasonably requires require.  The study shall be for the

24  greater of 3 years or until the arrangement has been projected

25  to be profitable for 12 consecutive months. The study must

26  show that the arrangement would not, at any month-end of the

27  projection period, have less than the minimum statutory

28  deposit as required by s. 624.441 or have a fund balance less

29  than the amount required by s. 624.4392.

30  

31  

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 1         (b)  The feasibility study shall reflect and support

 2  that initial gross premiums for the first year of operation

 3  will be at least $100,000.

 4         (8)  Evidence satisfactory to the office department

 5  showing that the arrangement will be operated in accordance

 6  with sound actuarial principles. The office department shall

 7  not approve the arrangement unless the office department

 8  determines that the plan is designed to provide sufficient

 9  revenues to pay current and future liabilities, as determined

10  in accordance with sound actuarial principles.

11         (9)  Confirmation of insolvency protection as required

12  by s. 624.441.

13         (10)  A copy of each contract between the arrangement

14  and any administrator or service company which may be made

15  available for review rather than filed or attached.

16         (11)  Such additional information as the office or

17  commission department may reasonably requires require.

18         Section 811.  Subsections (1) and (3) of section

19  624.4392, Florida Statutes, are amended to read:

20         624.4392  Fund balance.--

21         (1)  Each multiple-employer welfare arrangement

22  licensed on or after October 1, 1991, shall have a fund

23  balance equal to $200,000 before a certificate of authority

24  may be issued by the office department.  After it has received

25  a certificate of authority, the arrangement must maintain a

26  fund balance equal to $100,000 or 10 percent of total

27  liabilities, whichever is greater.

28         (3)  The office department shall order the arrangement

29  to assess participating employers at any time the fund balance

30  does not meet the requirements of this section.

31  

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 1         Section 812.  Section 624.44, Florida Statutes, is

 2  amended to read:

 3         624.44  Examination by the office department.--

 4         (1)(a)  The office department shall examine the

 5  affairs, transactions, accounts, business records, and assets

 6  of any multiple-employer welfare arrangement as often as it

 7  deems necessary for the protection of the people of the state,

 8  but not less frequently than once every 3 years.  For the

 9  purpose of examinations, the office department may administer

10  oaths and examine the trustees, directors, officers, and

11  agents of an arrangement concerning its business and affairs.

12         (b)  The expenses of examination of each arrangement by

13  the office are department shall be subject to the same terms

14  and conditions as apply to insurers under part II.

15         (c)  The office department may contract, at reasonable

16  fees for work performed, with qualified, impartial, outside

17  sources to perform audits or examinations or portions thereof

18  to determine continued compliance with the requirements of ss.

19  624.436-624.446. Any contracted assistance shall be under

20  direct supervision of the office department.  The results of

21  any contracted assistance shall be subject to review,

22  approval, disapproval, or modification by the office

23  department.

24         (2)  If the office department preliminarily finds that

25  an arrangement is insolvent, the office department shall

26  notify the arrangement of such insolvency. Upon being so

27  notified, the arrangement shall within 15 days file with the

28  office department all information that proves that the

29  arrangement is not insolvent.

30         (3)  If the arrangement fails within the 15-day period

31  provided in subsection (2) to supply information showing to

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 1  the satisfaction of the office department that the arrangement

 2  is not insolvent, the office department may:

 3         (a)1.  Suspend any new enrollment;

 4         2.  Suspend or revoke the arrangement's certificate of

 5  authority; or

 6         3.  Place the arrangement in administrative supervision

 7  under s. 624.80; or

 8         (b)  For the purposes of dissolution, liquidation, or

 9  rehabilitation, place the arrangement under the supervision of

10  the department pursuant to chapter 631.

11         Section 813.  Subsections (2) and (3) of section

12  624.441, Florida Statutes, are amended to read:

13         624.441  Insolvency protection.--

14         (2)  All income from deposits shall belong to the

15  depositing arrangement and shall be paid to it as it becomes

16  available.  An arrangement that has made a securities deposit

17  may withdraw that deposit, or any part thereof, after making a

18  substitute deposit of cash, securities, or any combination of

19  these or other measures of equal amount and value, upon

20  approval by the office and department.  No judgment creditor

21  or other claimant of a multiple-employer welfare association

22  shall have the right to levy upon any of the assets or

23  securities held in this state as a deposit under this section.

24         (3)  Deposits of securities or cash pursuant to this

25  section shall be administered by the office and department in

26  accordance with part III of chapter 625.

27         Section 814.  Section 624.4411, Florida Statutes, is

28  amended to read:

29         624.4411  Administrative, provider, and management

30  contracts.--

31  

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 1         (1)  The office department may require a

 2  multiple-employer welfare arrangement to submit any contract

 3  for administrative services, contract with a provider other

 4  than an individual physician, contract for management

 5  services, or contract with an affiliated person to the office

 6  department, if the office department has reason to believe

 7  that the arrangement has entered into a contract which

 8  requires it to pay a fee which is unreasonably high in

 9  relation to the services provided. Multiple-employer welfare

10  arrangements are prohibited from paying a fee to a sponsoring

11  association unless such fee is directly related to services

12  provided by the association for the arrangement.

13         (2)  After review of a contract, the office department

14  may order the arrangement to cancel the contract in accordance

15  with the terms of the contract and applicable law if the

16  office department determines that the fees to be paid by the

17  arrangement under the contract are so unreasonably high in

18  relation to the services provided that the contract is

19  detrimental to the policyholders or certificateholders of the

20  arrangement.

21         (3)  All contracts for administrative services,

22  management services, and provider services other than

23  individual physician contracts, and all contracts with

24  affiliated entities, entered into or renewed by an arrangement

25  on or after October 1, 1991, shall contain a provision that

26  the contract shall be canceled upon issuance of an order by

27  the office department pursuant to this section.

28         Section 815.  Section 624.4412, Florida Statutes, is

29  amended to read:

30         624.4412  Policy forms.--

31  

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 1         (1)  No policy or contract form, application form,

 2  certificate, rider, endorsement, summary plan description, or

 3  other evidence of coverage shall be issued by an arrangement

 4  unless the form and all changes thereto have been filed with

 5  the office department at its offices in Tallahassee by or on

 6  behalf of the arrangement which proposes to use such form and

 7  have been approved by the office department.  Filing of all

 8  forms shall be in accordance with the provisions of s.

 9  627.410(2).

10         (2)  The office department shall disapprove any form

11  filed under this section, or withdraw any previous approval

12  thereof, only if the form:

13         (a)  Is in any respect in violation of, or does not

14  comply with, this code;

15         (b)  Contains or incorporates by reference, where such

16  incorporation is otherwise permissible, any inconsistent,

17  ambiguous, or misleading clauses, or exceptions and conditions

18  which deceptively affect the risk purported to be assumed in

19  the general coverage of the contract;

20         (c)  Has any title, heading, or other indication of its

21  provisions which is misleading;

22         (d)  Is printed or otherwise reproduced in such manner

23  as to render any material provision of the form substantially

24  illegible; or

25         (e)  Contains provisions which are unfair or

26  inequitable, or contrary to the public policy of this state or

27  which encourage misrepresentation.

28         Section 816.  Section 624.442, Florida Statutes, is

29  amended to read:

30         624.442  Annual reports; actuarial certification;

31  quarterly reports; penalties.--

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 1         (1)  Every arrangement shall, annually within 3 months

 2  after the end of the fiscal year or within such extension of

 3  time therefor as the office department for good cause may

 4  grant, file a report with the office department, on forms

 5  prescribed by the commission department, verified by the oath

 6  of a member of the board of trustees and by an administrative

 7  executive appointed by the board, showing its condition on the

 8  last day of the preceding fiscal year.  The report shall

 9  contain an audited financial statement of the arrangement

10  prepared in accordance with statutory accounting principles,

11  including its balance sheet and a statement of operations for

12  the preceding year certified by an independent certified

13  public accountant.  The report shall also include an analysis

14  of the adequacy of reserves and contributions or premiums

15  charged, based on a review of past and projected claims and

16  expenses.

17         (2)  In addition to information called for and

18  furnished in connection with the annual report, if reasonable

19  grounds exist, the office department may request information

20  which summarizes paid and incurred expenses, and contributions

21  or premiums received, and may request evidence satisfactory to

22  the office department that the arrangement is actuarially

23  sound.  Such information and evidence shall be furnished to

24  the office department by the arrangement as soon as reasonably

25  possible after requested by the office department, but not

26  later than 30 days after such request, unless the office

27  department, for good cause, grants an extension.

28         (3)  Annually, in conjunction with the annual report

29  required by subsection (1), each arrangement shall submit an

30  actuarial certification prepared by an independent actuary

31  certifying that:

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 1         (a)  The arrangement is actuarially sound.  The

 2  certification shall consider the rates, benefits, and expenses

 3  of, and any other funds available for the payment of the

 4  obligations of, the arrangement.

 5         (b)  The rates being charged and to be charged for

 6  contracts are actuarially adequate through the end of the

 7  period for which rates have been guaranteed.

 8         (c)  Incurred but not reported claims and claims

 9  reported but not fully paid have been adequately provided for.

10         (d)  Such other information relating to the performance

11  of the arrangement as the commission or office department

12  requires.

13         (4)  Each arrangement shall file quarterly, within 45

14  days after the end of each of its four quarterly reporting

15  periods, an unaudited financial statement of the arrangement

16  on forms prescribed by the commission department, verified

17  according to the best of their information, knowledge, and

18  belief by the oath of a member of the board of trustees and by

19  an administrative executive appointed by the board showing its

20  condition on the last day of the preceding quarter.

21         (5)  Any arrangement that fails to file an annual

22  financial report, actuarial report, or quarterly financial

23  report in the form and within the time required by this

24  section shall forfeit to the office department an amount set

25  by order of the office department which does not exceed $1,000

26  for each of the first 10 days of noncompliance and does not

27  exceed $2,000 for each subsequent day of noncompliance.  Upon

28  notice by the office department that the arrangement is not in

29  compliance with this section, the arrangement's authority to

30  enroll new enrollees or to do business in this state ceases

31  until the office department determines the arrangement to be

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 1  in compliance.  The office department may not collect more

 2  than $100,000 under this paragraph with respect to any

 3  particular report.

 4         (6)  All moneys collected by the office department

 5  under this section shall be deposited to the credit of the

 6  Insurance Commissioner's Regulatory Trust Fund.

 7         (7)  Each authorized arrangement must retain an

 8  independent certified public accountant, referred to in this

 9  subsection as "CPA," who agrees by written contract with the

10  arrangement to comply with ss. 624.436-624.445.  The contract

11  must state that:

12         (a)  The CPA will provide to the arrangement audited

13  financial statements consistent with ss. 624.436-624.445.

14         (b)  Any determination by the CPA that the arrangement

15  does not meet the minimum surplus requirements set forth in

16  ss. 624.436-624.445 will be stated by the CPA, in writing, in

17  the audited financial statement.

18         (c)  The completed workpapers and any written

19  communications between the CPA and the arrangement will be

20  made available for review on a visual inspection-only basis by

21  the office department at the location offices of the

22  arrangement, the office department, or any other reasonable

23  place agreeable to both the office department and the

24  arrangement.

25         (d)  The CPA will retain for review the workpapers and

26  written communications with the arrangement for not less than

27  6 years.

28         Section 817.  Section 624.443, Florida Statutes, is

29  amended to read:

30         624.443  Place of business; maintenance of

31  records.--Each arrangement shall have and maintain its

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 1  principal place of business in this state and shall therein

 2  make available to the office department complete records of

 3  its assets, transactions, and affairs in accordance with such

 4  methods and systems as are customary for, or suitable to, the

 5  kind or kinds of business transacted.

 6         Section 818.  Section 624.4431, Florida Statutes, is

 7  amended to read:

 8         624.4431  Administration; rules.--The administration of

 9  ss. 624.436-624.446 is vested in the commission and office

10  department. The commission may department has authority to

11  adopt rules pursuant to ss. 120.536(1) and 120.54 to implement

12  the provisions of ss. 624.436-624.446.

13         Section 819.  Section 624.444, Florida Statutes, is

14  amended to read:

15         624.444  Suspension, revocation of approval.--

16         (1)  The office department shall deny, suspend, or

17  revoke an arrangement's certificate of authority if it finds

18  that the arrangement:

19         (a)  Is insolvent;

20         (b)  Is using such methods and practices in the conduct

21  of its business as to render its further transaction of

22  business in this state hazardous or injurious to its

23  participating employers, covered employees and dependents, or

24  to the public;

25         (c)  Has failed to pay any final judgment rendered

26  against it in this state within 60 days after the judgment

27  became final;

28         (d)  Is in violation of any provision of this chapter,

29  including any requirements for the granting of a certificate

30  of authority;

31  

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 1         (e)  Is no longer actuarially sound or the arrangement

 2  does not have the minimum surplus required by this chapter; or

 3         (f)  The existing contract rates are inadequate.

 4         (2)  The office department may, in its discretion,

 5  deny, suspend, or revoke the certificate of authority of any

 6  arrangement if it finds that the arrangement:

 7         (a)  Has violated any lawful order or rule of the

 8  office or commission department or any applicable provision of

 9  the Florida Insurance Code; or

10         (b)  Has refused to be examined or to produce its

11  accounts, records, and files for examination, or if any of its

12  officers have refused to give information with respect to its

13  affairs or to perform any other legal obligation as to such

14  examination, when required by the office department.

15         (3)  Whenever the financial condition of the

16  arrangement is such that, if not modified or corrected, its

17  continued operation would result in impairment or insolvency,

18  the department may order the arrangement to file with the

19  office department and implement a corrective action plan

20  designed to do one or more of the following:

21         (a)  Reduce the total amount of present potential

22  liability for benefits by reinsurance or other means.

23         (b)  Reduce the volume of new business being accepted.

24         (c)  Reduce the expenses of the arrangement by

25  specified methods.

26         (d)  Suspend or limit the writing of new business for a

27  specified period of time.

28         (e)  Require an increase in the arrangement's net

29  worth.

30  

31  

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 1  If the arrangement fails to submit a plan within 30 days after

 2  the office's department's order, or if the plan submitted is

 3  insufficient to correct the arrangement's financial condition,

 4  the office department may order the arrangement to implement

 5  one or more of the corrective actions specified in this

 6  subsection.

 7         (4)  In any order to suspend the authority of an

 8  arrangement to enroll new subscribers, the office department

 9  shall specify the period during which the suspension is to be

10  in effect and the conditions, if any, which must be met by the

11  arrangement prior to reinstatement of its authority to enroll

12  new subscribers.  The order of suspension is subject to

13  rescission or modification by further order of the office

14  department prior to the expiration of the suspension period.

15  An arrangement's authority to enroll new subscribers shall not

16  be reinstated unless it requests reinstatement, and shall not

17  be reinstated if the office department finds that the

18  circumstances that gave rise to the suspension still exist.

19         Section 820.  Subsection (2) of section 624.445,

20  Florida Statutes, is amended to read:

21         624.445  Order, notice, duration, effect of suspension

22  or revocation; administrative fine.--

23         (2)  If the office department finds that one or more

24  grounds exist for the discretionary revocation or suspension

25  of an arrangement's certificate of authority under ss.

26  624.436-624.446, the office department may, in lieu of or in

27  addition to such revocation or suspension, impose a fine upon

28  such arrangement, in accordance with s. 624.4211.

29         Section 821.  Section 624.4435, Florida Statutes, is

30  transferred, renumbered as section 624.448, Florida Statutes,

31  and amended to read:

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 1         624.448 624.4435  Assets of insurers; reporting

 2  requirements.--

 3         (1)  As used in this section, the term:

 4         (a)  "Material acquisition of assets" or "material

 5  disposition of assets" means one or more transactions

 6  occurring during any 30-day period which are nonrecurring and

 7  not in the ordinary course of business and involve more than 5

 8  percent of the reporting insurer's total admitted assets as

 9  reported in its most recent statutory statement filed with the

10  insurance department of the insurer's state of domicile.

11         (b)  "Material nonrenewal, cancellation, or revision of

12  a ceded reinsurance agreement" is one that affects:

13         1.  With respect to property and casualty business,

14  including accident and health business written by a property

15  and casualty insurer:

16         a.  More than 50 percent of the insurer's total ceded

17  written premium; or

18         b.  More than 50 percent of the insurer's total ceded

19  indemnity and loss adjustment reserves.

20         2.  With respect to life, annuity, and accident and

21  health business, more than 50 percent of the total reserve

22  credit taken for business ceded, on an annualized basis, as

23  indicated in the insurer's most recent annual statement.

24         3.  With respect to property and casualty business or

25  life, annuity, and accident and health business, a material

26  revision includes:

27         a.  The replacement of an authorized reinsurer

28  representing more than 10 percent of a total cession by one or

29  more unauthorized reinsurers; or

30         b.  The reduction or waiver, with respect to one or

31  more unauthorized insurers, of previously established

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 1  collateral requirements representing more than 10 percent of a

 2  total cession.

 3         (2)  Each domestic insurer shall file a report with the

 4  office Department of Insurance disclosing a material

 5  acquisition of assets, a material disposition of assets, or a

 6  material nonrenewal, cancellation, or revision of a ceded

 7  reinsurance agreement, unless the material acquisition or

 8  disposition of assets or the material nonrenewal,

 9  cancellation, or revision of a ceded reinsurance agreement has

10  been submitted to the office department for review, approval,

11  or informational purposes under another section of the Florida

12  Insurance Code or a rule adopted thereunder. A copy of the

13  report and each exhibit or other attachment must be filed by

14  the insurer with the National Association of Insurance

15  Commissioners. The report required in this section is due

16  within 15 days after the end of the calendar month in which

17  the transaction occurs.

18         (3)  An immaterial acquisition or disposition of assets

19  need not be reported under this section.

20         (4)(a)  Acquisitions of assets which are subject to

21  this section include each purchase, lease, exchange, merger,

22  consolidation, succession, or other acquisition of assets.

23  Asset acquisitions for the construction or development of real

24  property by or for the reporting insurer and the acquisition

25  of construction materials for this purpose are not subject to

26  this section.

27         (b)  Dispositions of assets which are subject to this

28  section include each sale, lease, exchange, merger,

29  consolidation, mortgage, hypothecation, assignment for the

30  benefit of a creditor or otherwise, abandonment, destruction,

31  or other disposition of assets.

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 1         (5)(a)  The following information must be disclosed in

 2  any report of a material acquisition or disposition of assets:

 3         1.  The date of the transaction;

 4         2.  The manner of acquisition or disposition;

 5         3.  The description of the assets involved;

 6         4.  The nature and amount of the consideration given or

 7  received;

 8         5.  The purpose of, or reason for, the transaction;

 9         6.  The manner by which the amount of consideration was

10  determined;

11         7.  The gain or loss recognized or realized as a result

12  of the transaction; and

13         8.  The name of the person from whom the assets were

14  acquired or to whom they were disposed.

15         (b)  Insurers must report material acquisitions or

16  dispositions on a nonconsolidated basis unless the insurer is

17  part of a consolidated group of insurers which uses a pooling

18  arrangement or a 100-percent reinsurance agreement that

19  affects the solvency and integrity of the insurer's reserves

20  and the insurer has ceded substantially all of its direct and

21  assumed business to the pool. An insurer is deemed to have

22  ceded substantially all of its direct and assumed business to

23  a pool if the insurer has less than $1 million in total direct

24  and assumed written premiums during a calendar year which are

25  not subject to a pooling arrangement and if the net income of

26  the business which is not subject to the pooling arrangement

27  represents less than 5 percent of the insurer's capital and

28  surplus.

29         (6)  The nonrenewal, cancellation, or revision of a

30  ceded reinsurance agreement need not be reported if the

31  renewal or the revision is not material or if:

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 1         (a)  With respect to property and casualty business,

 2  including accident and health business written by a property

 3  and casualty insurer, the insurer's total ceded written

 4  premium represents, on an annualized basis, less than 10

 5  percent of its total written premium for direct and assumed

 6  business; or

 7         (b)  With respect to life, annuity, and accident and

 8  health business, the total reserve credit taken for business

 9  ceded represents, on an annualized basis, less than 10 percent

10  of the statutory reserve requirement before the cession.

11         (7)(a)  The following information must be disclosed in

12  any report of a material nonrenewal, cancellation, or revision

13  of a ceded reinsurance agreement:

14         1.  The effective date of the nonrenewal, cancellation,

15  or revision;

16         2.  The description of the transaction and the

17  identification of the initiator of the transaction;

18         3.  The purpose of, or reason for, the transaction; and

19         4.  If applicable, the identity of each replacement

20  reinsurer.

21         (b)  Insurers shall report the material nonrenewal,

22  cancellation, or revision of a ceded reinsurance agreement on

23  a nonconsolidated basis unless the insurer is part of a

24  consolidated group of insurers which uses a pooling

25  arrangement or a 100-percent reinsurance agreement that

26  affects the solvency and integrity of the insurer's reserves

27  and the insurer has ceded substantially all of its direct and

28  assumed business to the pool. An insurer is deemed to have

29  ceded substantially all of its direct and assumed business to

30  a pool if the insurer has less than $1 million in total direct

31  and assumed written premiums during a calendar year which are

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 1  not subject to a pooling arrangement and if the net income of

 2  the business not subject to the pooling arrangement represents

 3  less than 5 percent of the insurer's capital and surplus.

 4         Section 822.  Subsection (1) of section 624.45, Florida

 5  Statutes, is amended to read:

 6         624.45  Participation of financial institutions in

 7  reinsurance and in insurance exchanges.--Subject to applicable

 8  laws relating to financial institutions and to any other

 9  applicable provision of the Florida Insurance Code, any

10  financial institution or aggregation of such institutions may:

11         (1)  Own or control, directly or indirectly, any

12  insurer which is authorized or approved by the office

13  department, which insurer transacts only reinsurance in this

14  state and which actively engages in reinsuring risks located

15  in this state.

16  

17  Nothing in this section shall be deemed to prohibit a

18  financial institution from engaging in any presently

19  authorized insurance activity.

20         Section 823.  Subsections (1), (2), (3), (4), (5), and

21  (6) of section 624.4621, Florida Statutes, are amended to

22  read:

23         624.4621  Group self-insurance funds.--

24         (1)  The commission department shall adopt rules that

25  allow two or more employers to enter into agreements to pool

26  their liabilities under chapter 440 for the purpose of

27  qualifying as a group self-insurer's fund, which shall be

28  classified as a self-insurer, and each employer member of such

29  approved group shall be known as a group self-insurer's fund

30  member and shall be classified as a self-insurer as defined in

31  chapter 440. The agreement entered into under this section may

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 1  provide that the pool will be liable for 80 percent, and the

 2  employer member will be liable for 20 percent, of the medical

 3  benefits due any employee for an injury compensable under this

 4  chapter up to the amount of $5,000. One hundred percent of the

 5  medical benefits above $5,000 due to an employee for one

 6  injury shall be paid by the pool. The agreement may also

 7  provide that each employer member will be responsible for up

 8  to the first $500 of medical benefits due each of its

 9  employees for each injury. The claim shall be paid by the

10  pool, regardless of its size, which shall be reimbursed by the

11  employer for any amounts required to be paid by the employer

12  under the agreement.

13         (2)  The commission department shall adopt rules:

14         (a)  Requiring monetary reserves to be maintained by

15  such self-insurers to insure their financial solvency; and

16         (b)  Governing their organization and operation to

17  assure compliance with such requirements.

18         (3)  The commission department shall adopt rules

19  implementing the reserve requirements in accordance with

20  accepted actuarial techniques.

21         (4)  Any self-insurer established under this section,

22  except for self-insurers that are state or local governmental

23  entities, is required to carry reinsurance in accordance with

24  rules adopted by the commission department.

25         (5)  A dividend or premium refund of any self-insurer

26  established under this section, otherwise earned, may not be

27  made contingent upon continued membership in the fund, renewal

28  of any policy, or the payment of renewal premiums for

29  membership in the fund or on any policy issued by such

30  self-insurer. Before making any dividend or premium refund,

31  

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 1  the group self-insurer shall submit to the office department

 2  the following information:

 3         (a)  An audited certified financial statement.

 4         (b)  An annual report of financial condition.

 5         (c)  A loss reserve review by a qualified actuary.

 6  

 7  The required information listed in paragraphs (a)-(c) shall be

 8  submitted annually, no later than 7 months after the end of

 9  the group self-insurer's fund year. A request for such

10  dividend or premium refund may not be made before the required

11  information is filed. The request for such dividend or premium

12  refund must include a resolution of the board of trustees of

13  the group self-insurer requesting approval of a specific

14  amount to be distributed. A dividend, premium refund, or

15  premium discount or credit must not discriminate on the basis

16  of continued coverage or continued membership in the group

17  self-insurer. The office department shall review the request

18  and shall issue a decision within 60 days after the filing.

19  Failure to issue a decision within 60 days constitutes an

20  approval of the request. Any dividend or premium refund

21  approved by the office department for distribution which

22  cannot be paid to the applicable member or policyholder or

23  former member or policyholder of the group self-insurer

24  because the former member or policyholder cannot be reasonably

25  located shall become the property of the group self-insurer.

26         (6)  The office department may impose civil penalties

27  not to exceed $100 per occurrence for violations of the

28  provisions of this chapter or rules adopted pursuant hereto.

29         Section 824.  Section 624.4622, Florida Statutes, is

30  amended to read:

31         624.4622  Local government self-insurance funds.--

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 1         (1)  Any two or more local governmental entities may

 2  enter into interlocal agreements for the purpose of securing

 3  the payment of benefits under chapter 440, provided the local

 4  government self-insurance fund that is created must:

 5         (a)  Have annual normal premiums in excess of $5

 6  million;

 7         (b)  Maintain a continuing program of excess insurance

 8  coverage and reserve evaluation to protect the financial

 9  stability of the fund in an amount and manner determined by a

10  qualified and independent actuary;

11         (c)  Submit annually an audited fiscal year-end

12  financial statement by an independent certified public

13  accountant within 6 months after the end of the fiscal year to

14  the office department; and

15         (d)  Have a governing body which is comprised entirely

16  of local elected officials.

17         (2)  A local government self-insurance fund that meets

18  the requirements of this section is not subject to s. 624.4621

19  and is not required to file any report with the office

20  department under s. 440.38(2)(b) which is uniquely required of

21  group self-insurer funds qualified under s. 624.4621. If any

22  of the requirements of this section are not met, the local

23  government self-insurance fund is subject to the requirements

24  of s. 624.4621.

25         Section 825.  Section 624.464, Florida Statutes, is

26  amended to read:

27         624.464  Certificate of authority required;

28  penalties.--

29         (1)  No person shall establish a commercial

30  self-insurance fund unless such fund is issued a certificate

31  of authority by the office department pursuant to s. 624.466.

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 1         (2)(a)  Any person failing to hold a subsisting

 2  certificate of authority from the office department while

 3  operating or maintaining a commercial self-insurance fund

 4  shall be subject to a fine of not less than $5,000 or more

 5  than $10,000 for each violation.

 6         (b)  Any person who operates or maintains a commercial

 7  self-insurance fund without a subsisting certificate of

 8  authority from the office department shall be subject to the

 9  cease and desist penalty powers of the office department as

10  set forth in ss. 626.9571, 626.9581, 626.9591, and 626.9601.

11         (c)  In addition to the penalties and other enforcement

12  provisions of the Florida Insurance Code, the office

13  department is vested with the power to seek both temporary and

14  permanent injunctive relief when:

15         1.  A commercial self-insurance fund is being operated

16  by any person or entity without a subsisting certificate of

17  authority.

18         2.  Any person, entity, or commercial self-insurance

19  fund has engaged in any activity prohibited by the Florida

20  Insurance Code made applicable by ss. 624.460-624.488 or by

21  any rule adopted pursuant thereto.

22         3.  Any commercial self-insurance fund, person, or

23  entity is renewing, issuing, or delivering a policy, contract,

24  certificate, summary plan description, or other evidence of

25  the benefits and coverages provided to members without a

26  subsisting certificate of authority.

27  

28  The office's department's authority to seek injunctive relief

29  shall not be conditioned on having conducted any proceeding

30  pursuant to chapter 120.  The authority vested in the office

31  department by virtue of the operation of this section shall

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 1  not act to reduce any other enforcement remedy or power to

 2  seek injunctive relief that may otherwise be available to the

 3  office department.

 4         Section 826.  Section 624.466, Florida Statutes, is

 5  amended to read:

 6         624.466  Application requirements for certificate of

 7  authority.--All applications for a certificate of authority

 8  for a commercial self-insurance fund shall be on a form

 9  adopted by the commission and furnished by the office

10  department and shall include or have attached the following:

11         (1)  The name of the fund and the location of the

12  fund's principal office, which shall be maintained within this

13  state.

14         (2)  The kinds of insurance initially proposed to be

15  transacted and a copy of each policy, endorsement, and

16  application form it initially proposes to issue or use.

17         (3)  A copy of the constitution, bylaws, or trust

18  agreement which governs the operation of the fund.  The

19  constitution, bylaws, or trust agreement shall contain a

20  provision prohibiting any distribution of surplus funds or

21  profit except to members of the fund, as approved by the

22  office department pursuant to s. 624.473.

23         (4)  The names and addresses of the trustees of the

24  fund.  The office department shall not grant or continue

25  approval as to any fund if the office department determines

26  any trustee to be incompetent or untrustworthy; that any

27  trustee has been found guilty of, or has pled guilty or no

28  contest to, a felony, a crime involving moral turpitude, or a

29  crime punishable by imprisonment of 1 year or more under the

30  law of any state, territory, or country, whether or not a

31  judgment or conviction has been entered; or that any trustee

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 1  has had any type of insurance license revoked in this or any

 2  other state.

 3         (5)  A copy of a properly executed indemnity agreement

 4  binding each fund member to individual, several, and

 5  proportionate liability as set forth in ss. 624.472 and

 6  624.474.

 7         (6)  A plan of risk management which has established

 8  measures and procedures to minimize both the frequency and

 9  severity of losses.

10         (7)  Proof of competent and trustworthy persons to

11  administer or service the fund in the areas of claims

12  adjusting, underwriting, risk management, and loss control.

13         (8)  Membership applications and the name and address

14  of each member applying for coverage and a current financial

15  statement on each member applying for coverage showing the

16  aggregate net worth of all members to be not less than

17  $500,000, a combined ratio of current assets to current

18  liabilities of more than 1 to 1, and a combined working

19  capital of an amount establishing financial strength and

20  liquidity of the businesses to promptly provide for payment of

21  the normal property or casualty claims proposed to be

22  self-insured.

23         (9)(a)  An initial deposit of cash or securities of the

24  type eligible for deposit by insurers under s. 625.52 in the

25  amount of $100,000.

26         1.  All income from deposits shall belong to the fund

27  and shall be transmitted to the fund as it becomes available.

28         2.  No judgment creditor or other claimant of the fund

29  shall have the right to levy upon any of the assets or

30  securities held as a deposit under this section.

31  

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 1         (b)  In lieu of the deposit of cash or securities, a

 2  fund may file with the office department a surety bond in like

 3  amount.  The bond shall be one issued by an authorized surety

 4  insurer, shall be for the same purpose as the deposit in lieu

 5  of which it is filed, and shall be subject to the office's

 6  department's approval.

 7         1.  No bond shall be approved unless it covers

 8  liabilities arising from all policies and contracts issued and

 9  entered into during the time the bond is in effect and unless

10  the office department is satisfied that the bond provides the

11  same degree of security as would be provided by a deposit of

12  securities.

13         2.  No bond shall be canceled or subject to

14  cancellation unless at least 60 days' advance notice thereof

15  in writing is filed with the office department.

16         (c)  Deposits of securities or cash pursuant to this

17  section shall be administered by the office and department in

18  accordance with part III of chapter 625.

19         (10)(a)  Copies of acceptable excess insurance policies

20  written by an insurer or insurers authorized or approved to

21  transact insurance in this state, which excess insurance

22  provides specific and aggregate limits and retention levels

23  satisfactory to the office department in accordance with sound

24  actuarial principles.  The office department may waive this

25  requirement if the fund demonstrates to the satisfaction of

26  the office department that its operation is and will be

27  actuarially sound without obtaining excess insurance.

28         (b)  At least 10 days prior to the proposed effective

29  date of the issuance of any policy, the trustees shall submit

30  proof that the members have paid into a common claims fund in

31  a designated depository cash premiums in an amount of not less

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 1  than $50,000 or 10 percent of the estimated annual premium of

 2  the members at the inception, whichever is greater.

 3         (11)  A copy of a fidelity bond or insurance policy

 4  from an authorized insurer providing coverage in an amount

 5  equal to not less than 10 percent of the funds handled

 6  annually and issued in the name of the fund covering its

 7  trustees, employees, administrator, or other individuals

 8  managing or handling the funds or assets of the fund.  In no

 9  case may such bond or policy be less than $1,000 or more than

10  $500,000, except that the office department may for good cause

11  prescribe an amount in excess of $500,000, subject to the

12  10-percent limitation of the preceding sentence.

13         (12)(a)  A plan of operation designed to provide

14  sufficient revenues to pay current and future liabilities, as

15  determined in accordance with sound actuarial principles.

16         (b)  A statement prepared by an actuary who is a member

17  of the American Academy of Actuaries or the Casualty Actuarial

18  Society establishing that the fund has prepared a plan of

19  operation which is based on sound actuarial principles.  The

20  office department shall not approve the fund unless the office

21  department determines that the plan established by the fund is

22  designed to provide sufficient revenues to pay current and

23  future liabilities, as determined in accordance with sound

24  actuarial principles.

25         (13)  Such additional information as the commission or

26  office department may reasonably requires require.

27         Section 827.  Subsections (1), (4), (6), (8), (9),

28  (10), and (12) of section 624.468, Florida Statutes, are

29  amended to read:

30         624.468  Continuing requirements for certificate of

31  authority.--After issuance of its initial certificate of

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 1  authority a commercial self-insurance fund shall thereafter

 2  meet the following requirements as a condition of maintaining

 3  its certificate of authority:

 4         (1)  Maintenance of competent and trustworthy persons

 5  to service the program, as further specified in s. 624.466(7).

 6  Written notice shall be provided to the office department

 7  before changing the fund's method of fulfilling its servicing

 8  requirements.

 9         (4)  Maintenance of excess insurance in accordance with

10  sound actuarial principles, unless waived by the office

11  department, as further specified in s. 624.466(10).

12         (6)  Maintenance of appropriate funded loss reserves

13  determined in accordance with sound actuarial principles

14  satisfactory to the office department.

15         (8)  Each fund shall have and maintain its principal

16  place of business in this state and shall therein make

17  available to the office department upon reasonable notice

18  complete records of its assets, transactions, and affairs in

19  accordance with such methods and systems as are customary for,

20  or suitable to, the kind or kinds of business transacted.

21         (9)  A fund shall file such reports with the office

22  department as are required by s. 624.470.

23         (10)  A fund shall report to the office department

24  within 15 days of a determination that the actual premiums

25  written or liability assumed or any other factor which

26  substantially contributes to the financial condition of the

27  plan deviates by more than 25 percent from the projections

28  used in the most recent annual report, as required by s.

29  624.470 or, if the first annual report has not yet been filed,

30  projections used in the initial plan of operation.

31  

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 1         (12)  A fund shall maintain records which will confirm

 2  that membership in the fund is in accordance with the

 3  constitution or bylaws of the association as required by s.

 4  624.462(3).  The office department may request from the fund,

 5  not more than annually, a certification which confirms that

 6  all members of the fund are members of the association and are

 7  in compliance with the constitution or bylaws of the

 8  association and may require that the fund submit a plan,

 9  acceptable to the office department, to eliminate membership

10  that does not comply with s. 624.462(3).

11         Section 828.  Paragraph (b) of subsection (1) and

12  subsection (2) of section 624.470, Florida Statutes, are

13  amended to read:

14         624.470  Annual reports.--

15         (1)

16         (b)  For financial statements filed on or after January

17  1, 1998, future investment income may only be reported as an

18  admitted asset by an Assessable Mutual or Self-Insurance Fund

19  which reported future investment income in financial

20  statements filed with the Department of Insurance prior to

21  January 1, 1998.

22         (2)  Every fund shall, annually within 6 months of the

23  end of the fiscal year, file a report with the office

24  department verified by the oath of a member of the board of

25  trustees or by an administrative executive appointed by the

26  board, containing the following information:

27         (a)  A financial statement of the fund, including its

28  balance sheet and a statement of operations for the preceding

29  year certified by an independent certified public accountant.

30         (b)  A report prepared by an actuary who is a member of

31  the American Academy of Actuaries as to the actuarial

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 1  soundness of the fund.  The report shall consist of, but shall

 2  not be limited to, the following:

 3         1.  Adequacy of premiums or contributions in paying

 4  claims and changes, if any, needed in the contribution rates

 5  to achieve or preserve a level of funding deemed adequate,

 6  which shall include a valuation of present assets, based on

 7  statement value, and prospective assets and liabilities of the

 8  plan and the extent of any unfunded accrued liabilities.

 9         2.  A plan to amortize any unfunded liabilities and a

10  description of actions taken to reduce unfunded liabilities.

11         3.  A description and explanation of actuarial

12  assumptions.

13         4.  A schedule illustrating the amortization of any

14  unfunded liabilities.

15         5.  A comparative review illustrating the level of

16  funds available to the commercial self-insurance fund from

17  rates, investment income, and other sources realized over the

18  period covered by the report, indicating the assumptions used.

19         6.  A projection of the following year's plan of

20  operation, including additional number of members, gross

21  premiums to be written, and projected liabilities.

22         7.  A statement by the actuary that the report is

23  complete and accurate and that in her or his opinion the

24  techniques and assumptions used are reasonable and meet the

25  requirements of this subsection.

26         8.  Other factors or statements as may be reasonably

27  required by the office or commission department in order to

28  determine the actuarial soundness of the plan.

29         (c)  Any changes in the constitution, bylaws, or trust

30  agreement of the fund.

31  

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 1         Section 829.  Section 624.473, Florida Statutes, is

 2  amended to read:

 3         624.473  Dividends.--A commercial self-insurance fund

 4  shall obtain the approval of the office department prior to

 5  paying any dividend or refund to its members. No such dividend

 6  or refund may be approved until 12 months after the last day

 7  of the fiscal year for which the dividend or refund is

 8  payable, or such later time as the office department may

 9  require in accordance with sound actuarial principles.

10         Section 830.  Section 624.4741, Florida Statutes, is

11  amended to read:

12         624.4741  Venue in assessment actions.--In any action

13  brought by a self-insurance fund to collect assessments levied

14  under this chapter, venue lies where the fund maintains its

15  principal place of business or, if the department, the office,

16  or the Florida Group Self-Insurers Guaranty Association is a

17  party to such action, in the Circuit Court of Leon County.

18         Section 831.  Subsections (2), (3), and (4) of section

19  624.476, Florida Statutes, are amended to read:

20         624.476  Impaired self-insurance funds.--

21         (2)  If any fund levies an assessment pursuant to

22  subsection (1), the office department shall require the fund

23  to consent to administrative supervision under part VI of this

24  chapter. The office department may waive the requirement to

25  consent to administrative supervision for good cause.

26         (3)  If the trustees fail to make an assessment as

27  required by subsection (1), the office department shall order

28  the trustees to do so. If the deficiency is not sufficiently

29  made up within 60 days after the date of the order, the fund

30  shall be deemed insolvent and grounds shall exist to proceed

31  against the fund as provided for in part I of chapter 631.

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 1         (4)  Notwithstanding the requirement of the fund to

 2  make an assessment pursuant to subsection (1) or subsection

 3  (3), the office department may at any time request that the

 4  department to be appointed receiver for purposes of

 5  rehabilitation or liquidation if it is able to demonstrate

 6  that any grounds for rehabilitation or liquidation exist

 7  pursuant to s. 631.051 or s. 631.061.

 8         Section 832.  Section 624.477, Florida Statutes, is

 9  amended to read:

10         624.477  Liquidation, rehabilitation, reorganization,

11  and conservation.--Any rehabilitation, liquidation,

12  conservation, or dissolution of a self-insurance fund shall be

13  conducted under the supervision of the office and department,

14  which shall each have all power with respect thereto granted

15  to the fund under part I of chapter 631 governing the

16  rehabilitation, liquidation, conservation, or dissolution of

17  insurers and including all grounds for the appointment of a

18  receiver contained in ss. 631.051 and 631.061.

19         Section 833.  Section 624.480, Florida Statutes, is

20  amended to read:

21         624.480  Filing, approval, and disapproval of forms.--

22         (1)  A basic insurance policy or application form for

23  which written application is required and is to be a part of

24  the policy or contract or printed rider or endorsement form

25  may not be issued by a self-insurance fund unless the form has

26  been filed with and approved by the office department.

27         (2)  Every such filing shall be made not less than 30

28  days in advance of any such use or delivery. At the expiration

29  of such 30 days, the form so filed shall be deemed approved

30  unless prior thereto it has been affirmatively approved or

31  disapproved by order of the office department. The office

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 1  department may extend by not more than an additional 15 days

 2  the period within which it may so affirmatively approve or

 3  disapprove any such form, by giving notice of such extension

 4  before expiration of the initial 30-day period. At the

 5  expiration of any such period as so extended, and in the

 6  absence of such prior affirmative approval or disapproval, any

 7  such form must be deemed approved.

 8         (3)  The office department shall disapprove any form or

 9  withdraw any previous approval thereof only, if the form:

10         (a)  Is in any respect in violation of, or does not

11  comply with, this code.

12         (b)  Contains or incorporates by reference, when such

13  incorporation is otherwise permissible, any inconsistent,

14  ambiguous, or misleading clauses, or any exceptions and

15  conditions which deceptively affect the risk purported to be

16  assumed in the general coverage of the contract.

17         (c)  Has any title, heading, or other indication of its

18  provisions which is misleading.

19         (d)  Is printed or otherwise reproduced in such manner

20  as to render any material provision of such form substantially

21  illegible.

22         Section 834.  Subsections (1), (5), (6), (7), and (8)

23  of section 624.482, Florida Statutes, are amended to read:

24         624.482  Making and use of rates.--

25         (1)  With respect to all classes of insurance which a

26  self-insurance fund underwrites, the rates must not be

27  excessive, inadequate, or unfairly discriminatory. In

28  determining what rates, including credits and surcharges, are

29  excessive, inadequate, or unfairly discriminatory, the office

30  department shall apply the same standards applicable to other

31  insurers regulated by the office department.

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 1         (5)  If the office department determines that the

 2  continued use of a rate for a coverage endangers the solvency

 3  of the fund, it may issue an order requiring the rate to be

 4  increased or requiring the fund to limit or cease writing the

 5  coverage.

 6         (6)  A fund shall have the burden of proving that a

 7  rate filed is adequate if, during the first 5 years of issuing

 8  policies, the fund files a rate that is below the rate for

 9  loss and loss adjustment expenses for the same type and

10  classification of insurance that has been filed by the

11  Insurance Services Office and approved by the office

12  department.

13         (7)  Nothing herein shall be construed to prohibit the

14  office department from examining a fund pursuant to s.

15  624.3161.

16         (8)  A self-insurance fund shall file its rates,

17  including credits and surcharge schedules, with the office

18  department for approval pursuant to the standards of this

19  section and the procedures of s. 624.480(2).

20         Section 835.  Section 624.484, Florida Statutes, is

21  amended to read:

22         624.484  Registration of agent.--A self-insurance fund

23  shall register with and designate the Chief Financial Officer

24  Insurance Commissioner as its agent solely for the purpose of

25  receiving service of legal documents or process.

26         Section 836.  Section 624.486, Florida Statutes, is

27  amended to read:

28         624.486  Examination.--Self-insurance funds licensed

29  under ss. 624.460-624.488 are subject to periodic examination

30  by the office department in the same manner and subject to the

31  

                                 985

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 1  same terms and conditions applicable to insurers under part II

 2  of this chapter.

 3         Section 837.  Section 624.487, Florida Statutes, is

 4  amended to read:

 5         624.487  Enforcement of specified insurance provisions;

 6  adoption of rules.--The office department may enforce, with

 7  respect to group self-insurance funds established or operated

 8  under s. 624.4621, the provisions of s. 624.316, s. 624.424,

 9  s. 625.091, or s. 625.305 as they relate to workers'

10  compensation insurers, and the commission may adopt rules to

11  implement the enforcement authority granted by this section.

12         Section 838.  Section 624.501, Florida Statutes, is

13  amended to read:

14         624.501  Filing, license, appointment, and

15  miscellaneous fees.--The department, commission, or office, as

16  appropriate, shall collect in advance, and persons so served

17  shall pay to it in advance, fees, licenses, and miscellaneous

18  charges as follows:

19         (1)  Certificate of authority of insurer.

20         (a)  Filing application for original certificate of

21  authority or modification thereof as a result of a merger,

22  acquisition, or change of controlling interest due to a sale

23  or exchange of stock, including all documents required to be

24  filed therewith, filing fee..........................$1,500.00

25         (b)  Reinstatement fee...........................$50.00

26         (2)  Charter documents of insurer.

27         (a)  Filing articles of incorporation or other charter

28  documents, other than at time of application for original

29  certificate of authority, filing fee....................$10.00

30  

31  

                                 986

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 1         (b)  Filing amendment to articles of incorporation or

 2  charter, other than at time of application for original

 3  certificate of authority, filing fee.....................$5.00

 4         (c)  Filing bylaws, when required, or amendments

 5  thereof, filing fee......................................$5.00

 6         (3)  Annual license tax of insurer, each domestic

 7  insurer, foreign insurer, and alien insurer (except that, as

 8  to fraternal benefit societies insuring less than 200 members

 9  in this state and the members of which as a prerequisite to

10  membership possess a physical handicap or disability, such

11  license tax shall be $25)............................$1,000.00

12         (4)  Statements of insurer, filing (except when filed

13  as part of application for original certificate of authority),

14  filing fees:

15         (a)  Annual statement...........................$250.00

16         (b)  Quarterly statement........................$250.00

17         (5)  All insurance representatives, application for

18  license, each filing, filing fee........................$50.00

19         (6)  Insurance representatives, property, marine,

20  casualty, and surety insurance.

21         (a)  Agent's original appointment and biennial renewal

22  or continuation thereof, each insurer:

23         Appointment fee..................................$42.00

24         State tax.........................................12.00

25         County tax.........................................6.00

26  Total...................................................$60.00

27         (b)  Solicitor's or customer representative's original

28  appointment and biennial renewal or continuation thereof:

29         Appointment fee..................................$42.00

30         State tax.........................................12.00

31         County tax.........................................6.00

                                 987

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 1  Total...................................................$60.00

 2         (c)  Nonresident agent's original appointment and

 3  biennial renewal or continuation thereof, appointment fee,

 4  each insurer............................................$60.00

 5         (d)  Service representatives; managing general agents.

 6         Original appointment and biennial renewal or

 7  continuation thereof, each insurer or managing general agent,

 8  whichever is applicable.................................$60.00

 9         (7)  Life insurance agents.

10         (a)  Agent's original appointment and biennial renewal

11  or continuation thereof, each insurer:

12         Appointment fee..................................$42.00

13         State tax.........................................12.00

14         County tax.........................................6.00

15  Total...................................................$60.00

16         (b)  Nonresident agent's original appointment and

17  biennial renewal or continuation thereof, appointment fee,

18  each insurer............................................$60.00

19         (8)  Health insurance agents.

20         (a)  Agent's original appointment and biennial renewal

21  or continuation thereof, each insurer:

22         Appointment fee..................................$42.00

23         State tax.........................................12.00

24         County tax.........................................6.00

25  Total...................................................$60.00

26         (b)  Nonresident agent's original appointment and

27  biennial renewal or continuation thereof, appointment fee,

28  each insurer............................................$60.00

29         (9)  All limited appointments as agent, as provided for

30  in s. 626.321.  Agent's original appointment and biennial

31  renewal or continuation thereof, each insurer:

                                 988

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 1         Appointment fee..................................$42.00

 2         State tax.........................................12.00

 3         County tax.........................................6.00

 4  Total...................................................$60.00

 5         (10)  Fraternal benefit society agents.  Original

 6  appointment and biennial renewal or continuation thereof, each

 7  insurer:

 8         Appointment fee..................................$42.00

 9         State tax.........................................12.00

10         County tax.........................................6.00

11  Total...................................................$60.00

12         (11)  Surplus lines agent.  Agent's appointment and

13  biennial renewal or continuation thereof, appointment fee

14  .......................................................$150.00

15         (12)  Adjusters:

16         (a)  Adjuster's original appointment and biennial

17  renewal or continuation thereof, appointment fee........$60.00

18         (b)  Nonresident adjuster's original appointment and

19  biennial renewal or continuation thereof, appointment fee

20  ........................................................$60.00

21         (c)  Emergency adjuster's license, appointment fee

22  ........................................................$10.00

23         (d)  Fee to cover actual cost of credit report, when

24  such report must be secured by office department.

25         (13)  Examination--Fee to cover actual cost of

26  examination.

27         (14)  Temporary license and appointment as agent or

28  adjuster, where expressly provided for, rate of fee for each

29  month of the period for which the license and appointment is

30  issued...................................................$5.00

31  

                                 989

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 1         (15)  Issuance, reissuance, reinstatement, modification

 2  resulting in a modified license being issued, duplicate copy

 3  of any insurance representative license, or an appointment

 4  being reinstated.........................................$5.00

 5         (16)  Additional appointment continuation fees as

 6  prescribed in chapter 626................................$5.00

 7         (17)  Filing application for permit to form insurer as

 8  referred to in chapter 628, filing fee..................$25.00

 9         (18)  Annual license fee of rating organization, each

10  domestic or foreign organization........................$25.00

11         (19)  Miscellaneous services:

12         (a)  For copies of documents or records on file with

13  the department, commission, or office per page...........$ .50

14         (b)  For each certificate of the department,

15  commission, or office under its seal, authenticating any

16  document or other instrument (other than a license or

17  certificate of authority)................................$5.00

18         (c)  For preparing lists of agents, solicitors,

19  adjusters, and other insurance representatives, and for other

20  miscellaneous services, such reasonable charge as may be fixed

21  by the office or department.

22         (d)  For processing requests for approval of continuing

23  education courses, processing fee......................$100.00

24         (e)  Insurer's registration fee for agent exchanging

25  business more than 24 times in calendar year under s. 626.752,

26  s. 626.793, or s. 626.837, registration fee per agent per year

27  ........................................................$30.00

28         (20)  Insurance agency or adjusting firm, 3-year

29  license.................................................$60.00

30         (21)  Limited surety agent or professional bail bond

31  agent, as defined in s. 648.25, each agent and each insurer

                                 990

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 1  represented. Original appointment and biennial renewal or

 2  continuation thereof, each agent or insurer, whichever is

 3  applicable:

 4         Appointment fee..................................$44.00

 5         State tax.........................................24.00

 6         County tax........................................12.00

 7  Total...................................................$80.00

 8         (22)  Certain military installations, as authorized

 9  under s. 626.322:  original appointment and biennial renewal

10  or continuation thereof, each insurer...................$20.00

11         (23)  Filing application for original certificate of

12  authority for third-party administrator or original

13  certificate of approval for a service company, including all

14  documents required to be filed therewith, filing fee...$100.00

15         (24)  Fingerprinting processing fee--Fee to cover

16  fingerprint processing.

17         (25)  Sales representatives, miscellaneous lines.

18  Original appointment and biennial renewal or continuation

19  thereof, appointment fee................................$60.00

20         (26)  Reinsurance intermediary:

21         (a)  Application filing and license fee..........$50.00

22         (b)  Original appointment and biennial renewal or

23  continuation thereof, appointment fee...................$60.00

24         (27)  Title insurance agents:

25         (a)  Agent's original appointment or biennial renewal

26  or continuation thereof, each insurer:

27         Appointment fee..................................$42.00

28         State tax.........................................12.00

29         County tax.........................................6.00

30  Total...................................................$60.00

31  

                                 991

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 1         (b)  Agency original appointment or biennial renewal or

 2  continuation thereof, each insurer:

 3         Appointment fee..................................$42.00

 4         State tax.........................................12.00

 5         County tax.........................................6.00

 6  Total...................................................$60.00

 7         (c)  Filing for title insurance agent's license:

 8         Application for filing, each filing, filing fee..$10.00

 9         (d)  Additional appointment continuation fee as

10  prescribed by s. 626.843.................................$5.00

11         (e)  Title insurer and title insurance agency

12  administrative surcharge:

13         1.  On or before January 30 of each calendar year, each

14  title insurer shall pay to the office department for each

15  licensed title insurance agency appointed by the title insurer

16  and for each retail office of the insurer on January 1 of that

17  calendar year an administrative surcharge of $200.00.

18         2.  On or before January 30 of each calendar year, each

19  licensed title insurance agency shall remit to the department

20  an administrative surcharge of $200.00.

21  

22  The administrative surcharge may be used solely to defray the

23  costs to the department and office in their its examination or

24  audit of title insurance agencies and retail offices of title

25  insurers and to gather title insurance data for statistical

26  purposes to be furnished to and used by the office in its

27  regulation of title insurance.

28         Section 839.  Subsection (1) of section 624.5015,

29  Florida Statutes, is amended to read:

30         624.5015  Advance collection of fees and taxes; title

31  insurers not to pay without reimbursement.--

                                 992

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 1         (1)  The department or the office of Insurance shall

 2  collect in advance from the applicant or licensee fees and

 3  taxes as provided in s. 624.501.

 4         Section 840.  Section 624.502, Florida Statutes, is

 5  amended to read:

 6         624.502  Service of process fee.--In all instances as

 7  provided in any section of the insurance code and s. 48.151(3)

 8  in which service of process is authorized to be made upon the

 9  Chief Financial Officer or the director of the office

10  Insurance Commissioner and Treasurer, the plaintiff shall pay

11  to the department or office a fee of $15 for such service of

12  process, which fee shall be deposited into the Insurance

13  Commissioner's Regulatory Trust Fund.

14         Section 841.  Subsections (1) and (3) of section

15  624.506, Florida Statutes, are amended to read:

16         624.506  County tax; deposit and remittance.--

17         (1)  The department Insurance Commissioner and

18  Treasurer shall deposit in the Agents and Solicitors County

19  Tax Trust Fund all moneys accepted as county tax under this

20  part. She or he shall keep a separate account for all moneys

21  so collected for each county and, after deducting therefrom

22  the service charges provided for in s. 215.20, shall remit the

23  balance to the counties.

24         (3)  The Chief Financial Officer Comptroller shall

25  annually, as of January 1 following the date of collection,

26  and thereafter at such other times as she or he the Insurance

27  Commissioner and Treasurer may elect, draw her or his warrants

28  on the State Treasury payable to the respective counties

29  entitled to receive the same for the full net amount of such

30  taxes to each county.

31  

                                 993

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 1         Section 842.  Paragraph (b) of subsection (5) of

 2  section 624.509, Florida Statutes, is amended to read:

 3         624.509  Premium tax; rate and computation.--

 4         (5)  There shall be allowed a credit against the net

 5  tax imposed by this section equal to 15 percent of the amount

 6  paid by the insurer in salaries to employees located or based

 7  within this state and who are covered by the provisions of

 8  chapter 443. For purposes of this subsection:

 9         (b)  The term "employees" does not include independent

10  contractors or any person whose duties require that the person

11  hold a valid license under the Florida Insurance Code, except

12  persons defined in s. 626.015(1), (15) (16), and  (17) (18).

13         Section 843.  Subsection (5) of section 624.5091,

14  Florida Statutes, is amended to read:

15         624.5091  Retaliatory provision, insurers.--

16         (5)  The excess amount of all fees, licenses, and taxes

17  collected by the Department of Revenue under this section over

18  the amount of similar fees, licenses, and taxes provided for

19  in this part, together with all fines, penalties, or other

20  monetary obligations collected under this section and ss.

21  626.711 and 626.743 exclusive of such fees, licenses, and

22  taxes, shall be deposited by the Department of Revenue to the

23  credit of the Insurance Commissioner's Regulatory Trust Fund;

24  provided that such excess amount shall not exceed $125,000 for

25  1992, and for any subsequent year shall not exceed $125,000

26  adjusted annually by the lesser of 20 percent or the growth in

27  the total of such excess amount.  The remainder of such excess

28  amount shall be deposited into the General Revenue Fund.

29         Section 844.  Subsection (1) of section 624.5092,

30  Florida Statutes, is amended to read:

31         624.5092  Administration of taxes; payments.--

                                 994

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 1         (1)  The Department of Revenue shall administer, audit,

 2  and enforce the assessment and collection of those taxes to

 3  which this section is applicable. The office and department

 4  may Department of Insurance is authorized to share information

 5  with the Department of Revenue as necessary to verify premium

 6  tax or other tax liability arising under such taxes and

 7  credits which may apply thereto.

 8         Section 845.  Section 624.516, Florida Statutes, is

 9  amended to read:

10         624.516  State Fire Marshal regulatory assessment and

11  surcharge; deposit and use of funds.--

12         (1)  The regulatory assessment imposed under s.

13  624.515(1) and the surcharge imposed under s. 624.515(2) shall

14  be deposited by the Department of Revenue, when received and

15  audited, into the Insurance Commissioner's Regulatory Trust

16  Fund.

17         (2)  The moneys received and deposited in the funds, as

18  provided in subsection (1), are appropriated for use by the

19  Chief Financial Officer State Treasurer as ex officio State

20  Fire Marshal, hereinafter referred to as "State Fire Marshal,"

21  to defray the expenses of the State Fire Marshal in the

22  discharge of her or his administrative and regulatory powers

23  and duties as prescribed by law, including the maintaining of

24  offices and necessary supplies therefor, essential equipment

25  and other materials, salaries and expenses of required

26  personnel, and all other legitimate expenses relating to the

27  discharge of the administrative and regulatory powers and

28  duties imposed in and charged to her or him under such laws.

29         (3)  If, at the end of any fiscal year, a balance of

30  funds remains in the Insurance Commissioner's Regulatory Trust

31  Fund, such balance shall not revert to the general fund of the

                                 995

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 1  state, but shall be retained in the Insurance Commissioner's

 2  Regulatory Trust Fund to be used for the purposes for which

 3  the moneys are appropriated as set forth in subsection (2).

 4         Section 846.  Section 624.517, Florida Statutes, is

 5  amended to read:

 6         624.517  State Fire Marshal regulatory assessment;

 7  reduction of assessment.--

 8         (1)  The office Department of Insurance shall ascertain

 9  on or before December 1 of each year whether the amounts

10  estimated to be received from the regulatory assessment

11  imposed under s. 624.515 for that calendar year, payable on or

12  before the following March 1, as herein prescribed, shall

13  result in an accumulation of funds in excess of the just

14  requirements for which the assessment is imposed as set forth

15  in s. 624.516; and if it determines that the imposition of the

16  full amount of the assessment would result in such excess, it

17  may reduce the percentage amount of the assessment for that

18  calendar year to such percentage as may be necessary to meet

19  the just requirements for which the assessment is imposed.

20         (2)  When a determination is made so reducing the

21  amount of the assessment, the department shall make and issue

22  its order setting forth such determination and fixing the

23  amount of assessment for that calendar year, payable on or

24  before March 1 of the following year, and shall mail a copy of

25  such order to each insurer who, according to the records of

26  the office department, is subject to the assessment.

27         Section 847.  Section 624.519, Florida Statutes, is

28  amended to read:

29         624.519  Nonpayment of premium tax or fire marshal

30  assessment; penalty.--If any insurer fails to pay to the

31  Department of Revenue on or before March 1 in each and every

                                 996

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 1  year any premium taxes required of it under s. 624.509 or s.

 2  624.510, or any state fire marshal regulatory assessment

 3  required of it under s. 624.515 or s. 624.517, the office

 4  Department of Insurance may revoke its certificate of

 5  authority.

 6         Section 848.  Subsection (1) of section 624.521,

 7  Florida Statutes, is amended to read:

 8         624.521  Deposit of certain tax receipts; refund of

 9  improper payments.--

10         (1)  The Department of Financial Services Insurance

11  shall promptly deposit in the State Treasury to the credit of

12  the Insurance Commissioner's Regulatory Trust Fund all "state

13  tax" portions of agents' and solicitors' licenses collected

14  under s. 624.501 necessary to fund the Division of Insurance

15  Fraud. The balance of the tax shall be credited to the General

16  Fund. All moneys received by the Department of Financial

17  Services or the office Insurance not in accordance with the

18  provisions of this code or not in the exact amount as

19  specified by the applicable provisions of this code shall be

20  returned to the remitter. The records of the department or

21  office shall show the date and reason for such return.

22         Section 849.  Section 624.523, Florida Statutes, is

23  amended to read:

24         624.523  Insurance Commissioner's Regulatory Trust

25  Fund.--

26         (1)  There is created in the State Treasury a trust

27  fund designated "Insurance Commissioner's Regulatory Trust

28  Fund" to which shall be credited all payments received on

29  account of the following items:

30  

31  

                                 997

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 1         (a)  All fines, monetary penalties, and costs imposed

 2  upon persons by the department or the office as authorized by

 3  law for violation of the laws of this state.

 4         (b)  Any sums received for copies of the stenographic

 5  record of hearings, as authorized by law.

 6         (c)  All sums received under s. 624.404(5).

 7         (d)  All sums received under s. 624.5091, as provided

 8  in subsection (5) thereof.

 9         (e)  All payments received on account of items provided

10  for under respective provisions of s. 624.501, as follows:

11         1.  Subsection (1) (certificate of authority of

12  insurer).

13         2.  Subsection (2) (charter documents of insurer).

14         3.  Subsection (3) (annual license tax of insurer).

15         4.  Subsection (4) (annual statement of insurer).

16         5.  Subsection (5) (application fee for insurance

17  representatives).

18         6.  The "appointment fee" portion of any appointment

19  provided for under paragraphs (6)(a) and (b) (insurance

20  representatives, property, marine, casualty and surety

21  insurance, and agents).

22         7.  Paragraph (6)(c) (nonresident agents).

23         8.  Paragraph (6)(d) (service representatives).

24         9.  The "appointment fee" portion of any appointment

25  provided for under paragraph (7)(a) (life insurance agents,

26  original appointment, and renewal or continuation of

27  appointment).

28         10.  Paragraph (7)(b) (nonresident agent license).

29         11.  The "appointment fee" portion of any appointment

30  provided for under paragraph (8)(a) (health insurance agents,

31  agent's appointment, and renewal or continuation fee).

                                 998

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 1         12.  Paragraph (8)(b) (nonresident agent appointment).

 2         13.  The "appointment fee" portion of any appointment

 3  provided for under subsections (9) and (10) (limited licenses

 4  and fraternal benefit society agents).

 5         14.  Subsection (11) (vending machines).

 6         15.  Subsection (12) (surplus lines agent).

 7         16.  Subsection (13) (adjusters' appointment).

 8         17.  Subsection (14) (examination fee).

 9         18.  Subsection (15) (temporary license and appointment

10  as agent or adjuster).

11         19.  Subsection (16) (reissuance, reinstatement, etc.).

12         20.  Subsection (17) (additional license continuation

13  fees).

14         21.  Subsection (18) (filing application for permit to

15  form insurer).

16         22.  Subsection (19) (license fee of rating

17  organization).

18         23.  Subsection (20) (miscellaneous services).

19         24.  Subsection (21) (insurance agencies).

20         (f)  All payments received on account of actuarial and

21  other services in the valuation or computation of the reserves

22  of life insurers pursuant to s. 625.121(2).

23         (g)  All sums received under ss. 626.711 and 626.743.

24         (h)  Sums received under s. 626.932, as provided in

25  subsection (5) thereof.

26         (i)  Sums received under s. 626.938, as provided in

27  subsection (7) thereof.

28         (j)  All sums received under s. 627.828.

29         (k)  All sums received from motor vehicle service

30  agreement companies under s. 634.221.

31  

                                 999

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 1         (l)  All sums received under s. 648.27 (bail bond

 2  agent, limited surety agent, continuation fee), the

 3  "appointment fee" portion of any license or permit provided

 4  for under s. 648.31, and the application fees provided for

 5  under s. 648.34(3) ss. 648.34(3) and 648.37(3).

 6         (m)  All sums received under s. 651.015.

 7         (n)  All sums received by the Chief Financial Officer

 8  or the director of the office Insurance Commissioner and

 9  Treasurer as fees for her or his services as

10  service-of-process agent.

11         (o)  All state tax portions of agents' licenses

12  collected under s. 624.501.

13         (2)  The moneys so received and deposited in this

14  regulatory trust fund are hereby appropriated for use by the

15  department and the office to defray the expenses of the

16  department and the office in the discharge of their its

17  administrative and regulatory powers and duties as prescribed

18  by law.

19         Section 850.  Paragraph (q) of section 624.6012,

20  Florida Statutes, is amended to read:

21         624.6012  "Lines of insurance" defined.--Kinds of

22  insurance shall be classified into "lines of insurance." The

23  commission department shall adopt by rule the lines of

24  insurance to be utilized.  Such lines of insurance shall be

25  consistent with the reporting requirements of the National

26  Association of Insurance Commissioners.

27         Section 851.  Paragraph (q) of subsection (1) of

28  section 624.605, Florida Statutes, is amended to read:

29         624.605  "Casualty insurance" defined.--

30         (1)  "Casualty insurance" includes:

31  

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 1         (q)  Miscellaneous.--When first approved by the office

 2  department as not being contrary to law or public policy nor

 3  covered by any other kind of insurance as defined in the code,

 4  insurance against liability for any other kind of loss or

 5  damage to person or property, properly a subject of insurance

 6  and not within any other kind of insurance as defined in this

 7  code.

 8         Section 852.  Subsection (3) of section 624.607,

 9  Florida Statutes, is amended to read:

10         624.607  "Marine insurance," "wet marine and

11  transportation insurance," and "inland marine insurance"

12  defined.--

13         (3)  For the purposes of this code, "inland marine

14  insurance" is as established by general custom of the

15  insurance business and promulgated by rule of the commission

16  department.

17         Section 853.  Subsection (6) of section 624.609,

18  Florida Statutes, is amended to read:

19         624.609  Limit of risk.--

20         (6)  "Surplus to policyholders" for the purposes of

21  this section, in addition to the insurer's capital and

22  surplus, shall be deemed to include any voluntary reserves

23  which are not required pursuant to law and shall be determined

24  from the last sworn statement of the insurer on file with the

25  office department, or by the last report of examination of the

26  insurer, whichever is the more recent at time of assumption of

27  risk.

28         Section 854.  Subsections (1), (3), (4), (5), (7),

29  (11), (12), and (14) of section 624.610, Florida Statutes, are

30  amended to read:

31         624.610  Reinsurance.--

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 1         (1)  The purpose of this section is to protect the

 2  interests of insureds, claimants, ceding insurers, assuming

 3  insurers, and the public.  It is the intent of the Legislature

 4  to ensure adequate regulation of insurers and reinsurers and

 5  adequate protection for those to whom they owe obligations.

 6  In furtherance of that state interest, the Legislature

 7  requires that upon the insolvency of a non-United States

 8  insurer or reinsurer which provides security to fund its

 9  United States obligations in accordance with this section,

10  such security shall be maintained in the United States and

11  claims shall be filed with and valued by the state insurance

12  regulator Commissioner with regulatory oversight, and the

13  assets shall be distributed in accordance with the insurance

14  laws of the state in which the trust is domiciled that are

15  applicable to the liquidation of domestic United States

16  insurance companies.  The Legislature declares that the

17  matters contained in this section are fundamental to the

18  business of insurance in accordance with 15 U.S.C. ss.

19  1011-1012.

20         (3)(a)  Credit must be allowed when the reinsurance is

21  ceded to an assuming insurer that is authorized to transact

22  insurance or reinsurance in this state.

23         (b)1.  Credit must be allowed when the reinsurance is

24  ceded to an assuming insurer that is accredited as a reinsurer

25  in this state. An accredited reinsurer is one that:

26         a.  Files with the office department evidence of its

27  submission to this state's jurisdiction;

28         b.  Submits to this state's authority to examine its

29  books and records;

30         c.  Is licensed or authorized to transact insurance or

31  reinsurance in at least one state or, in the case of a United

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 1  States branch of an alien assuming insurer, is entered

 2  through, licensed, or authorized to transact insurance or

 3  reinsurance in at least one state;

 4         d.  Files annually with the office department a copy of

 5  its annual statement filed with the insurance department of

 6  its state of domicile any quarterly statements if required by

 7  its state of domicile or such quarterly statements if

 8  specifically requested by the office department, and a copy of

 9  its most recent audited financial statement; and

10         (I)  Maintains a surplus as regards policyholders in an

11  amount not less than $20 million and whose accreditation has

12  not been denied by the office department within 90 days after

13  its submission; or

14         (II)  Maintains a surplus as regards policyholders in

15  an amount not less than $20 million and whose accreditation

16  has been approved by the office department.

17         2.  The office department may deny or revoke an

18  assuming insurer's accreditation if the assuming insurer does

19  not submit the required documentation pursuant to subparagraph

20  1., if the assuming insurer fails to meet all of the standards

21  required of an accredited reinsurer, or if the assuming

22  insurer's accreditation would be hazardous to the

23  policyholders of this state. In determining whether to deny or

24  revoke accreditation, the office department may consider the

25  qualifications of the assuming insurer with respect to all the

26  following subjects:

27         a.  Its financial stability;

28         b.  The lawfulness and quality of its investments;

29         c.  The competency, character, and integrity of its

30  management;

31  

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 1         d.  The competency, character, and integrity of persons

 2  who own or have a controlling interest in the assuming

 3  insurer; and

 4         e.  Whether claims under its contracts are promptly and

 5  fairly adjusted and are promptly and fairly paid in accordance

 6  with the law and the terms of the contracts.

 7         3.  Credit must not be allowed a ceding insurer if the

 8  assuming insurer's accreditation has been revoked by the

 9  office department after notice and the opportunity for a

10  hearing.

11         4.  The actual costs and expenses incurred by the

12  office department to review a reinsurer's request for

13  accreditation and subsequent reviews must be charged to and

14  collected from the requesting reinsurer. If the reinsurer

15  fails to pay the actual costs and expenses promptly when due,

16  the office department may refuse to accredit the reinsurer or

17  may revoke the reinsurer's accreditation.

18         (c)1.  Credit must be allowed when the reinsurance is

19  ceded to an assuming insurer that maintains a trust fund in a

20  qualified United States financial institution, as defined in

21  paragraph (5)(b), for the payment of the valid claims of its

22  United States ceding insurers and their assigns and successors

23  in interest. To enable the office department to determine the

24  sufficiency of the trust fund, the assuming insurer shall

25  report annually to the office department information

26  substantially the same as that required to be reported on the

27  NAIC Annual Statement form by authorized insurers. The

28  assuming insurer shall submit to examination of its books and

29  records by the office department and bear the expense of

30  examination.

31  

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 1         2.a.  Credit for reinsurance must not be granted under

 2  this subsection unless the form of the trust and any

 3  amendments to the trust have been approved by:

 4         (I)  The insurance regulator commissioner of the state

 5  in which the trust is domiciled; or

 6         (II)  The insurance regulator commissioner of another

 7  state who, pursuant to the terms of the trust instrument, has

 8  accepted principal regulatory oversight of the trust.

 9         b.  The form of the trust and any trust amendments must

10  be filed with the insurance regulator commissioner of every

11  state in which the ceding insurer beneficiaries of the trust

12  are domiciled. The trust instrument must provide that

13  contested claims are valid and enforceable upon the final

14  order of any court of competent jurisdiction in the United

15  States. The trust must vest legal title to its assets in its

16  trustees for the benefit of the assuming insurer's United

17  States ceding insurers and their assigns and successors in

18  interest. The trust and the assuming insurer are subject to

19  examination as determined by the insurance regulator

20  commissioner.

21         c.  The trust remains in effect for as long as the

22  assuming insurer has outstanding obligations due under the

23  reinsurance agreements subject to the trust. No later than

24  February 28 of each year, the trustee of the trust shall

25  report to the insurance regulator commissioner in writing the

26  balance of the trust and list the trust's investments at the

27  preceding year end, and shall certify that the trust will not

28  expire prior to the following December 31.

29         3.  The following requirements apply to the following

30  categories of assuming insurer:

31  

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 1         a.  The trust fund for a single assuming insurer

 2  consists of funds in trust in an amount not less than the

 3  assuming insurer's liabilities attributable to reinsurance

 4  ceded by United States ceding insurers, and, in addition, the

 5  assuming insurer shall maintain a trusteed surplus of not less

 6  than $20 million. The funds in the trust and trusteed surplus

 7  consist of assets of a quality substantially similar to that

 8  required in part II of chapter 625.

 9         b.(I)  In the case of a group including incorporated

10  and individual unincorporated underwriters:

11         (A)  For reinsurance ceded under reinsurance agreements

12  with an inception, amendment, or renewal date on or after

13  August 1, 1995, the trust consists of a trusteed account in an

14  amount not less than the group's several liabilities

15  attributable to business ceded by United States domiciled

16  ceding insurers to any member of the group;

17         (B)  For reinsurance ceded under reinsurance agreements

18  with an inception date on or before July 31, 1995, and not

19  amended or renewed after that date, notwithstanding the other

20  provisions of this section, the trust consists of a trusteed

21  account in an amount not less than the group's several

22  insurance and reinsurance liabilities attributable to business

23  written in the United States; and

24         (C)  In addition to these trusts, the group shall

25  maintain in trust a trusteed surplus of which $100 million

26  must be held jointly for the benefit of the United States

27  domiciled ceding insurers of any member of the group for all

28  years of account.

29         (II)  The incorporated members of the group must not be

30  engaged in any business other than underwriting of a member of

31  the group, and are subject to the same level of regulation and

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 1  solvency control by the group's domiciliary regulator as the

 2  unincorporated members.

 3         (III)  Within 90 days after its financial statements

 4  are due to be filed with the group's domiciliary regulator,

 5  the group shall provide to the insurance regulator

 6  commissioner an annual certification by the group's

 7  domiciliary regulator of the solvency of each underwriter

 8  member or, if a certification is unavailable, financial

 9  statements, prepared by independent public accountants, of

10  each underwriter member of the group.

11         (d)  Credit must be allowed when the reinsurance is

12  ceded to an assuming insurer not meeting the requirements of

13  paragraph (a), paragraph (b), or paragraph (c), but only as to

14  the insurance of risks located in jurisdictions in which the

15  reinsurance is required to be purchased by a particular entity

16  by applicable law or regulation of that jurisdiction.

17         (e)  If the assuming insurer is not authorized or

18  accredited to transact insurance or reinsurance in this state

19  pursuant to paragraph (a) or paragraph (b), the credit

20  permitted by paragraph (c) must not be allowed unless the

21  assuming insurer agrees in the reinsurance agreements:

22         1.a.  That in the event of the failure of the assuming

23  insurer to perform its obligations under the terms of the

24  reinsurance agreement, the assuming insurer, at the request of

25  the ceding insurer, shall submit to the jurisdiction of any

26  court of competent jurisdiction in any state of the United

27  States, will comply with all requirements necessary to give

28  the court jurisdiction, and will abide by the final decision

29  of the court or of any appellate court in the event of an

30  appeal; and

31  

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 1         b.  To designate the Chief Financial Officer

 2  commissioner, pursuant to s. 48.151, or a designated attorney

 3  as its true and lawful attorney upon whom may be served any

 4  lawful process in any action, suit, or proceeding instituted

 5  by or on behalf of the ceding company.

 6         2.  This paragraph is not intended to conflict with or

 7  override the obligation of the parties to a reinsurance

 8  agreement to arbitrate their disputes, if this obligation is

 9  created in the agreement.

10         (f)  If the assuming insurer does not meet the

11  requirements of paragraph (a) or paragraph (b), the credit

12  permitted by paragraph (c) is not allowed unless the assuming

13  insurer agrees in the trust agreements, in substance, to the

14  following conditions:

15         1.  Notwithstanding any other provisions in the trust

16  instrument, if the trust fund is inadequate because it

17  contains an amount less than the amount required by paragraph

18  (c), or if the grantor of the trust has been declared

19  insolvent or placed into receivership, rehabilitation,

20  liquidation, or similar proceedings under the laws of its

21  state or country of domicile, the trustee shall comply with an

22  order of the insurance regulator commissioner with regulatory

23  oversight over the trust or with an order of a United States

24  court of competent jurisdiction directing the trustee to

25  transfer to the insurance regulator commissioner with

26  regulatory oversight all of the assets of the trust fund.

27         2.  The assets must be distributed by and claims must

28  be filed with and valued by the insurance regulator

29  commissioner with regulatory oversight in accordance with the

30  laws of the state in which the trust is domiciled which are

31  applicable to the liquidation of domestic insurance companies.

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 1         3.  If the insurance regulator commissioner with

 2  regulatory oversight determines that the assets of the trust

 3  fund or any part thereof are not necessary to satisfy the

 4  claims of the United States ceding insurers of the grantor of

 5  the trust, the assets or part thereof must be returned by the

 6  insurance regulator commissioner with regulatory oversight to

 7  the trustee for distribution in accordance with the trust

 8  agreement.

 9         4.  The grantor shall waive any right otherwise

10  available to it under United States law which is inconsistent

11  with this provision.

12         (4)  An asset allowed or a deduction from liability

13  taken for the reinsurance ceded by an insurer to an assuming

14  insurer not meeting the requirements of subsections (2) and

15  (3) is allowed in an amount not exceeding the liabilities

16  carried by the ceding insurer. The deduction must be in the

17  amount of funds held by or on behalf of the ceding insurer,

18  including funds held in trust for the ceding insurer, under a

19  reinsurance contract with the assuming insurer as security for

20  the payment of obligations thereunder, if the security is held

21  in the United States subject to withdrawal solely by, and

22  under the exclusive control of, the ceding insurer, or, in the

23  case of a trust, held in a qualified United States financial

24  institution, as defined in paragraph (5)(b). This security may

25  be in the form of:

26         (a)  Cash in United States dollars;

27         (b)  Securities listed by the Securities Valuation

28  Office of the National Association of Insurance Commissioners

29  and qualifying as admitted assets pursuant to part II of

30  chapter 625;

31  

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 1         (c)  Clean, irrevocable, unconditional letters of

 2  credit, issued or confirmed by a qualified United States

 3  financial institution, as defined in paragraph (5)(a),

 4  effective no later than December 31 of the year for which the

 5  filing is made, and in the possession of, or in trust for, the

 6  ceding company on or before the filing date of its annual

 7  statement; or

 8         (d)  Any other form of security acceptable to the

 9  office department.

10         (5)(a)  For purposes of paragraph (4)(c) regarding

11  letters of credit, a "qualified United States financial

12  institution" means an institution that:

13         1.  Is organized or, in the case of a United States

14  office of a foreign banking organization, is licensed under

15  the laws of the United States or any state thereof;

16         2.  Is regulated, supervised, and examined by United

17  States or state authorities having regulatory authority over

18  banks and trust companies; and

19         3.  Has been determined by either the office department

20  or the Securities Valuation Office of the National Association

21  of Insurance Commissioners to meet such standards of financial

22  condition and standing as are considered necessary and

23  appropriate to regulate the quality of financial institutions

24  whose letters of credit will be acceptable to the office

25  department.

26         (b)  For purposes of those provisions of this law which

27  specify institutions that are eligible to act as a fiduciary

28  of a trust, a "qualified United States financial institution"

29  means an institution that is a member of the Federal Reserve

30  System or that has been determined by the office department to

31  meet the following criteria:

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 1         1.  Is organized or, in the case of a United States

 2  branch or agency office of a foreign banking organization, is

 3  licensed under the laws of the United States or any state

 4  thereof and has been granted authority to operate with

 5  fiduciary powers; and

 6         2.  Is regulated, supervised, and examined by federal

 7  or state authorities having regulatory authority over banks

 8  and trust companies.

 9         (7)  After notice and an opportunity for a hearing, the

10  office department may disallow any credit that it finds would

11  be contrary to the proper interests of the policyholders or

12  stockholders of a ceding domestic insurer.

13         (11)(a)  Any domestic or commercially domiciled insurer

14  ceding directly written risks of loss under this section

15  shall, within 30 days after receipt of a cover note or similar

16  confirmation of coverage, or, without exception, no later than

17  6 months after the effective date of the reinsurance treaty,

18  file with the office department one copy of a summary

19  statement containing the following information about each

20  treaty:

21         1.  The contract period;

22         2.  The nature of the reinsured's business;

23         3.  An indication as to whether the treaty is

24  proportional, nonproportional, coinsurance, modified

25  coinsurance, or indemnity, as applicable;

26         4.  The ceding company's loss retention per risk;

27         5.  The reinsured limits;

28         6.  Any special contract restrictions;

29         7.  A schedule of reinsurers assuming the risks of

30  loss;

31  

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 1         8.  An indication as to whether payments to the

 2  assuming insurer are based on written premiums or earned

 3  premiums;

 4         9.  Identification of any intermediary or broker used

 5  in obtaining the reinsurance and the commission paid to such

 6  intermediary or broker if known; and

 7         10.  Ceding commissions and allowances.

 8         (b)  The summary statement must be signed and attested

 9  to by either the chief executive officer or the chief

10  financial officer of the reporting insurer. In addition to the

11  summary statement, the office Insurance Commissioner may

12  require the filing of any supporting information relating to

13  the ceding of such risks as it she or he deems necessary. If

14  the summary statement prepared by the ceding insurer discloses

15  that the net effect of a reinsurance treaty or treaties (or

16  series of treaties with one or more affiliated reinsurers

17  entered into for the purpose of avoiding the following

18  threshold amount) at any time results in an increase of more

19  than 25 percent to the insurer's surplus as to policyholders,

20  then the insurer shall certify in writing to the office

21  department that the relevant reinsurance treaty or treaties

22  comply with the accounting requirements contained in any rule

23  adopted by the commission department under subsection (14). If

24  such certificate is filed after the summary statement of such

25  reinsurance treaty or treaties, the insurer shall refile the

26  summary statement with the certificate. In any event, the

27  certificate must state that a copy of the certificate was sent

28  to the reinsurer under the reinsurance treaty.

29         (c)  This subsection applies to cessions of directly

30  written risk or loss. This subsection does not apply to

31  contracts of facultative reinsurance or to any ceding insurer

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 1  with surplus as to policyholders that exceeds $100 million as

 2  of the immediately preceding December 31. Additionally, any

 3  ceding insurer otherwise subject to this section with less

 4  than $500,000 in direct premiums written in this state during

 5  the preceding calendar year or with less than 1,000

 6  policyholders at the end of the preceding calendar year is

 7  exempt from the requirements of this subsection. However, any

 8  ceding insurer otherwise subject to this section with more

 9  than $250,000 in direct premiums written in this state during

10  the preceding calendar quarter is not exempt from the

11  requirements of this subsection.

12         (d)  An authorized insurer not otherwise exempt from

13  the provisions of this subsection shall provide the

14  information required by this subsection with underlying and

15  supporting documentation upon written request of the office

16  department.

17         (e)  The office department may, upon a showing of good

18  cause, waive the requirements of this subsection.

19         (12)  If the office department finds that a reinsurance

20  agreement creates a substantial risk of insolvency to either

21  insurer entering into the reinsurance agreement, the office

22  department may by order require a cancellation of the

23  reinsurance agreement.

24         (14)  The commission department may adopt rules

25  implementing the provisions of this section. Rules are

26  authorized to protect the interests of insureds, claimants,

27  ceding insurers, assuming insurers, and the public. These

28  rules shall be in substantial compliance with:

29         (a)  The National Association of Insurance

30  Commissioners model regulations relating to credit for

31  reinsurance;

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 1         (b)  Version 2001 of The National Association of

 2  Insurance Commissioners Accounting Practices and Procedures

 3  Manual as of March 2002 and subsequent amendments thereto if

 4  the methodology remains substantially consistent; and

 5         (c)  The National Association of Insurance

 6  Commissioners model regulation for Credit for Reinsurance and

 7  Life and Health Reinsurance Agreements.

 8  

 9  The commission department may further adopt rules to provide

10  for transition from existing requirements for the approval of

11  reinsurers to the accreditation of reinsurers pursuant to this

12  section.

13         Section 855.  Subsections (2) and (3) of section

14  624.80, Florida Statutes, are amended to read:

15         624.80  Definitions.--As used in this part:

16         (2)  "Unsound condition" means that the office

17  department has determined that one or more of the following

18  conditions exist with respect to an insurer:

19         (a)  The insurer's required surplus, capital, or

20  capital stock is impaired to an extent prohibited by law;

21         (b)  The insurer continues to write new business when

22  it has not maintained the required surplus or capital;

23         (c)  The insurer attempts to dissolve or liquidate

24  without first having made provisions, satisfactory to the

25  office department, for liabilities arising from insurance

26  policies issued by the insurer; or

27         (d)  The insurer meets one or more of the grounds in s.

28  631.051 for the appointment of the department as receiver.

29         (3)  "Exceeded its powers" means the following

30  conditions:

31  

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 1         (a)  The insurer has refused to permit examination by

 2  the office department of its books, papers, accounts, records,

 3  or business practices;

 4         (b)  An insurer organized in this state has unlawfully

 5  removed from this state books, papers, accounts, or records

 6  necessary for an examination of the insurer by the office

 7  department;

 8         (c)  The insurer has failed to promptly comply with the

 9  applicable financial reporting statutes and office

10  departmental requests relating thereto;

11         (d)  The insurer has neglected or refused to observe an

12  order of the office department to correct a deficiency in its

13  capital or surplus; or

14         (e)  The insurer has unlawfully or in violation of an

15  office a department order:

16         1.  Totally reinsured its entire outstanding business;

17  or

18         2.  Merged or consolidated substantially its entire

19  property or business with another insurer.

20         Section 856.  Section 624.81, Florida Statutes, is

21  amended to read:

22         624.81  Notice to comply with written requirements of

23  office department; noncompliance.--

24         (1)  If the office department determines that the

25  conditions set forth in subsection (2) exist, the office

26  department shall issue an order placing the insurer in

27  administrative supervision, setting forth the reasons giving

28  rise to the determination, and specifying that the office

29  department is applying and effectuating the provisions of this

30  part. An order issued by the office department pursuant to

31  this subsection entitles the insurer to request a proceeding

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 1  under ss. 120.569 and 120.57, and such a request shall stay

 2  the action pending such proceeding.

 3         (2)  An insurer shall be subject to administrative

 4  supervision by the office department if upon examination or at

 5  any other time the office department determines that:

 6         (a)  The insurer is in unsound condition;

 7         (b)  The insurer's methods or practices render the

 8  continuance of its business hazardous to the public or to its

 9  insureds; or

10         (c)  The insurer has exceeded its powers granted under

11  its certificate of authority and applicable law.

12         (3)  Within 15 days of receipt of notice of the

13  office's department's determination to proceed under this

14  part, an insurer shall submit to the office department a plan

15  to correct the conditions set forth in the notice. For good

16  cause shown, the office department may extend the 15-day time

17  period for submission of the plan. If the office department

18  and the insurer agree on a corrective plan, a written

19  agreement shall be entered into to carry out the plan.

20         (4)  If an insurer fails to timely submit a plan, the

21  office department may specify the requirements of a plan to

22  address the conditions giving rise to imposition of

23  administrative supervision under this part.  In addition,

24  failure of the insurer to timely submit a plan is a violation

25  of the provisions of this code punishable in accordance with

26  s. 624.418.

27         (5)  The plan shall address, but shall not be limited

28  to, each of the activities of the insurer's business which are

29  set forth in s. 624.83.

30         (6)  If the office department and the insurer are

31  unable to agree on the provisions of the plan, the office

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 1  department may require the insurer to take such corrective

 2  action as may be reasonably necessary to remove the causes and

 3  conditions giving rise to the need for administrative

 4  supervision.

 5         (7)  The insurer shall have 60 days, or a longer period

 6  of time as designated by the office department but not to

 7  exceed 120 days, after the date of the written agreement or

 8  the receipt of the office's department's plan within which to

 9  comply with the requirements of the office department. At the

10  conclusion of the initial period of supervision, the office

11  department may extend the supervision in increments of 60 days

12  or longer, not to exceed 120 days, if conditions justifying

13  supervision exist. Each extension of supervision shall provide

14  the insurer with a point of entry pursuant to chapter 120.

15         (8)  The initiation or pendency of administrative

16  proceedings arising from actions taken under this section

17  shall not preclude the office department from initiating

18  judicial proceedings to place an insurer in conservation,

19  rehabilitation, or liquidation or initiating other delinquency

20  proceedings however designated under the laws of this state.

21         (9)  If it is determined that the conditions giving

22  rise to administrative supervision have been remedied so that

23  the continuance of its business is no longer hazardous to the

24  public or to its insureds, the office department shall release

25  the insurer from supervision.

26         (10)  The commission department may adopt rules to

27  define standards of hazardous financial condition and

28  corrective action substantially similar to that indicated in

29  the National Association of Insurance Commissioners' 1997

30  "Model Regulation to Define Standards and Commissioner's

31  Authority for Companies Deemed to be in Hazardous Financial

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 1  Condition," which are necessary to implement the provisions of

 2  this part.

 3         Section 857.  Subsections (1), (2), (3), and (4) of

 4  section 624.82, Florida Statutes, are amended to read:

 5         624.82  Confidentiality of certain proceedings and

 6  records.--

 7         (1)  Orders, notices, correspondence, reports, records,

 8  and other information in the possession of the office

 9  department relating to the supervision of any insurer are

10  confidential and exempt from the provisions of s. 119.07(1),

11  except as otherwise provided in this section. Proceedings and

12  hearings relating to the office's department's supervision of

13  any insurer are exempt from the provisions of s. 286.011,

14  except as otherwise provided in this section.

15         (2)  The personnel of the department and the office

16  shall have access to proceedings, hearings, notices,

17  correspondence, reports, records, or other information as

18  permitted by the office department.

19         (3)  The office department may open the proceedings or

20  hearings or disclose the contents of the notices,

21  correspondence, reports, records, or other information to a

22  department, agency, or instrumentality of this or another

23  state or the United States if it determines that the

24  disclosure is necessary or proper for the enforcement of the

25  laws of the United States or of this or another state of the

26  United States.

27         (4)  The office department may open the proceedings or

28  hearings or make public the notices, correspondence, reports,

29  records, or other information if the office department finds

30  that it is in the best interest of the public, the insurer in

31  supervision, or its insureds.

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 1         Section 858.  Section 624.83, Florida Statutes, is

 2  amended to read:

 3         624.83  Prohibited acts during period of

 4  supervision.--The office department may provide that the

 5  insurer may not conduct the following activities during the

 6  period of supervision, without prior approval by the office

 7  department:

 8         (1)  Dispose of, convey, or encumber any of its assets

 9  or its business in force;

10         (2)  Withdraw any of its bank accounts;

11         (3)  Lend any of its funds;

12         (4)  Invest any of its funds;

13         (5)  Transfer any of its property;

14         (6)  Incur any debt, obligation, or liability;

15         (7)  Merge or consolidate with another company;

16         (8)  Enter into any new reinsurance contract or treaty;

17         (9)  Terminate, surrender, forfeit, convert, or lapse

18  any insurance policy, certificate, or contract of insurance,

19  except for nonpayment of premiums due;

20         (10)  Release, pay, or refund premium deposits, accrued

21  cash or loan values, unearned premiums, or other reserves on

22  any insurance policy or certificate; or

23         (11)  Make any material change in management.

24         Section 859.  Section 624.84, Florida Statutes, is

25  amended to read:

26         624.84  Review.--During the period of supervision, the

27  insurer may contest an action taken or proposed to be taken by

28  the supervisor, specifying the manner wherein the action

29  complained of would not result in improving the condition of

30  the insurer. Such request shall not stay the action specified

31  pending reconsideration of the action by the office

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 1  department. Denial of the insurer's request upon

 2  reconsideration entitles the insurer to request a proceeding

 3  under ss. 120.569 and 120.57.

 4         Section 860.  Section 624.85, Florida Statutes, is

 5  amended to read:

 6         624.85  Administrative election of proceedings.--If the

 7  office department determines to act under authority of this

 8  part, the sequence of its acts and proceedings shall be as set

 9  forth herein.  However, it is a purpose and substance of this

10  part to allow the office department administrative discretion

11  in the event of insurer delinquencies and, in furtherance of

12  that purpose, the office department is hereby authorized, in

13  respect to insurer delinquencies or suspected delinquencies,

14  to proceed and administer either under the provisions of this

15  part or under any other applicable law, or under the

16  provisions of this part in conjunction with other applicable

17  law, and it is so provided. Nothing contained in this part or

18  in any other provision of law shall preclude the office

19  department from initiating judicial proceedings to place an

20  insurer in conservation, rehabilitation, or liquidation

21  proceedings or other delinquency proceedings however

22  designated under the laws of this state, regardless of whether

23  the office department has previously initiated administrative

24  supervision proceedings under this part against the insurer.

25  The entry of an order of seizure, rehabilitation, or

26  liquidation pursuant to chapter 631 shall terminate all

27  proceedings pending pursuant to this part.

28         Section 861.  Section 624.86, Florida Statutes, is

29  amended to read:

30         624.86  Other laws; conflicts; meetings between the

31  office department and the supervisor.--During the period of

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 1  administrative supervision, the office department may meet

 2  with a supervisor appointed under this part and with the

 3  attorney or other representative of the supervisor and such

 4  meetings are exempt from the provisions of s. 286.011.

 5         Section 862.  Section 624.87, Florida Statutes, is

 6  amended to read:

 7         624.87  Administrative supervision; expenses.--

 8         (1)  During the period of supervision the office

 9  department by contract or otherwise may appoint a deputy

10  supervisor to supervise the insurer.

11         (2)  Each insurer which is subject to administrative

12  supervision by the office department shall pay to the office

13  department the expenses of its administrative supervision at

14  the rates adopted by the office department. Expenses shall

15  include actual travel expenses, a reasonable living expense

16  allowance, compensation of the deputy supervisor or other

17  person employed or appointed by the office department for

18  purposes of the supervision, and necessary attendant

19  administrative costs of the office department directly related

20  to the supervision. The travel expense and living expense

21  allowance shall be limited to those expenses necessarily

22  incurred on account of the administrative supervision and

23  shall be paid by the insurer together with compensation upon

24  presentation by the office department to the insurer of a

25  detailed account of the charges and expenses after a detailed

26  statement has been filed by the deputy supervisor or other

27  person employed or appointed by the office department and

28  approved by the office department.

29         (3)  All moneys collected from insurers for the

30  expenses of administrative supervision shall be deposited into

31  the Insurance Commissioner's Regulatory Trust Fund, and the

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 1  office department is authorized to make deposits from time to

 2  time into this fund from moneys appropriated for the operation

 3  of the office department.

 4         (4)  Notwithstanding the provisions of s. 112.061, the

 5  office department is authorized to pay to the deputy

 6  supervisor or person employed or appointed by the office

 7  department for purposes of the supervision out of such trust

 8  fund the actual travel expenses, reasonable living expense

 9  allowance, and compensation in accordance with the statement

10  filed with the office department by the deputy supervisor or

11  other person, as provided in subsection (2), upon approval by

12  the office department.

13         (5)  The office department may in whole or in part

14  defer payment of expenses due from the insurer pursuant to

15  this section upon a showing that payment would adversely

16  impact on the financial condition of the insurer and

17  jeopardize its rehabilitation. The payment shall be made by

18  the insurer when the condition is removed and the payment

19  would no longer jeopardize the insurer's financial condition.

20         Section 863.  Section 625.01115, Florida Statutes, is

21  amended to read:

22         625.01115  Definitions.--As used in this chapter, the

23  term "statutory accounting principles" means accounting

24  principles as defined in the National Association of Insurance

25  Commissioners Accounting Practices and Procedures Manual as of

26  March 2002 and subsequent amendments thereto if the

27  methodology remains substantially consistent effective January

28  1, 2001.

29         Section 864.  Paragraph (d) of subsection (2),

30  paragraphs (a) and (c) of subsection (5), and subsections

31  

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 1  (10), (13), and (16) of section 625.012, Florida Statutes, are

 2  amended to read:

 3         625.012  "Assets" defined.--In any determination of the

 4  financial condition of an insurer, there shall be allowed as

 5  "assets" only such assets as are owned by the insurer and

 6  which consist of:

 7         (2)  Investments, securities, properties, and loans

 8  acquired or held in accordance with this code, and in

 9  connection therewith the following items:

10         (d)  Interest due or accrued on deposits in solvent

11  banks, savings and loan associations, and trust companies, and

12  interest due or accrued on other assets, if such interest is

13  in the judgment of the office department a collectible asset.

14         (5)(a)  Premiums in the course of collection, other

15  than for life insurance, not more than 3 months past due, less

16  commissions payable thereon. The foregoing limitation shall

17  not apply to premiums payable directly or indirectly by the

18  United States Government or by any of its instrumentalities.

19  All premiums, excluding commissions payable thereon, due from

20  a controlling or controlled person shall not be allowed as an

21  asset to the extent that:

22         1.  The premiums collected by the controlling or

23  controlled person and not remitted to the insurer are not held

24  in a trust account with a bank or other depository approved by

25  the office department. Such funds shall be held as trust funds

26  and may not be commingled with any other funds of the

27  controlling or controlled person. Disbursements from the trust

28  account may be made only to the insurer, the insured, or, for

29  the purpose of returning premiums, an entity who is entitled

30  to returned premiums on behalf of the insured.  A written copy

31  of the trust agreement must be filed with and approved by the

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 1  office department prior to its becoming effective. However,

 2  the investment income derived from the trust may be allocated

 3  as the parties deem proper. A controlling or controlled person

 4  shall deposit premiums collected into the trust account within

 5  15 working days after collection;

 6         2.  The controlling or controlled person has not

 7  provided to the insurer and the insurer has not maintained in

 8  its possession an unexpired, clean irrevocable letter of

 9  credit, payable to the insurer, issued for a term of not less

10  than 1 year and in conformity with the requirements set forth

11  in this subparagraph, the amount of which equals or exceeds

12  the liability of the controlling or controlled person to the

13  insurer, at all times during the period which the letter of

14  credit is in effect, for premiums collected by the controlling

15  or controlled person. The requirements are that such letter of

16  credit be issued under arrangements satisfactory to the office

17  department and that the letter be issued by a banking

18  institution which is a member of the Federal Reserve System

19  and which has a financial standing satisfactory to the office

20  department;

21         3.  The controlling or controlled person has not

22  provided to the insurer and the insurer maintained in its

23  possession evidence that the controlling or controlled person

24  has purchased and has currently in effect a financial guaranty

25  bond, payable to the insurer, issued for a term of not less

26  than 1 year and which is in conformity with the requirements

27  set forth in this subparagraph, the amount of which equals or

28  exceeds the liability of the controlling or controlled person

29  to the insurer, at all times during which the financial

30  guaranty bond is in effect, for the premiums collected by the

31  controlling or controlled person. The requirements are that

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 1  such a financial guaranty bond shall be issued under an

 2  arrangement satisfactory to the office department and that the

 3  financial guaranty bond be issued by an insurer authorized to

 4  transact such business in Florida and which has a financial

 5  standing satisfactory to the office department and which is

 6  neither controlled nor controlling in relation to either the

 7  insurer or the person for whom the bond is purchased; or

 8         4.  A financial evaluation indicates that the

 9  controlling or controlled person is unlikely to have the

10  ability to pay such premiums as they become due. The financial

11  evaluation shall be based on a review of the books and records

12  of the controlling or controlled person.

13         (c)  The office department shall disapprove any trust

14  agreement filed pursuant to paragraph (a) which does not

15  assure the safety of the premiums collected.

16         (10)  Deposits or equities recoverable from

17  underwriting associations, syndicates, and reinsurance funds,

18  or from any suspended banking institution, to the extent

19  deemed by the office department available for the payment of

20  losses and claims and at values to be determined by it.

21         (13)  Loans or advances by an insurer to its parent or

22  principal owner if approved by the office department.

23         (16)  Other assets, not inconsistent with the

24  provisions of this section, deemed by the office department to

25  be available for the payment of losses and claims, at values

26  to be determined by it.

27         Section 865.  Paragraph (d) of subsection (2) of

28  section 625.041, Florida Statutes, is amended to read:

29         625.041  Liabilities, in general.--In any determination

30  of the financial condition of an insurer, liabilities to be

31  charged against its assets shall include:

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 1         (2)  With reference to life and health insurance and

 2  annuity contracts:

 3         (d)  Any additional reserves that may be required by

 4  the office department consistent with practice formulated or

 5  approved by the National Association of Insurance

 6  Commissioners or its successor organization, on account of

 7  such insurance, including contract and premium deficiency

 8  reserves.

 9         Section 866.  Subsection (2) of section 625.051,

10  Florida Statutes, is amended to read:

11         625.051  Unearned premium reserve.--

12         (2)  The office department may require that such

13  reserves be equal to the unearned portions of the gross

14  premiums in force after deducting applicable reinsurance in

15  solvent insurers as computed on each respective risk from the

16  date of issue of the policy. If the office department does not

17  so require, the portions of the gross premium in force, less

18  applicable reinsurance in solvent insurers, to be held as an

19  unearned premium reserve, shall be computed according to the

20  following table:

21  

22  Term for which policy                     Reserve for unearned

23  was written                                            premium

24  

25  1 year or less........................................... 1/2 

26  2 years........................................1st year-- 3/4 

27                                                 2nd year-- 1/4 

28  3 years........................................1st year-- 5/6 

29                                                 2nd year-- 1/2 

30                                                 3rd year-- 1/6 

31  4 years........................................1st year-- 7/8 

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 1                                                 2nd year-- 5/8 

 2                                                 3rd year-- 3/8 

 3                                                 4th year-- 1/8 

 4  5 years.......................................1st year-- 9/10 

 5                                                2nd year-- 7/10 

 6                                                 3rd year-- 1/2 

 7                                                4th year-- 3/10 

 8                                                5th year-- 1/10 

 9  Over 5 years..........................................pro rata

10  

11         Section 867.  Section 625.061, Florida Statutes, is

12  amended to read:

13         625.061  Unearned premium reserve for marine and

14  transportation insurance.--As to marine and transportation

15  insurance, the entire amount of premiums on trip risks not

16  terminated shall be deemed unearned; and the office department

17  may require the insurer to carry a reserve equal to 100

18  percent of premiums on trip risks written during the month

19  ended as of the date of statement.

20         Section 868.  Section 625.071, Florida Statutes, is

21  amended to read:

22         625.071  Special reserve for bail and judicial

23  bonds.--In lieu of the unearned premium reserve required on

24  surety bonds under s. 625.051, the office department may

25  require any surety insurer or limited surety insurer to set up

26  and maintain a reserve on all bail bonds or other

27  single-premium bonds without definite expiration date,

28  furnished in judicial proceedings, equal to the lesser of 35

29  percent of the bail premiums in force or $7 per $1,000 of bail

30  liability. Such reserve shall be reported as a liability in

31  financial statements required to be filed with the office

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 1  department. Each insurer shall file a supplementary schedule

 2  showing bail premiums in force and bail liability and the

 3  associated special reserve for bail and judicial bonds with

 4  financial statements required by s. 624.424. Bail premiums in

 5  force do not include amounts retained by licensed bail bond

 6  agents or licensed managing general agents, but may not be

 7  less than 6.5 percent of the total consideration received for

 8  all bail bonds in force.

 9         Section 869.  Section 625.081, Florida Statutes, is

10  amended to read:

11         625.081  Reserve for health insurance.--For all health

12  insurance policies, the insurer shall maintain an active life

13  reserve which places a sound value on the insurer's

14  liabilities under such policies; is not less than the reserve

15  according to appropriate standards set forth in rules issued

16  by the commission department; and, in no event, is less in the

17  aggregate than the pro rata gross unearned premiums for such

18  policies.

19         Section 870.  Paragraph (d) of subsection (4) of

20  section 625.091, Florida Statutes, is amended to read:

21         625.091  Losses and loss adjustment expense reserves;

22  liability insurance and workers' compensation insurance.--The

23  reserve liabilities recorded in the insurer's annual statement

24  and financial statements for unpaid losses and loss adjustment

25  expenses shall be the estimated value of its claims when

26  ultimately settled and shall be computed as follows:

27         (4)

28         (d)1.  Beginning in calendar year 1998, each insurer

29  shall separately identify anticipated recoveries from the

30  Special Disability Trust Fund on the annual statement required

31  to be filed pursuant to s. 624.424.

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 1         2.  For all financial statements filed with the office

 2  department beginning in calendar year 1998, each insurer shall

 3  disclose in the notes to the financial statements of any

 4  financial statement required to be filed pursuant to s.

 5  624.424 any credit in loss reserves taken for anticipated

 6  recoveries from the Special Disability Trust Fund.  That

 7  disclosure shall include:

 8         a.  The amount of credit taken by the insurer in the

 9  determination of its loss reserves for the prior calendar year

10  and the current reporting period on a year-to-date basis.

11         b.  The amount of payments received by the insurer from

12  the Special Disability Trust Fund during the prior calendar

13  year and the year-to-date recoveries for the current year.

14         c.  The amount the insurer was assessed by the Special

15  Disability Trust Fund during the prior calendar year and

16  during the current calendar year.

17         Section 871.  Section 625.101, Florida Statutes, is

18  amended to read:

19         625.101  Increase of inadequate loss reserves.--If loss

20  experience shows that an insurer's loss reserves, however

21  computed or estimated, are inadequate, the office department

22  shall require the insurer to maintain loss reserves in such

23  additional amount as is needed to make them adequate.  This

24  section does not apply as to life insurance.

25         Section 872.  Subsections (2), (3), and (4), paragraphs

26  (c), (d), (g), (h), (i), and (j) of subsection (5), paragraph

27  (e) of subsection (6), subsection (10), paragraph (b) of

28  subsection (12), and subsection (14) of section 625.121,

29  Florida Statutes, are amended to read:

30         625.121  Standard Valuation Law; life insurance.--

31  

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 1         (2)  ANNUAL VALUATION.--The office department shall

 2  annually value, or cause to be valued, the reserve

 3  liabilities, hereinafter called "reserves," for all

 4  outstanding life insurance policies and annuity and pure

 5  endowment contracts of every life insurer doing business in

 6  this state, and may certify the amount of any such reserves,

 7  specifying the mortality table or tables, rate or rates of

 8  interest, and methods, net-level premium method or others,

 9  used in the calculation of such reserves. In the case of an

10  alien insurer, such valuation shall be limited to its

11  insurance transactions in the United States. In calculating

12  such reserves, the office department may use group methods and

13  approximate averages for fractions of a year or otherwise. It

14  may accept in its discretion the insurer's calculation of such

15  reserves. In lieu of the valuation of the reserves herein

16  required of any foreign or alien insurer, it may accept any

17  valuation made or caused to be made by the insurance

18  supervisory official of any state or other jurisdiction when

19  such valuation complies with the minimum standard herein

20  provided and if the official of such state or jurisdiction

21  accepts as sufficient and valid for all legal purposes the

22  certificate of valuation of the office department when such

23  certificate states the valuation to have been made in a

24  specified manner according to which the aggregate reserves

25  would be at least as large as if they had been computed in the

26  manner prescribed by the law of that state or jurisdiction.

27  When any such valuation is made by the office department, it

28  may use the actuary of the office department or employ an

29  actuary for the purpose; and the reasonable compensation of

30  the actuary, at a rate approved by the office department, and

31  reimbursement of travel expenses pursuant to s. 624.320 upon

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 1  demand by the office department, supported by an itemized

 2  statement of such compensation and expenses, shall be paid by

 3  the insurer. When a domestic insurer furnishes the office

 4  department with a valuation of its outstanding policies as

 5  computed by its own actuary or by an actuary deemed

 6  satisfactory for the purpose by the office department, the

 7  valuation shall be verified by the actuary of the office

 8  department without cost to the insurer.

 9         (3)  ACTUARIAL OPINION OF RESERVES.--

10         (a)1.  Each life insurance company doing business in

11  this state shall annually submit the opinion of a qualified

12  actuary as to whether the reserves and related actuarial items

13  held in support of the policies and contracts specified by the

14  commission department by rule are computed appropriately, are

15  based on assumptions which satisfy contractual provisions, are

16  consistent with prior reported amounts, and comply with

17  applicable laws of this state. The commission department by

18  rule shall define the specifics of this opinion and add any

19  other items determined to be necessary to its scope.

20         2.  The opinion shall be submitted with the annual

21  statement reflecting the valuation of such reserve liabilities

22  for each year ending on or after December 31, 1992.

23         3.  The opinion shall apply to all business in force,

24  including individual and group health insurance plans, in the

25  form and substance acceptable to the office department as

26  specified by rule of the commission.

27         4.  The commission department may adopt rules providing

28  the standards of the actuarial opinion consistent with

29  standards adopted by the Actuarial Standards Board on December

30  31, 2002 October 1, 1991, and subsequent revisions thereto,

31  provided that the standards remain substantially consistent.

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 1         5.  In the case of an opinion required to be submitted

 2  by a foreign or alien company, the office department may

 3  accept the opinion filed by that company with the insurance

 4  supervisory official of another state if the office department

 5  determines that the opinion reasonably meets the requirements

 6  applicable to a company domiciled in this state.

 7         6.  For the purposes of this subsection, "qualified

 8  actuary" means a member in good standing of the American

 9  Academy of Actuaries who also meets the requirements specified

10  by rule of the commission department.

11         7.  Disciplinary action by the office department

12  against the company or the qualified actuary shall be in

13  accordance with the insurance code and related rules adopted

14  by the commission department.

15         8.  A memorandum in the form and substance specified by

16  rule shall be prepared to support each actuarial opinion.

17         9.  If the insurance company fails to provide a

18  supporting memorandum at the request of the office department

19  within a period specified by rule of the commission, or if the

20  office department determines that the supporting memorandum

21  provided by the insurance company fails to meet the standards

22  prescribed by rule of the commission, the office department

23  may engage a qualified actuary at the expense of the company

24  to review the opinion and the basis for the opinion and

25  prepare such supporting memorandum as is required by the

26  office department.

27         10.  Except as otherwise provided in this paragraph,

28  any memorandum or other material in support of the opinion is

29  confidential and exempt from the provisions of s. 119.07(1);

30  however, the memorandum or other material may be released by

31  the office department with the written consent of the company,

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 1  or to the American Academy of Actuaries upon request stating

 2  that the memorandum or other material is required for the

 3  purpose of professional disciplinary proceedings and setting

 4  forth procedures satisfactory to the office department for

 5  preserving the confidentiality of the memorandum or other

 6  material. If any portion of the confidential memorandum is

 7  cited by the company in its marketing or is cited before any

 8  governmental agency other than a state insurance department or

 9  is released by the company to the news media, no portion of

10  the memorandum is confidential.

11         (b)  In addition to the opinion required by

12  subparagraph (a)1., the office department may, pursuant to

13  commission by rule, require an opinion of the same qualified

14  actuary as to whether the reserves and related actuarial items

15  held in support of the policies and contracts specified by the

16  commission department by rule, when considered in light of the

17  assets held by the company with respect to the reserves and

18  related actuarial items, including but not limited to the

19  investment earnings on the assets and considerations

20  anticipated to be received and retained under the policies and

21  contracts, make adequate provision for the company's

22  obligations under the policies and contracts, including, but

23  not limited to, the benefits under, and expenses associated

24  with, the policies and contracts.

25         (c)  The commission department may provide by rule for

26  a transition period for establishing any higher reserves which

27  the qualified actuary may deem necessary in order to render

28  the opinion required by this subsection.

29         (4)  MINIMUM STANDARD FOR VALUATION OF POLICIES AND

30  CONTRACTS ISSUED BEFORE OPERATIVE DATE OF STANDARD

31  NONFORFEITURE LAW.--The minimum standard for the valuation of

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 1  all such policies and contracts issued prior to the operative

 2  date of s. 627.476 (Standard Nonforfeiture Law) shall be any

 3  basis satisfactory to the office department. Any basis

 4  satisfactory to the former Department of Insurance on the

 5  effective date of this code shall be deemed to meet such

 6  minimum standards.

 7         (5)  MINIMUM STANDARD FOR VALUATION OF POLICIES AND

 8  CONTRACTS ISSUED ON OR AFTER OPERATIVE DATE OF STANDARD

 9  NONFORFEITURE LAW.--Except as otherwise provided in paragraph

10  (h) and subsections (6), (11), and (14), the minimum standard

11  for the valuation of all such policies and contracts issued on

12  or after the operative date of s. 627.476 (Standard

13  Nonforfeiture Law for Life Insurance) shall be the

14  commissioners' reserve valuation method defined in subsections

15  (7), (11), and (14); 5 percent interest for group annuity and

16  pure endowment contracts and 3.5 percent interest for all

17  other such policies and contracts, or in the case of life

18  insurance policies and contracts, other than annuity and pure

19  endowment contracts, issued on or after July 1, 1973, 4

20  percent interest for such policies issued prior to October 1,

21  1979, and 4.5 percent interest for such policies issued on or

22  after October 1, 1979; and the following tables:

23         (c)  For individual annuity and pure endowment

24  contracts, excluding any disability and accidental death

25  benefits in such policies, the 1937 Standard Annuity Mortality

26  Table or, at the option of the insurer, the Annuity Mortality

27  Table for 1949, Ultimate, or any modification of either of

28  these tables approved by the office department.

29         (d)  For group annuity and pure endowment contracts,

30  excluding any disability and accidental death benefits in such

31  policies, the Group Annuity Mortality Table for 1951; any

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 1  modification of such table approved by the office department;

 2  or, at the option of the insurer, any of the tables or

 3  modifications of tables specified for individual annuity and

 4  pure endowment contracts.

 5         (g)  For group life insurance, life insurance issued on

 6  the substandard basis, and other special benefits, such tables

 7  as may be approved by the office department as being

 8  sufficient with relation to the benefits provided by such

 9  policies.

10         (h)  Except as provided in subsection (6), the minimum

11  standard for the valuation of all individual annuity and pure

12  endowment contracts issued on or after the operative date of

13  this paragraph and for all annuities and pure endowments

14  purchased on or after such operative date under group annuity

15  and pure endowment contracts shall be the commissioners'

16  reserve valuation method defined in subsection (7) and the

17  following tables and interest rates:

18         1.  For individual annuity and pure endowment contracts

19  issued prior to October 1, 1979, excluding any disability and

20  accidental death benefits in such contracts, the 1971

21  Individual Annuity Mortality Table, or any modification of

22  this table approved by the office department, and 6 percent

23  interest for single-premium immediate annuity contracts and 4

24  percent interest for all other individual annuity and pure

25  endowment contracts.

26         2.  For individual single-premium immediate annuity

27  contracts issued on or after October 1, 1979, and prior to

28  October 1, 1986, excluding any disability and accidental death

29  benefits in such contracts, the 1971 Individual Annuity

30  Mortality Table, or any modification of this table approved by

31  the office department, and 7.5 percent interest. For such

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 1  contracts issued on or after October 1, 1986, the 1983

 2  Individual Annual Mortality Table, or any modification of such

 3  table approved by the office department, and the applicable

 4  calendar year statutory valuation interest rate as described

 5  in subsection (6).

 6         3.  For individual annuity and pure endowment contracts

 7  issued on or after October 1, 1979, and prior to October 1,

 8  1986, other than single-premium immediate annuity contracts,

 9  excluding any disability and accidental death benefits in such

10  contracts, the 1971 Individual Annuity Mortality Table, or any

11  modification of this table approved by the office department,

12  and 5.5 percent interest for single-premium deferred annuity

13  and pure endowment contracts and 4.5 percent interest for all

14  other such individual annuity and pure endowment contracts.

15  For such contracts issued on or after October 1, 1986, the

16  1983 Individual Annual Mortality Table, or any modification of

17  such table approved by the office department, and the

18  applicable calendar year statutory valuation interest rate as

19  described in subsection (6).

20         4.  For all annuities and pure endowments purchased

21  prior to October 1, 1979, under group annuity and pure

22  endowment contracts, excluding any disability and accidental

23  death benefits purchased under such contracts, the 1971 Group

24  Annuity Mortality Table, or any modification of this table

25  approved by the office department, and 6 percent interest.

26         5.  For all annuities and pure endowments purchased on

27  or after October 1, 1979, and prior to October 1, 1986, under

28  group annuity and pure endowment contracts, excluding any

29  disability and accidental death benefits purchased under such

30  contracts, the 1971 Group Annuity Mortality Table, or any

31  modification of this table approved by the office department,

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 1  and 7.5 percent interest. For such contracts purchased on or

 2  after October 1, 1986, the 1983 Group Annuity Mortality Table,

 3  or any modification of such table approved by the office

 4  department, and the applicable calendar year statutory

 5  valuation interest rate as described in subsection (6).

 6  

 7  After July 1, 1973, any insurer may have filed file with the

 8  former Department of Insurance a written notice of its

 9  election to comply with the provisions of this paragraph after

10  a specified date before January 1, 1979, which shall be the

11  operative date of this paragraph for such insurer. However, an

12  insurer may elect a different operative date for individual

13  annuity and pure endowment contracts from that elected for

14  group annuity and pure endowment contracts.  If an insurer

15  makes no such election, the operative date of this paragraph

16  for such insurer shall be January 1, 1979.

17         (i)  In lieu of the mortality tables specified in this

18  subsection, and subject to rules previously adopted by the

19  former Department of Insurance, the insurance company may, at

20  its option:

21         1.  Substitute the applicable 1958 CSO or CET Smoker

22  and Nonsmoker Mortality Tables, in lieu of the 1980 CSO or CET

23  mortality table standard, for policies issued on or after the

24  operative date of s. 627.476(9) and before January 1, 1989.

25         2.  Substitute the applicable 1980 CSO or CET Smoker

26  and Nonsmoker Mortality Tables in lieu of the 1980 CSO or CET

27  mortality table standard;

28         3.  Use the Annuity 2000 Mortality Table for

29  determining the minimum standard of valuation for individual

30  annuity and pure endowment contracts issued on or after

31  January 1, 1998, and before July 1, 1998 the operative date of

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 1  this section until the department, on a date certain that is

 2  on or after January 1, 1998, adopts by rule that table for

 3  determining the minimum standard for valuation purposes.

 4         4.  Use the 1994 GAR Table for determining the minimum

 5  standard of valuation for annuities and pure endowments

 6  purchased on or after January 1, 1998, and before July 1,

 7  1998, the operative date of this section under group annuity

 8  and pure endowment contracts until the department, on a date

 9  certain that is on or after January 1, 1998, adopts by rule

10  that table for determining the minimum standard for valuation

11  purposes.

12         (j)  The commission department may adopt by rule the

13  model regulation for valuation of life insurance policies as

14  approved by the National Association of Insurance

15  Commissioners in March 1999, including tables of select

16  mortality factors, and may make the regulation effective for

17  policies issued on or after January 1, 2000.

18         (6)  MINIMUM STANDARD OF VALUATION.--

19         (e)  The interest rate index shall be the Moody's

20  Corporate Bond Yield Average-Monthly Average Corporates as

21  published by Moody's Investors Service, Inc., as long as this

22  index is calculated by using substantially the same

23  methodology as used by it on January 1, 1981. If Moody's

24  corporate bond yield average ceases to be calculated in this

25  manner, the interest rate index shall be the index approved by

26  rule promulgated by the commission department. The methodology

27  used in determining the index approved by rule shall be

28  substantially the same as the methodology employed on January

29  1, 1981, for determining Moody's Corporate Bond Yield

30  Average-Monthly Average Corporates as published by Moody's

31  Investors Services, Inc.

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 1         (10)  LOWER VALUATIONS.--An insurer which at any time

 2  had adopted any standard of valuation producing greater

 3  aggregate reserves than those calculated according to the

 4  minimum standard herein provided may, with the approval of the

 5  office department, adopt any lower standard of valuation, but

 6  not lower than the minimum herein provided; however, for the

 7  purposes of this subsection, the holding of additional

 8  reserves previously determined by a qualified actuary to be

 9  necessary to render the opinion required by subsection (3)

10  shall not be deemed to be the adoption of a higher standard of

11  valuation.

12         (12)  ALTERNATE METHOD FOR DETERMINING RESERVES IN

13  CERTAIN CASES.--In the case of any plan of life insurance

14  which provides for future premium determination, the amounts

15  of which are to be determined by the insurer based on then

16  estimates of future experience, or in the case of any plan of

17  life insurance or annuity which is of such a nature that the

18  minimum reserves cannot be determined by the methods described

19  in subsection (7), the reserves which are held under any such

20  plan shall:

21         (b)  Be computed by a method which is consistent with

22  the principles of this section, as determined by rules

23  promulgated by the commission department.

24         (14)  MINIMUM STANDARDS FOR HEALTH PLANS.--The

25  commission department shall adopt a rule containing the

26  minimum standards applicable to the valuation of health plans

27  in accordance with sound actuarial principles.

28         Section 873.  Subsection (2) of section 625.131,

29  Florida Statutes, is amended to read:

30         625.131  Credit life and disability policies, special

31  reserve bases.--

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 1         (2)  As to single-premium credit life insurance

 2  policies, the insurer shall establish and maintain reserves

 3  which are not less than the value, at the valuation date, of

 4  the risk for the unexpired portion of the period for which the

 5  premium has been paid as computed on the basis of the

 6  commissioners' 1980 Standard Ordinary Mortality Table and 3.5

 7  percent interest.  At the discretion of the office department,

 8  the insurer may make a reasonable assumption as to the ages at

 9  which net premiums are to be determined.  In lieu of the

10  foregoing basis, reserves based upon unearned gross premiums

11  may be used at the option of the insurer.

12         Section 874.  Section 625.141, Florida Statutes, is

13  amended to read:

14         625.141  Valuation of bonds.--

15         (1)  All bonds or other evidences of debt having a

16  fixed term and rate of interest held by an insurer may, if

17  amply secured and not in default as to principal or interest,

18  be valued as follows:

19         (a)  If purchased at par, at the par value.

20         (b)  If purchased above or below par, on the basis of

21  the purchase price adjusted so as to bring the value to par at

22  maturity and so as to yield in the meantime the effective rate

23  of interest at which the purchase was made, or in lieu of such

24  method, according to such accepted method of valuation as is

25  approved by the commission department.

26         (c)  Purchase price shall in no case be taken at a

27  higher figure than the actual market value at the time of

28  purchase, plus actual brokerage, transfer, postage, or express

29  charges paid in the acquisition of such securities.

30         (2)  The office department shall have full discretion

31  in determining the method of calculating values according to

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 1  the rules set forth in this section, but no such method or

 2  valuation shall be inconsistent with the method formulated or

 3  approved by the National Association of Insurance

 4  Commissioners or its successor organization and set forth in

 5  the latest edition of its publication "Valuation of

 6  Securities"; provided that such valuation methodology is

 7  substantially similar to the methodology used by the National

 8  Association of Insurance Commissioners in its July 1, 2002,

 9  2001 edition of such publication. Amortization of bond premium

10  or discount must be calculated using the scientific (constant

11  yield) interest method taking into consideration specified

12  interest and principal provisions over the life of the bond.

13  Bonds containing call provisions shall be amortized to the

14  call or maturity value or date that produces the lowest asset

15  value.

16         Section 875.  Subsections (1), (2), and (4) of section

17  625.151, Florida Statutes, are amended to read:

18         625.151  Valuation of other securities.--

19         (1)  Securities, other than those referred to in s.

20  625.141, held by an insurer shall be valued, in the discretion

21  of the office department, at their market value, or at their

22  appraised value, or at prices determined by it as representing

23  their fair market value.

24         (2)  Preferred or guaranteed stocks or shares while

25  paying full dividends may be carried at a fixed value in lieu

26  of market value, at the discretion of the office department

27  and in accordance with such method of valuation as it may

28  approve.

29         (4)  No valuations under this section shall be

30  inconsistent with any applicable valuation or method contained

31  in the latest edition of the publication "Valuation of

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 1  Securities" published by the National Association of Insurance

 2  Commissioners or its successor organization; provided that

 3  such valuation methodology is substantially similar to the

 4  methodology used by the National Association of Insurance

 5  Commissioners in its July 1, 2002, 1988 edition of such

 6  publication.

 7         Section 876.  Subsections (1), (2), (3), and (5) of

 8  section 625.161, Florida Statutes, are amended to read:

 9         625.161  Valuation of property.--

10         (1)  Real property owned by an insurer which is

11  reported in financial statements filed with the office

12  department shall be valued at the lower of depreciated cost or

13  fair market value.

14         (2)  Real property acquired pursuant to a mortgage loan

15  or contract for sale, in the absence of a recent appraisal

16  deemed by the office department to be reliable, shall not be

17  valued at an amount greater than the unpaid principal and

18  accrued interest of the defaulted loan or contract at the date

19  of such acquisition, together with any taxes and expenses paid

20  or incurred in connection with such acquisition, and the cost

21  of improvements thereafter made by the insurer and any amounts

22  thereafter paid by the insurer on assessments levied for

23  improvements in connection with the property.

24         (3)  Other real property held by an insurer shall not

25  be valued at an amount in excess of fair value as determined

26  by recent appraisal. If the valuation of real property is

27  based on an appraisal more than 5 years old, the office

28  department may, at its discretion, call for and require a new

29  appraisal in order to determine fair market value.

30         (5)  In carrying out its responsibilities under this

31  section, in the event that the office department and the

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 1  insurer do not agree on the value of real or personal property

 2  of such insurer, the office department may retain the services

 3  of a qualified real or personal property appraiser. In the

 4  event it is subsequently determined that the insurer has

 5  overvalued assets, the office department shall be reimbursed

 6  for the costs of the services of any such appraiser incurred

 7  with respect to its responsibilities under this section

 8  regarding an insurer by said insurer and any reimbursement

 9  shall be deposited in the Insurance Commissioner's Regulatory

10  Trust Fund.

11         Section 877.  Section 625.172, Florida Statutes, is

12  amended to read:

13         625.172  Replacing certain assets; reporting certain

14  liabilities.--

15         (1)  The office department, upon determining that an

16  insurer's asset has not been evaluated according to applicable

17  law or that it does not qualify as an asset, shall require the

18  insurer to properly reevaluate the asset or replace the asset

19  with an asset suitable to the office department.

20         (2)  The office department, upon determining that an

21  insurer has failed to report certain liabilities that should

22  have been reported, shall require that the insurer report such

23  liabilities to the office department within 90 days.

24         (3)  If it is determined that the proper valuation of

25  an asset or the establishment of certain liabilities would

26  place the insurer in financial impairment or insolvency, the

27  office department may, at its discretion, immediately suspend

28  the certificate of authority of an insurer or take other

29  action it deems appropriate to protect the interests of

30  policyholders or the general public.

31  

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 1         Section 878.  Section 625.181, Florida Statutes, is

 2  amended to read:

 3         625.181  Assets received as capital or surplus

 4  contributions.--Assets received by an insurer as a capital or

 5  surplus contribution shall, for purposes of this code, be

 6  deemed to be purchased by the insurer at a cost equal to, in

 7  the discretion of the office department, their market value,

 8  their appraised value, or prices determined by the office

 9  department as representing their fair market value.  Assets so

10  acquired shall be valued in accordance with the appropriate

11  sections of this code as if the insurer had purchased such

12  assets directly.

13         Section 879.  Subsection (2) of section 625.303,

14  Florida Statutes, is amended to read:

15         625.303  General qualifications.--

16         (2)  No security or investment shall be eligible for

17  purchase at a price above its market value unless it is

18  approved by the office department and is made in accordance

19  with valuation procedures of the National Association of

20  Insurance Commissioners which have been adopted by the

21  commission department.

22         Section 880.  Subsections (3) and (9) of section

23  625.305, Florida Statutes, are amended, subsection (7) of that

24  section is repealed, and present subsection (9) of that

25  section is amended to read:

26         625.305  Diversification.--

27         (3)  The cost of investments made by insurers in a

28  mortgage loan authorized by s. 625.327 shall not exceed the

29  lesser of 5 percent of the insurer's admitted assets or 10

30  percent of the insurer's capital and surplus. An insurer shall

31  not invest in additional mortgage loans without the consent of

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 1  the office department if the admitted value of all mortgage

 2  loans held by the insurer exceeds:

 3         (a)  With respect to life and health insurers, 40

 4  percent of the admitted assets of the insurer.

 5         (b)  With respect to property and casualty insurers, 10

 6  percent of the admitted assets of the insurer.

 7  

 8  An insurer that, as of October 1, 1991, has mortgage

 9  investments that exceed the aggregate limitation specified in

10  this subsection shall submit to the department no later than

11  January 31, 1992, a plan to bring the amount of mortgage

12  investments into compliance with such limitations by January

13  1, 2001.

14         (8)(9)  The office department may limit the extent of

15  an insurer's deposits with any financial institution which

16  does not meet its regulatory capital requirement if the office

17  department determines that the financial solvency of the

18  insurer is threatened by a deposit in excess of such limit.

19         Section 881.  Section 625.317, Florida Statutes, is

20  amended to read:

21         625.317  Corporate bonds and debentures.--An insurer

22  may invest in bonds, notes, or other interest-bearing or

23  interest-accruing obligations of any solvent corporation

24  organized under the laws of the United States or Canada or

25  under the laws of any state, the District of Columbia, any

26  territory or possession of the United States, or any Province

27  of Canada or in bonds or notes issued by the Citizens Property

28  Insurance Corporation as authorized by s. 627.351(6) Florida

29  Windstorm Underwriting Association or a private nonprofit

30  corporation, a private nonprofit unincorporated association,

31  or a nonprofit mutual company organized by that association,

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 1  all as authorized in s. 627.351(2)(c), or any subsidiary or

 2  affiliate thereof authorized by the Department of Insurance to

 3  issue such bonds or notes.

 4         Section 882.  Section 625.322, Florida Statutes, is

 5  amended to read:

 6         625.322  Collateral loans.--An insurer may invest in

 7  loans with a maturity not in excess of 12 years from the date

 8  thereof which are secured by the pledge of assets permitted by

 9  part I of this chapter. Loans made pursuant to this section

10  shall not be admitted as an asset when it is considered

11  probable that any portion of the amounts due under the

12  contractual terms of the loan will not be collected.

13  Collateral loans reported in financial statements filed with

14  the office department shall not exceed the value of the

15  collateral held by the company.

16         Section 883.  Section 625.324, Florida Statutes, is

17  amended to read:

18         625.324  Corporate stocks.--An insurer may invest in

19  stocks, common or preferred, of any corporation created or

20  existing under the laws of the United States or of any state

21  or Canada or any province thereof.  An insurer may invest in

22  stocks, common or preferred, of any corporation created or

23  existing under the laws of any foreign country other than

24  Canada if such stocks are listed and traded on a national

25  securities exchange in the United States or, in the

26  alternative, if such investment in stocks of any corporation

27  created or existing under the laws of any foreign country are

28  first approved by the office department.  Nothing in this

29  section shall apply to qualifying investments made by an

30  insurer in a foreign country under authority of s. 625.326.

31  

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 1         Section 884.  Subsection (4) of section 625.325,

 2  Florida Statutes, is amended to read:

 3         625.325  Investments in subsidiaries and related

 4  corporations.--

 5         (4)  DEBT OBLIGATIONS.--Debt obligations, other than

 6  mortgage loans, made under the authority of this section must

 7  meet amortization requirements in accordance with the latest

 8  edition of the publication "Valuation of Securities" by the

 9  National Association of Insurance Commissioners or its

10  successor organization; provided that such amortization

11  methodology is substantially similar to the methodology used

12  by the National Association of Insurance Commissioners in its

13  July 1, 2002, 1988 edition of such publication.

14         Section 885.  Section 625.326, Florida Statutes, is

15  amended to read:

16         625.326  Foreign investments.--An insurer authorized to

17  transact insurance in a foreign country may have funds

18  invested in such securities as may be required for such

19  authority and for the transaction of such business.  Canadian

20  securities eligible for investment under other provisions of

21  this part are not subject to this section.  Subject to the

22  approval of the office department:

23         (1)  An insurer may invest in eurodollar certificates

24  of deposit issued by foreign branches of United States

25  commercial banks.

26         (2)  In addition to Canadian securities eligible for

27  investment and to investments in countries in which an insurer

28  transacts insurance, an insurer may invest in bonds, notes, or

29  stocks of any foreign country or corporation if such security

30  meets the general requirements of s. 625.303 and does not

31  exceed, in total, 5 percent of admitted assets.

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 1         Section 886.  Subsection (1) of section 625.330,

 2  Florida Statutes, is amended to read:

 3         625.330  Special investments by title insurer.--

 4         (1)  In addition to other investments eligible under

 5  this part, a title insurer may invest and have invested an

 6  amount not exceeding the greater of $300,000 or 50 percent of

 7  that part of its surplus as to policyholders which exceeds the

 8  minimum surplus required by s. 624.408 in its abstract plant

 9  and equipment, in loans secured by mortgages on abstract

10  plants and equipment, and, with the consent of the office

11  department, in stocks of abstract companies. If the insurer

12  transacts kinds of insurance in addition to title insurance,

13  for the purposes of this section its paid-in capital stock

14  shall be prorated between title insurance and such other

15  insurances upon the basis of the reserves maintained by the

16  insurer for the various kinds of insurance; but the capital so

17  assigned to title insurance shall in no event be less than

18  $100,000.

19         Section 887.  Subsection (1) of section 625.331,

20  Florida Statutes, is amended to read:

21         625.331  Special consent investments.--

22         (1)  After satisfying the requirements of this part,

23  any funds of an insurer in excess of its reserves and

24  policyholders' surplus required to be maintained may be

25  invested:

26         (a)  Without limitation in any investments otherwise

27  authorized by this part; or

28         (b)  In such other investments not specifically

29  authorized by this part as long as such investments do not

30  exceed the lesser of 5 percent of the insurer's total admitted

31  assets or 25 percent of the amount by which the insurer's

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 1  policyholders' surplus exceeds the minimum required to be

 2  maintained.

 3  

 4  The limitations in paragraph (b) may be exceeded if consented

 5  to in writing by the office department.

 6         Section 888.  Paragraphs (a) and (b) of subsection (1)

 7  of section 625.332, Florida Statutes, are amended to read:

 8         625.332  Prohibited investments and investment

 9  underwriting.--

10         (1)  In addition to investments excluded pursuant to

11  other provisions of this code, an insurer shall not directly

12  or indirectly invest in or lend its funds upon the security

13  of:

14         (a)  Issued shares of its own capital stock, except for

15  the purpose of mutualization under s. 628.431, or in

16  connection with a plan approved by the office department for

17  purchase of such shares by the insurer's officers, employees,

18  or agents.  No such stock shall, however, constitute an asset

19  of the insurer in any determination of its financial

20  condition.

21         (b)  Except with the consent of the office department,

22  securities issued by any corporation or enterprise the

23  controlling interest of which is, or will after such

24  acquisition by the insurer be, held directly or indirectly by

25  the insurer or any combination of the insurer and the

26  insurer's directors, officers, parent corporation,

27  subsidiaries, or controlling stockholders. Investments in

28  subsidiaries under s. 625.325 shall not be subject to this

29  provision.

30  

31  

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 1         Section 889.  Paragraph (e) of subsection (1) and

 2  subsection (3) of section 625.333, Florida Statutes, are

 3  amended to read:

 4         625.333  Real estate, in general.--An insurer shall not

 5  directly or indirectly acquire or hold real estate except as

 6  authorized in this section.

 7         (1)  An insurer may acquire and hold:

 8         (e)  Additional real property and equipment incident to

 9  real property, if necessary or convenient for the enhancement

10  of the marketability or sale value of real property previously

11  acquired or held by it under paragraphs (b)-(d), but subject

12  to the prior written approval of the office department.

13         (3)  The amount in real property acquired and held by

14  an insurer shall not exceed 15 percent of the insurer's

15  admitted assets, but the office department may grant

16  permission to the insurer to invest in real property in such

17  increased amount as it may deem proper.

18         Section 890.  Section 625.338, Florida Statutes, is

19  amended to read:

20         625.338  Time limit for disposal of ineligible property

21  and securities; effect of failure to dispose.--

22         (1)  Any property or securities lawfully acquired by an

23  insurer which it could not otherwise have invested in or

24  loaned its funds upon at the time of such acquisition shall be

25  disposed of within 3 years from the date of acquisition,

26  unless within such period the security has attained to the

27  standard of eligibility except that any security or property

28  acquired under any agreement of bulk reinsurance, merger, or

29  consolidation may be retained for a longer period if so

30  provided in the plan for such reinsurance, merger, or

31  consolidation as approved by the office department under

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 1  chapter 628. Upon application by the insurer and proof that

 2  forced sale of any such property or security would materially

 3  injure the interests of the insurer, the office department may

 4  extend the disposal period for an additional reasonable time.

 5         (2)  Any property or securities lawfully acquired and

 6  held by an insurer after expiration of the period for disposal

 7  thereof or any extension of such period granted by the office

 8  department shall not be allowed as an asset of the insurer.

 9         Section 891.  Paragraph (d) of subsection (3) and

10  subsection (4) of section 625.52, Florida Statutes, are

11  amended to read:

12         625.52  Securities eligible for deposit.--

13         (3)  To be eligible for deposit under paragraph (1)(h),

14  any certificate of deposit must have the following

15  characteristics:

16         (d)  The issuing bank, savings bank, or savings

17  association must agree to the terms and conditions of the

18  department State Treasurer regarding the rights to the

19  certificate of deposit and must have executed a written

20  certificate of deposit agreement with the department State

21  Treasurer.  The terms and conditions of such agreement shall

22  include, but need not be limited to:

23         1.  Exclusive authorized signature authority for the

24  Chief Financial Officer State Treasurer.

25         2.  Agreement to pay, without protest, the proceeds of

26  its certificate of deposit to the department within 30

27  business days after presentation.

28         3.  Prohibition against levies, setoffs, survivorship,

29  or other conditions that might hinder the department's ability

30  to recover the full face value of a certificate of deposit.

31  

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 1         4.  Instructions regarding interest payments, renewals,

 2  taxpayer identification, and early withdrawal penalties.

 3         5.  Agreement to be subject to the jurisdiction of the

 4  courts of this state, or those of the United States which are

 5  located in this state, for the purposes of any litigation

 6  arising out of this section.

 7         6.  Such other conditions as the department requires.

 8         (4)  The office or department may refuse to accept

 9  certain securities or refuse to accept the reported market

10  value of certain securities offered pursuant to this section

11  in order to ensure that sufficient cash and securities are on

12  hand to meet the purposes of the deposit. In making a refusal

13  under this subsection, the guidelines for use of the office or

14  department may include, but need not be limited to, whether

15  the market value of the securities cannot be readily

16  ascertained and the lack of liquidity of the securities.

17  Securities refused under this subsection are not acceptable as

18  deposits.

19         Section 892.  Subsection (2) of section 625.53, Florida

20  Statutes, is amended to read:

21         625.53  Depository.--

22         (2)  The department shall hold all such deposits in

23  safekeeping in the vaults located in the offices of the

24  department Treasurer.

25         Section 893.  Subsections (5) of section 625.55,

26  Florida Statutes, is amended to read:

27         625.55  Custodial arrangements.--

28         (5)  The department or office may at any time, in its

29  discretion, terminate any such custodial arrangement and

30  require the deposit represented thereby to be made with it

31  directly as otherwise provided for under this code.

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 1         Section 894.  Subsection (1) of section 625.56, Florida

 2  Statutes, is amended to read:

 3         625.56  Registration, conveyance of assets or

 4  securities.--

 5         (1)  The insurer shall duly register in the name of the

 6  Chief Financial Officer department all securities being

 7  deposited with the department under this code which are not

 8  negotiable by delivery.

 9         Section 895.  Section 625.57, Florida Statutes, is

10  amended to read:

11         625.57  Appraisal.--The office or department may, in

12  its discretion, prior to acceptance for deposit of any

13  particular asset or security, or at any time thereafter while

14  so deposited, have the same appraised or valued by competent

15  appraisers.  The reasonable costs of any such appraisal or

16  valuation shall be borne by the insurer.

17         Section 896.  Section 625.58, Florida Statutes, is

18  amended to read:

19         625.58  Excess and deficit deposits.--

20         (1)  If securities or assets deposited by an insurer

21  under this part are subject to material fluctuations in market

22  value, the office or department may, in its discretion,

23  require the insurer to deposit and maintain on deposit

24  additional securities or assets in an amount as may be

25  reasonably necessary to assure that the deposit will at all

26  times have a market value of not less than the amount

27  specified under or pursuant to the law by which the deposit is

28  required.

29         (2)  The insurer is responsible at all times for having

30  deposited with, or pledged to, if custodial arrangements are

31  used, the department eligible securities which have a market

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 1  value of not less than the amount specified pursuant to the

 2  law by which the deposit is required.  If for any reason the

 3  market value of assets and securities of an insurer held on

 4  deposit in this state under this code falls below the amount

 5  required, the insurer shall promptly deposit other or

 6  additional assets or securities eligible for deposit

 7  sufficient to cure such deficiency.  If the insurer has failed

 8  to cure the deficiency within 30 days after receipt of notice

 9  thereof by registered or certified mail from the office

10  department, the office department shall revoke the insurer's

11  certificate of authority or may take such other administrative

12  action as provided by law.

13         (3)  An insurer may at its option deposit assets or

14  securities in an amount exceeding its deposit required or

15  otherwise permitted under this code by not more than 3 times

16  the amount of the required or permitted deposit for the

17  purpose of satisfying the office department that the insurer's

18  obligations in this state will be met.  During the solvency of

19  the insurer, the amount of any excess or a portion thereof

20  shall be released to the insurer if the office department is

21  satisfied that the insurer's obligations in this state will be

22  met.  During the insolvency of the insurer, the amount of any

23  excess deposit shall be released only as provided in s.

24  625.62.

25         Section 897.  Paragraph (c) of subsection (2) of

26  section 625.62, Florida Statutes, is amended to read:

27         625.62  Duration and release of deposit.--

28         (2)  Any such deposit, whether in the form of a

29  certificate of deposit or otherwise, shall be released and

30  returned:

31  

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 1         (c)  To the insurer, during solvency, upon its written

 2  request, when such insurer has met all requirements and the

 3  office department is satisfied, or, for deposits made under s.

 4  625.51(2) or (3), the department is satisfied, that the

 5  deposit is no longer necessary.

 6         Section 898.  Section 625.63, Florida Statutes, is

 7  amended to read:

 8         625.63  Proofs for release of deposit.--

 9         (1)  Before authorizing the release of any deposit or

10  excess portion thereof to the insurer, as provided in s.

11  625.62, the office or department shall require the insurer to

12  file with the office or department a written statement in such

13  form and with such verification as the office or department

14  deems advisable setting forth the facts upon which it bases

15  its entitlement to such release.

16         (2)  If release of the deposit is claimed by the

17  insurer upon the ground that its liabilities in this state, as

18  to which the deposit was originally made and is held, have

19  been assumed by another insurer authorized to transact

20  insurance in this state, the insurer shall file with the

21  office department a duly attested copy of the contract or

22  agreement of such reinsurance.

23         (3)  Upon being satisfied by such statement and such

24  other information and evidence as the office or department may

25  reasonably require, and by such examination, if any, of the

26  affairs of the insurer as it deems advisable to make, that the

27  insurer is entitled to the release of its deposits or excess

28  portions thereof as provided in s. 625.62, the office or

29  department shall release, or authorize the custodian bank or

30  trust company in the case of deposits made under s. 625.55 to

31  release, the deposit or excess portion thereof to the insurer

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 1  or its authorized representative.  The office and department

 2  shall have no liability as to any such release so made or

 3  authorized by it in good faith.

 4         (4)  The department may release a deposit upon sending

 5  notification by certified mail to the public official having

 6  supervision over insurers in another state, province, or

 7  country that has filed a notification of reliance on a deposit

 8  made pursuant to s. 625.51(2) unless the release is denied in

 9  writing to the department by another state, province, or

10  country within 90 days.  The department has no liability as to

11  any such release so made or authorized by it in good faith.

12         (5)  Upon the failure of the office or department to

13  release any deposit whether in the form of a certificate of

14  deposit or otherwise or any excess portion thereof, requested

15  as provided in s. 625.62 upon compliance by the insurer with

16  the requirements of this section or within 90 days after

17  receipt of the insurer's written request, whichever is later,

18  the office or department shall, upon petition by the insurer,

19  post or cause to be posted a notice of pendency of the

20  insurer's request, at the place customarily used for the

21  posting of public notices, at the courthouse of each county,

22  and shall make a copy of such notice available to the

23  established news agencies having offices at Tallahassee,

24  Florida. The commission or department may by rule prescribe

25  the general form of such notice, shall specify the insurer's

26  name, or may list such names when more than one request is

27  pending at the same time.  Such notice shall state therein

28  that such insurer or insurers have petitioned for the release

29  and return of deposits pursuant to and in compliance with s.

30  625.62 and this section; that the office or department has no

31  information upon which to base a finding that the insurer or

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 1  insurers named in the notice are not lawfully entitled to

 2  obtain the release and return of such deposits; and that,

 3  unless such information is presented to it within 90 days from

 4  the date specified in the notice, such deposits must be

 5  returned to the insurer or insurers. In the event that no such

 6  information is presented to the office or department within

 7  such 90-day period, it shall thereupon release and return the

 8  deposit or deposits as requested by the insurer or insurers

 9  whose request was not challenged.  In the event that such

10  information is presented to the office or department within

11  that period, it shall refuse to release or return the deposit

12  of the insurer or insurers concerned and shall hold a hearing

13  with respect thereto upon the request of such insurer or

14  insurers.

15         Section 899.  Section 625.75, Florida Statutes, is

16  amended to read:

17         625.75  Certain persons and directors and officers of

18  domestic stock insurer to file statements.--Every person who

19  is directly or indirectly the beneficial owner of more than 10

20  percent of any class of any equity security of a domestic

21  stock insurer, or who is a director or an officer of a

22  domestic stock insurer, shall file with in the office of the

23  department within 10 days after becoming such beneficial

24  owner, director, or officer a statement, in such form as the

25  commission department may by rule prescribe, of the amount of

26  all equity securities of such insurer of which he or she is

27  the beneficial owner; within 10 days after the close of each

28  calendar month thereafter, if there has been a change in such

29  ownership during such month, he or she shall file with in the

30  office of the department a statement, in such form as the

31  commission department may by rule prescribe, indicating his or

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 1  her ownership of such equity securities at the close of the

 2  calendar month and such changes in his or her ownership of

 3  such equity securities as have occurred during such calendar

 4  month.

 5         Section 900.  Section 625.765, Florida Statutes, is

 6  amended to read:

 7         625.765  Exemptions from ss. 625.75 and 625.76.--The

 8  commission department may adopt by rule exemptions from ss.

 9  625.75 and 625.76 for transactions that are not subject to s.

10  628.461 and that are the result of proceedings in probate,

11  incompetency, or bankruptcy; sales of securities by odd-lot

12  securities dealers; small transactions by gift which do not

13  exceed $3,000 over any 6-month period; transactions that are

14  effected in connection with the distribution of a substantial

15  block of securities; acquisitions of shares of stock and stock

16  options under a stock bonus plan, stock option plan, or

17  similar plan; securities acquired by redeeming other

18  securities by an insurer; consolidations or mergers of

19  insurers that hold over 85 percent of the companies being

20  merged or consolidated; acquisitions or dispositions of an

21  equity security involved in the deposit of the security under,

22  or the withdrawal of the security from, a voting trust or

23  deposit agreement; and conversions of an insurer's equity

24  securities into another equity security of the same insurer.

25  The commission department may limit by rule the scope of

26  exemptions and provide conditions for exemptions as necessary

27  to maintain the purpose and intent of ss. 625.75 and 625.76

28  and prevent the circumvention of ss. 625.75 and 625.76.

29         Section 901.  Section 625.78, Florida Statutes, is

30  amended to read:

31  

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 1         625.78  Certain sale and purchase exempted; investment

 2  account.--The provisions of s. 625.76 do not apply to any

 3  purchase and sale, or sale and purchase, and the provisions of

 4  s. 625.77 do not apply to any sale, of an equity security of a

 5  domestic stock insurer not then or theretofore held by a

 6  person required to report under s. 625.75 in an investment

 7  account, which transaction is by a dealer in the ordinary

 8  course of business and incident to the establishment or

 9  maintenance by him or her of a primary or secondary market,

10  other than on an exchange as defined in the Securities

11  Exchange Act of 1934, for such security.  The commission

12  department may, by such rules as it deems necessary or

13  appropriate in the public interest, define and prescribe terms

14  and conditions with respect to securities held in an

15  investment account and transactions made in the ordinary

16  course of business and incident to the establishment or

17  maintenance of a primary or secondary market.

18         Section 902.  Section 625.79, Florida Statutes, is

19  amended to read:

20         625.79  Certain foreign or domestic arbitrage

21  transactions exempted.--The provisions of ss. 625.75-625.77 do

22  not apply to foreign or domestic arbitrage transactions unless

23  made in contravention of rules that which the commission has

24  adopted department may adopt.

25         Section 903.  Section 625.80, Florida Statutes, is

26  amended to read:

27         625.80  "Equity security" defined.--The term "equity

28  security" when used in this part means:

29         (1)  Any stock or similar security;

30  

31  

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 1         (2)  Any security convertible, with or without

 2  consideration, into such a security, or carrying any warrant

 3  or right to subscribe to or purchase such a security;

 4         (3)  Any such warrant or right; or

 5         (4)  Any other security which the commission department

 6  deems to be of similar nature and considers necessary or

 7  appropriate, by such rules as it may prescribe in the public

 8  interest or for the protection of investors, to treat as an

 9  equity security.

10         Section 904.  Section 625.82, Florida Statutes, is

11  amended to read:

12         625.82  Rules.--The commission may adopt department

13  shall have the power to make such rules as are may be

14  necessary for the execution of the functions vested in it by

15  ss. 625.75-625.81 and may for such purpose classify domestic

16  stock insurers, securities, and other persons or matters

17  within its jurisdiction.  No provision of ss. 625.75-625.77

18  imposing any liability shall apply to any act done or omitted

19  in good faith in conformity with any rule of the commission

20  department, notwithstanding that such rule may, after such act

21  or omission, be amended or rescinded or determined by judicial

22  or other authority to be invalid for any reason.

23         Section 905.  Section 625.83, Florida Statutes, is

24  amended to read:

25         625.83  Failure to file reporting forms.--Any insurer

26  who knowingly fails to file information, documents, or reports

27  required to be filed under s. 625.75 or any rule thereunder

28  shall forfeit to the state the sum of $100 for each day such

29  failure to file continues.  Such forfeiture shall be payable

30  to the office Treasurer to be deposited in the Insurance

31  Commissioner's Regulatory Trust Fund and shall be recoverable

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 1  in a civil suit in the name of the state.  A time for filing

 2  may be extended for a reasonable period by the office

 3  department.

 4         Section 906.  Subsection (6) of section 626.015,

 5  Florida Statutes, is repealed and present subsection (11) of

 6  that section is amended to read:

 7         626.015  Definitions.--As used in this part:

 8         (10)(11)  "License" means a document issued by the

 9  department or office authorizing a person to be appointed to

10  transact insurance or adjust claims for the kind, line, or

11  class of insurance identified in the document.

12         Section 907.  Section 626.016, Florida Statutes, is

13  created to read:

14         626.016  Powers and duties of department, commission,

15  and office.--

16         (1)  The powers and duties of the Chief Financial

17  Officer and the department specified in this chapter apply

18  only with respect to insurance agents, managing general

19  agents, reinsurance intermediaries, viatical settlement

20  brokers, customer representatives, service representatives,

21  agencies, and unlicensed persons subject to the regulatory

22  jurisdiction of the department.

23         (2)  The powers and duties of the commission and office

24  specified in this chapter apply only with respect to insurance

25  adjusters, service companies, administrators, viatical

26  settlement providers and contracts, and unlicensed persons

27  subject to the regulatory jurisdiction of the commission and

28  office.

29         (3)  The department has jurisdiction to enforce

30  provisions of this chapter with respect to persons who engage

31  in actions for which a license issued by the department is

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 1  legally required. The office has jurisdiction to enforce

 2  provisions of this chapter with respect to persons who engage

 3  in actions for which a license or certificate of authority

 4  issued by the office is legally required. For persons who

 5  violate a provision of this chapter for whom a license or

 6  certificate of authority issued by either the department or

 7  office is not required, either the department or office may

 8  take administrative action against such person as authorized

 9  by this chapter, pursuant to agreement between the office and

10  department.

11         (4)  Nothing in this section is intended to limit the

12  authority of the department and the Division of Insurance

13  Fraud, as specified in s. 626.989.

14         Section 908.  Subsection (16) of section 626.025,

15  Florida Statutes, is amended to read:

16         626.025  Consumer protections.--To transact insurance,

17  agents shall comply with consumer protection laws, including

18  the following, as applicable:

19         (16)  Any other licensing requirement, restriction, or

20  prohibition designated a consumer protection by the Chief

21  Financial Officer Insurance Commissioner, but not inconsistent

22  with the requirements of Subtitle C of the Gramm-Leach-Bliley

23  Act, 15 U.S.C.A. ss. 6751 et seq.

24         Section 909.  Paragraph (a) of subsection (1) of

25  section 626.112, Florida Statutes, is amended to read:

26         626.112  License and appointment required; agents,

27  customer representatives, adjusters, insurance agencies,

28  service representatives, managing general agents.--

29         (1)(a)  No person may be, act as, or advertise or hold

30  himself or herself out to be an insurance agent, or customer

31  representative, or adjuster unless he or she is currently

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 1  licensed by the department and appointed by one or more

 2  insurers. No person may be, act as, or advertise or hold

 3  himself or herself out to be an insurance adjuster unless he

 4  or she is currently licensed by the office and appointed by

 5  one or more insurers.

 6  

 7  However, an employee leasing company licensed pursuant to

 8  chapter 468 which is seeking to enter into a contract with an

 9  employer that identifies products and services offered to

10  employees may deliver proposals for the purchase of employee

11  leasing services to prospective clients of the employee

12  leasing company setting forth the terms and conditions of

13  doing business; classify employees as permitted by s. 468.529;

14  collect information from prospective clients and other sources

15  as necessary to perform due diligence on the prospective

16  client and to prepare a proposal for services; provide and

17  receive enrollment forms, plans, and other documents; and

18  discuss or explain in general terms the conditions,

19  limitations, options, or exclusions of insurance benefit plans

20  available to the client or employees of the employee leasing

21  company were the client to contract with the employee leasing

22  company. Any advertising materials or other documents

23  describing specific insurance coverages must identify and be

24  from a licensed insurer or its licensed agent or a licensed

25  and appointed agent employed by the employee leasing company.

26  The employee leasing company may not advise or inform the

27  prospective business client or individual employees of

28  specific coverage provisions, exclusions, or limitations of

29  particular plans. As to clients for which the employee leasing

30  company is providing services pursuant to s. 468.525(4), the

31  employee leasing company may engage in activities permitted by

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 1  ss. 626.7315, 626.7845, and 626.8305, subject to the

 2  restrictions specified in those sections. If a prospective

 3  client requests more specific information concerning the

 4  insurance provided by the employee leasing company, the

 5  employee leasing company must refer the prospective business

 6  client to the insurer or its licensed agent or to a licensed

 7  and appointed agent employed by the employee leasing company.

 8         Section 910.  Section 626.161, Florida Statutes, is

 9  amended to read:

10         626.161  Licensing forms.--The department shall

11  prescribe and furnish all printed forms required in connection

12  with the application for issuance of and termination of all

13  licenses and appointments, except that, with respect to

14  adjusters, the commission shall prescribe and the office shall

15  furnish such forms.

16         Section 911.  Subsections (1), (2), and (5) of section

17  626.171, Florida Statutes, are amended to read:

18         626.171  Application for license.--

19         (1)  The department or office shall not issue a license

20  as agent, customer representative, adjuster, insurance agency,

21  service representative, managing general agent, or reinsurance

22  intermediary to any person except upon written application

23  therefor filed with it, qualification therefor, and payment in

24  advance of all applicable fees. Any such application shall be

25  made under the oath of the applicant and be signed by the

26  applicant. Beginning November 1, 2002, the department shall

27  accept the uniform application for nonresident agent

28  licensing. The department may adopt revised versions of the

29  uniform application by rule.

30         (2)  In the application, the applicant shall set forth:

31  

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 1         (a)  His or her full name, age, social security number,

 2  residence, and place of business.

 3         (b)  Proof that he or she has completed or is in the

 4  process of completing any required prelicensing course.

 5         (c)  Whether he or she has been refused or has

 6  voluntarily surrendered or has had suspended or revoked a

 7  license to solicit insurance by the department or by the

 8  supervising officials of any state.

 9         (d)  Whether any insurer or any managing general agent

10  claims the applicant is indebted under any agency contract or

11  otherwise and, if so, the name of the claimant, the nature of

12  the claim, and the applicant's defense thereto, if any.

13         (e)  Proof that the applicant meets the requirements

14  for the type of license for which he or she is applying.

15         (f)  Such other or additional information as the

16  department or office may deem proper to enable it to determine

17  the character, experience, ability, and other qualifications

18  of the applicant to hold himself or herself out to the public

19  as an insurance representative.

20         (5)  An application for a license as an agent, customer

21  representative, adjuster, insurance agency, service

22  representative, managing general agent, or reinsurance

23  intermediary must be accompanied by a set of the individual

24  applicant's fingerprints, or, if the applicant is not an

25  individual, by a set of the fingerprints of the sole

26  proprietor, majority owner, partners, officers, and directors,

27  on a form adopted by rule of the department or commission and

28  accompanied by the fingerprint processing fee set forth in s.

29  624.501.  The fingerprints shall be certified by a law

30  enforcement officer.

31  

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 1         Section 912.  Section 626.181, Florida Statutes, is

 2  amended to read:

 3         626.181  Number of applications for licensure

 4  required.--After a license as agent, customer representative,

 5  or adjuster has been issued to an individual, the same

 6  individual shall not be required to take another examination

 7  for a similar license, regardless, in the case of an agent, of

 8  the number of insurers to be represented by him or her as

 9  agent, unless:

10         (1)  Specifically ordered by the department or office

11  to complete a new application for license; or

12         (2)  During any period of 48 months since the filing of

13  the original license application, such individual was not

14  appointed as an agent, customer representative, or adjuster,

15  unless the failure to be so appointed was due to military

16  service, in which event the period within which a new

17  application is not required may, in the discretion of the

18  department or office, be extended to 12 months following the

19  date of discharge from military service if the military

20  service does not exceed 3 years, but in no event to extend

21  under this clause for a period of more than 6 years from the

22  date of filing of the original application for license.

23         Section 913.  Section 626.191, Florida Statutes, is

24  amended to read:

25         626.191  Repeated applications.--The failure of an

26  applicant to secure a license upon an application shall not

27  preclude him or her from applying again as many times as

28  desired, but the department or office shall not give

29  consideration to or accept any further application by the same

30  individual for a similar license dated or filed within 30 days

31  

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 1  subsequent to the date the department or office denied the

 2  last application, except as provided in s. 626.281.

 3         Section 914.  Section 626.201, Florida Statutes, is

 4  amended to read:

 5         626.201  Investigation.--The department or office may

 6  propound any reasonable interrogatories in addition to those

 7  contained in the application, to any applicant for license or

 8  appointment, or on any renewal, reinstatement, or continuation

 9  thereof, relating to his or her qualifications, residence,

10  prospective place of business, and any other matter which, in

11  the opinion of the department or office, is deemed necessary

12  or advisable for the protection of the public and to ascertain

13  the applicant's qualifications. The department or office may,

14  upon completion of the application, make such further

15  investigation as it may deem advisable of the applicant's

16  character, experience, background, and fitness for the license

17  or appointment.  Such an inquiry or investigation shall be in

18  addition to any examination required to be taken by the

19  applicant as hereinafter in this chapter provided.

20         Section 915.  Section 626.202, Florida Statutes, is

21  amended to read:

22         626.202  Fingerprinting requirements.--If there is a

23  change in ownership or control of any entity licensed under

24  this chapter, or if a new partner, officer, or director is

25  employed or appointed, a set of fingerprints of the new owner,

26  partner, officer, or director must be filed with the

27  department or office within 30 days after the change. The

28  acquisition of 10 percent or more of the voting securities of

29  a licensed entity is considered a change of ownership or

30  control. The fingerprints must be certified by a law

31  

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 1  enforcement officer and be accompanied by the fingerprint

 2  processing fee in s. 624.501.

 3         Section 916.  Section 626.211, Florida Statutes, is

 4  amended to read:

 5         626.211  Approval, disapproval of application.--

 6         (1)  If upon the basis of a completed application for

 7  license and such further inquiry or investigation as the

 8  department or office may make concerning an applicant the

 9  department or office is satisfied that, subject to any

10  examination required to be taken and passed by the applicant

11  for a license, the applicant is qualified for the license

12  applied for and that all pertinent fees have been paid, it

13  shall approve the application.  The department or office shall

14  not deny, delay, or withhold approval of an application due to

15  the fact that it has not received a criminal history report

16  based on the applicant's fingerprints.

17         (2)  Upon approval of an applicant for license as

18  agent, customer representative, or adjuster who is subject to

19  written examination, the department or office shall notify the

20  applicant when and where he or she may take the required

21  examination.

22         (3)  Upon approval of an applicant for license who is

23  not subject to examination, the department or office shall

24  promptly issue the license.

25         (4)  If upon the basis of the completed application and

26  such further inquiry or investigation the department or office

27  deems the applicant to be lacking in any one or more of the

28  required qualifications for the license applied for, the

29  department or office shall disapprove the application and

30  notify the applicant, stating the grounds of disapproval.

31  

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 1         Section 917.  Section 626.221, Florida Statutes, is

 2  amended to read:

 3         626.221  Examination requirement; exemptions.--

 4         (1)  The department or office shall not issue any

 5  license as agent, customer representative, or adjuster to any

 6  individual who has not qualified for, taken, and passed to the

 7  satisfaction of the department or office a written examination

 8  of the scope prescribed in s. 626.241.

 9         (2)  However, no such examination shall be necessary in

10  any of the following cases:

11         (a)  An applicant for renewal of appointment as an

12  agent, customer representative, or adjuster, unless the

13  department or office determines that an examination is

14  necessary to establish the competence or trustworthiness of

15  such applicant.

16         (b)  An applicant for limited license as agent for

17  personal accident insurance, baggage and motor vehicle excess

18  liability insurance, credit life or disability insurance,

19  credit insurance, credit property insurance, in-transit and

20  storage personal property insurance, or communications

21  equipment property insurance or communication equipment inland

22  marine insurance.

23         (c)  In the discretion of the department or office, an

24  applicant for reinstatement of license or appointment as an

25  agent, customer representative, or adjuster whose license has

26  been suspended within 2 years prior to the date of application

27  or written request for reinstatement.

28         (d)  An applicant who, within 2 years prior to

29  application for license and appointment as an agent, customer

30  representative, or adjuster, was a full-time salaried employee

31  of the department or office and had continuously been such an

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 1  employee with responsible insurance duties for not less than 2

 2  years and who had been a licensee within 2 years prior to

 3  employment by the department or office with the same class of

 4  license as that being applied for.

 5         (e)  An individual who qualified as a managing general

 6  agent, service representative, customer representative, or

 7  all-lines adjuster by passing a general lines agent's

 8  examination and subsequently was licensed and appointed and

 9  has been actively engaged in all lines of property and

10  casualty insurance may, upon filing an application for

11  appointment, be licensed and appointed as a general lines

12  agent for the same kinds of business without taking another

13  examination if he or she holds any such currently effective

14  license referred to in this paragraph or held the license

15  within 24 months prior to the date of filing the application

16  with the department.

17         (f)  A person who has been licensed and appointed by

18  the department as a public adjuster or independent adjuster,

19  or licensed and appointed either as an agent or company

20  adjuster as to all property, casualty, and surety insurances,

21  may be licensed and appointed as a company adjuster as to any

22  of such insurances, or as an independent adjuster or public

23  adjuster, without additional written examination if an

24  application for appointment is filed with the office

25  department within 24 months following the date of cancellation

26  or expiration of the prior appointment.

27         (g)  A person who has been licensed by the department

28  as an adjuster for motor vehicle, property and casualty,

29  workers' compensation, and health insurance may be licensed as

30  such an adjuster without additional written examination if his

31  or her application for appointment is filed with the office

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 1  department within 24 months after cancellation or expiration

 2  of the prior license.

 3         (h)  An applicant for temporary license, except as

 4  provided in this code.

 5         (i)  An applicant for a life or health license who has

 6  received the designation of chartered life underwriter (CLU)

 7  from the American College of Life Underwriters and who has

 8  been engaged in the insurance business within the past 4

 9  years, except that such an individual may be examined on

10  pertinent provisions of this code.

11         (j)  An applicant for license as a general lines agent,

12  customer representative, or adjuster who has received the

13  designation of chartered property and casualty underwriter

14  (CPCU) from the American Institute for Property and Liability

15  Underwriters and who has been engaged in the insurance

16  business within the past 4 years, except that such an

17  individual may be examined on pertinent provisions of this

18  code.

19         (k)  An applicant for license as a customer

20  representative who has the designation of Accredited Advisor

21  in Insurance (AAI) from the Insurance Institute of America,

22  the designation of Certified Insurance Counselor (CIC) from

23  the Society of Certified Insurance Service Counselors, the

24  designation of Accredited Customer Service Representative

25  (ACSR) from the Independent Insurance Agents of America, the

26  designation of Certified Professional Service Representative

27  (CPSR) from the National Association of Professional Insurance

28  Agents, the designation of Certified Insurance Service

29  Representative (CISR) from the Society of Certified Insurance

30  Service Representatives. Also, an applicant for license as a

31  customer representative who has the designation of Certified

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 1  Customer Service Representative (CCSR) from the Florida

 2  Association of Insurance Agents, or the designation of

 3  Registered Customer Service Representative (RCSR) from a

 4  regionally accredited postsecondary institution in this state,

 5  or the designation of Professional Customer Service

 6  Representative (PCSR) from the Professional Career Institute,

 7  whose curriculum has been approved by the department and whose

 8  curriculum includes comprehensive analysis of basic property

 9  and casualty lines of insurance and testing at least equal to

10  that of standard department testing for the customer

11  representative license. The department shall adopt rules

12  establishing standards for the approval of curriculum.

13         (l)  An applicant for license as an adjuster who has

14  the designation of Accredited Claims Adjuster (ACA) from a

15  regionally accredited postsecondary institution in this state,

16  or the designation of Professional Claims Adjuster (PCA) from

17  the Professional Career Institute, whose curriculum has been

18  approved by the office department and whose curriculum

19  includes comprehensive analysis of basic property and casualty

20  lines of insurance and testing at least equal to that of

21  standard office department testing for the all-lines adjuster

22  license. The commission department shall adopt rules

23  establishing standards for the approval of curriculum.

24         (m)  An applicant qualifying for a license transfer

25  under s. 626.292, if the applicant:

26         1.  Has successfully completed the prelicensing

27  examination requirements in the applicant's previous state

28  which are substantially equivalent to the examination

29  requirements in this state, as determined by the department

30  Insurance Commissioner of this state;

31  

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 1         2.  Has received the designation of chartered property

 2  and casualty underwriter (CPCU) from the American Institute

 3  for Property and Liability Underwriters and has been engaged

 4  in the insurance business within the past 4 years if applying

 5  to transfer a general lines agent license; or

 6         3.  Has received the designation of chartered life

 7  underwriter (CLU) from the American College of Life

 8  Underwriters and has been engaged in the insurance business

 9  within the past 4 years, if applying to transfer a life or

10  health agent license.

11         (n)  An applicant for a nonresident agent license, if

12  the applicant:

13         1.  Has successfully completed prelicensing examination

14  requirements in the applicant's home state which are

15  substantially equivalent to the examination requirements in

16  this state, as determined by the department Insurance

17  Commissioner of this state, as a requirement for obtaining a

18  resident license in his or her home state;

19         2.  Held a general lines agent license, life agent

20  license, or health agent license prior to the time a written

21  examination was required;

22         3.  Has received the designation of chartered property

23  and casualty underwriter (CPCU) from the American Institute

24  for Property and Liability Underwriters and has been engaged

25  in the insurance business within the past 4 years, if an

26  applicant for a nonresident license as a general lines agent;

27  or

28         4.  Has received the designation of chartered life

29  underwriter (CLU) from the American College of Life

30  Underwriters and has been in the insurance business within the

31  

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 1  past 4 years, if an applicant for a nonresident license as a

 2  life agent or health agent.

 3         (3)  An individual who is already licensed as a

 4  customer representative shall not be licensed as a general

 5  lines agent without application and examination for such

 6  license.

 7         Section 918.  Section 626.231, Florida Statutes, is

 8  amended to read:

 9         626.231  Eligibility for examination.--No person shall

10  be permitted to take an examination for license until his or

11  her application for the license has been approved and the

12  required fees have been received by the department or office

13  or a person designated by the department or office to

14  administer the examination.

15         Section 919.  Subsection (1) of section 626.241,

16  Florida Statutes, is amended to read:

17         626.241  Scope of examination.--

18         (1)  Each examination for a license as agent, customer

19  representative, or adjuster shall be of such scope as is

20  deemed by the department or office to be reasonably necessary

21  to test the applicant's ability and competence and knowledge

22  of the kinds of insurance and transactions to be handled under

23  the license applied for, of the duties and responsibilities of

24  such a licensee, and of the pertinent provisions of the laws

25  of this state.

26         Section 920.  Section 626.251, Florida Statutes, is

27  amended to read:

28         626.251  Time and place of examination; notice.--

29         (1)  The department or office or a person designated by

30  the department or office shall mail written notice of the time

31  and place of the examination to each applicant for license

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 1  required to take an examination who will be eligible to take

 2  the examination as of the examination date.  The notice shall

 3  be so mailed, postage prepaid, and addressed to the applicant

 4  at his or her address shown on the application for license or

 5  at such other address as requested by the applicant in writing

 6  filed with the department or office prior to the mailing of

 7  the notice. Notice shall be deemed given when so mailed.

 8         (2)  The examination shall be held in an adequate and

 9  designated examination center in this state.

10         (3)  The department or office shall make an examination

11  available to the applicant, to be taken as soon as reasonably

12  possible after the applicant is eligible therefor.  Any

13  examination required under this part shall be available in

14  this state at a designated examination center.

15         Section 921.  Section 626.261, Florida Statutes, is

16  amended to read:

17         626.261  Conduct of examination.--

18         (1)  The applicant for license shall appear in person

19  and personally take the examination for license at the time

20  and place specified by the department or office or by a person

21  designated by the department or office.

22         (2)  The examination shall be conducted by an employee

23  of the department or office or a person designated by the

24  department or office for that purpose.

25         (3)  The questions propounded shall be as prepared by

26  the department or office, or by a person designated by the

27  department or office for that purpose, consistent with the

28  applicable provisions of this code.

29         (4)  All examinations shall be given and graded in a

30  fair and impartial manner and without unfair discrimination in

31  favor of or against any particular applicant.

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 1         Section 922.  Section 626.266, Florida Statutes, is

 2  amended to read:

 3         626.266  Printing of examinations or related materials

 4  to preserve examination security.--A contract let for the

 5  development, administration, or grading of examinations or

 6  related materials by the department or office of Insurance

 7  pursuant to the various agent, customer representative,

 8  solicitor, or adjuster licensing and examination provisions of

 9  this code may include the printing or furnishing of these

10  examinations or related materials in order to preserve

11  security. Any such contract shall be let as a contract for a

12  contractual service pursuant to s. 287.057.

13         Section 923.  Subsection (1) of section 626.271,

14  Florida Statutes, is amended to read:

15         626.271  Examination fee; determination, refund.--

16         (1)  Prior to being permitted to take an examination,

17  each applicant who is subject to examination shall pay to the

18  department or office or a person designated by the department

19  or office an examination fee.  A separate and additional

20  examination fee shall be payable for each separate class of

21  license applied for, notwithstanding that all such

22  examinations are taken on the same date and at the same place.

23         Section 924.  Section 626.281, Florida Statutes, is

24  amended to read:

25         626.281  Reexamination.--

26         (1)  Any applicant for license who has either:

27         (a)  Taken an examination and failed to make a passing

28  grade, or

29         (b)  Failed to appear for the examination or to take or

30  complete the examination at the time and place specified in

31  the notice of the department or office,

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 1  

 2  may take additional examinations, after filing with the

 3  department or office an application for reexamination together

 4  with applicable fees.  The failure of an applicant to pass an

 5  examination or the failure to appear for the examination or to

 6  take or complete the examination does not preclude the

 7  applicant from taking subsequent examinations.

 8         (2)  The department or office may require any

 9  individual whose license as an agent, customer representative,

10  or adjuster has expired or has been suspended to pass an

11  examination prior to reinstating or relicensing the individual

12  as to any class of license.  The examination fee shall be paid

13  as to each examination.

14         Section 925.  Subsections (5) and (6) of section

15  626.2815, Florida Statutes, are amended to read:

16         626.2815  Continuing education required; application;

17  exceptions; requirements; penalties.--

18         (5)  The department of Insurance shall refuse to renew

19  the appointment of any agent who has not had his or her

20  continuing education requirements certified unless the agent

21  has been granted an extension by the department. The

22  department may not issue a new appointment of the same or

23  similar type, with any insurer, to an agent who was denied a

24  renewal appointment for failure to complete continuing

25  education as required until the agent completes his or her

26  continuing education requirement.

27         (6)(a)  There is created an 11-member continuing

28  education advisory board to be appointed by the Chief

29  Financial Officer Insurance Commissioner and Treasurer.

30  Appointments shall be for terms of 4 years.  The purpose of

31  the board is to advise the department in determining standards

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 1  by which courses may be evaluated and categorized as basic,

 2  intermediate, or advanced. The board shall establish such

 3  criteria and the department shall implement such criteria by

 4  January 1, 1997.  The board shall submit recommendations to

 5  the department of changes needed in such criteria not less

 6  frequently than every 2 years thereafter. The department shall

 7  require all approved course providers to submit courses for

 8  approval to the department using the criteria.  All materials,

 9  brochures, and advertisements related to the approved courses

10  must specify the level assigned to the course.

11         (b)  The board members shall be appointed as follows:

12         1.  Seven members representing agents of which at least

13  one must be a representative from each of the following

14  organizations: the Florida Association of Insurance Agents;

15  the Florida Association of Life Underwriters; the Professional

16  Insurance Agents of Florida, Inc.; the Florida Association of

17  Health Underwriters; the Specialty Agents' Association; the

18  Latin American Agents' Association; and the National

19  Association of Insurance Women.  Such board members must

20  possess at least a bachelor's degree or higher from an

21  accredited college or university with major coursework in

22  insurance, risk management, or education or possess the

23  designation of CLU, CPCU, CHFC, CFP, AAI, or CIC.  In

24  addition, each member must possess 5 years of classroom

25  instruction experience or 5 years of experience in the

26  development or design of educational programs or 10 years of

27  experience as a licensed resident agent.  Each organization

28  may submit to the department a list of recommendations for

29  appointment.  If one organization does not submit a list of

30  recommendations, the Chief Financial Officer Insurance

31  

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 1  Commissioner may select more than one recommended person from

 2  a list submitted by other eligible organizations.

 3         2.  Two members representing insurance companies at

 4  least one of whom must represent a Florida Domestic Company

 5  and one of whom must represent the Florida Insurance Council.

 6  Such board members must be employed within the training

 7  department of the insurance company.  At least one such member

 8  must be a member of the Society of Insurance Trainers and

 9  Educators.

10         3.  One member representing the general public who is

11  not directly employed in the insurance industry. Such board

12  member must possess a minimum of a bachelor's degree or higher

13  from an accredited college or university with major coursework

14  in insurance, risk management, training, or education.

15         4.  One member, appointed by the Chief Financial

16  Officer Insurance Commissioner, who represents the department.

17         (c)  The members of the board shall serve at the

18  pleasure of the Chief Financial Officer Insurance Commissioner

19  and Treasurer.  Each board member shall be entitled to

20  reimbursement for expenses pursuant to s. 112.061.  The board

21  shall designate one member as chair.  The board shall meet at

22  the call of the chair or the Chief Financial Officer Insurance

23  Commissioner and Treasurer.

24         Section 926.  Section 626.2817, Florida Statutes, is

25  amended to read:

26         626.2817  Regulation of course providers, instructors,

27  school officials, and monitor groups involved in prelicensure

28  education for insurance agents and other licensees.--

29         (1)  Any course provider, instructor, school official,

30  or monitor group must be approved by and registered with the

31  

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 1  department or office before offering prelicensure education

 2  courses for insurance agents and other licensees.

 3         (2)  The department or commission shall adopt rules

 4  establishing standards for the approval, registration,

 5  discipline, or removal from registration of course providers,

 6  instructors, school officials, and monitor groups. The

 7  standards must be designed to ensure that such persons have

 8  the knowledge, competence, and integrity to fulfill the

 9  educational objectives of the prelicensure requirements of

10  this chapter and chapter 648 and to assure that insurance

11  agents and licensees are competent to engage in the activities

12  authorized under the license.

13         (3)  The department or commission shall adopt rules to

14  establish a process for determining compliance with the

15  prelicensure requirements of this chapter and chapter 648 and

16  shall establish a prelicensure cycle for insurance agents and

17  other licensees. The department or commission shall adopt

18  rules prescribing the forms necessary to administer the

19  prelicensure requirements.

20         Section 927.  Section 626.291, Florida Statutes, is

21  amended to read:

22         626.291  Denial, issuance of license.--

23         (1)  Within 30 days after the applicant has completed

24  any examination required under s. 626.221, the department or

25  office or its designee shall provide a score report; and, if

26  it finds that the applicant has received a passing grade, the

27  department or office shall within such period notify the

28  applicant and issue and transmit the license to which such

29  examination related.  If it finds that the applicant did not

30  make a passing grade on the examination for a particular

31  license, the department or office or its designee shall within

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 1  this period provide notice to the applicant to that effect and

 2  of its denial of the license.

 3         (2)  As to an applicant for a license for which no

 4  examination is required, the department or office shall

 5  promptly issue the license applied for as soon as it has

 6  approved the application.

 7         (3)  The department or office shall not deny, delay, or

 8  withhold issuance of a license due to the fact that it has not

 9  received a criminal history report based on the applicant's

10  fingerprints.

11         Section 928.  Paragraph (d) of subsection (2) of

12  section 626.292, Florida Statutes, is amended to read:

13         626.292  Transfer of license from another state.--

14         (2)  To qualify for a license transfer, an individual

15  applicant must meet the following requirements:

16         (d)  The individual shall satisfy prelicensing

17  education requirements in this state, unless the completion of

18  prelicensing education requirements was a prerequisite for

19  licensure in the other state and the prelicensing education

20  requirements in the other state are substantially equivalent

21  to the prelicensing requirements of this state as determined

22  by the department Insurance Commissioner of this state.

23         Section 929.  Section 626.301, Florida Statutes, is

24  amended to read:

25         626.301  Form and contents of licenses, in

26  general.--Each license issued by the department or office

27  shall be in such form as the department or commission may

28  designate and contain the licensee's name, lines of authority

29  the licensee is authorized to transact, the licensee's

30  personal identification number, the date of issuance, and any

31  other information the department or commission deems necessary

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 1  to fully identify the licensee and the authority being

 2  granted. The department or commission may by rule require

 3  photographs of applicants as a part of the licensing process.

 4         Section 930.  Section 626.322, Florida Statutes, is

 5  amended to read:

 6         626.322  License, appointment; certain military

 7  installations.--A natural person, not a resident of this

 8  state, may be licensed and appointed to represent an

 9  authorized life insurer domiciled in this state or an

10  authorized foreign life insurer which maintains a regional

11  home office in this state, provided such person represents

12  such insurer exclusively at a United States military

13  installation located in a foreign country. The department may,

14  upon request of the applicant and the insurer on application

15  forms furnished by the department and upon payment of fees as

16  prescribed in s. 624.501, issue a license and appointment to

17  such person.  The insurer shall certify to the department that

18  the applicant has the necessary training to hold himself or

19  herself out as a life insurance representative, and the

20  insurer shall further certify that it is willing to be bound

21  by the acts of such applicant within the scope of his or her

22  employment. Appointments shall be continued as prescribed in

23  s. 626.381 and upon payment of a fee as prescribed in s.

24  624.501, unless sooner terminated.  Such fees received shall

25  be credited to the Insurance Commissioner's Regulatory Trust

26  Fund as provided for in s. 624.523.

27         Section 931.  Section 626.361, Florida Statutes, is

28  amended to read:

29         626.361  Effective date of appointments.--All

30  appointments shall be submitted to the department or office on

31  a monthly basis no later than 45 days after the date of

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 1  appointment.  All appointments shall be effective as of the

 2  date requested on the appointment form.

 3         Section 932.  Section 626.371, Florida Statutes, is

 4  amended to read:

 5         626.371  Payment of fees, taxes for appointment period

 6  without appointment.--If, upon application and qualification

 7  for an appointment and such investigation as the department or

 8  office may make, it appears to the department or office that

 9  an individual who was formerly appointed has been actively

10  engaged or is currently actively engaged as such an appointee,

11  but without being appointed as required, the department or

12  office may, if it finds that such failure to be appointed was

13  an inadvertent error on the part of the insurer or employer so

14  represented, nevertheless issue the appointment as applied for

15  but subject to the condition that, before the appointment is

16  issued, all fees and taxes which would have been due had the

17  applicant been so appointed during such current and prior

18  periods, together with a continuation fee for such current and

19  prior terms of appointment, shall be paid to the department or

20  office.

21         Section 933.  Subsections (2), (3), and (4), of section

22  626.381, Florida Statutes, are amended to read:

23         626.381  Renewal, continuation, reinstatement, or

24  termination of appointment.--

25         (2)  Each appointing entity shall file with the

26  department or office the lists, statements, and information as

27  to appointees whose appointments are being renewed or

28  terminated, accompanied by payment of the applicable renewal

29  fees and taxes as prescribed in s. 624.501, by a date set

30  forth by the department or office following the month during

31  which the appointments will expire.

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 1         (3)  Renewal of an appointment which is received on a

 2  date set forth by the department or office in the succeeding

 3  month may be renewed by the department or office without

 4  penalty and shall be effective as of the day the appointment

 5  would have expired.

 6         (4)  Renewal of an appointment which is received by the

 7  department or office after the date set by the department or

 8  office may be accepted and effectuated by the department or

 9  office in its discretion if an additional appointment,

10  continuation, and reinstatement fee accompanies the renewal

11  pursuant to s. 624.501.

12         Section 934.  Subsection (2) of section 626.431,

13  Florida Statutes, is amended to read:

14         626.431  Effect of expiration of license and

15  appointment.--

16         (2)  When a licensee's last appointment for a

17  particular class of insurance has been terminated or not

18  renewed, the department or office must notify the licensee

19  that his or her eligibility for appointment as such an

20  appointee will expire unless he or she is appointed prior to

21  expiration of the 48-month period referred to in subsection

22  (3).

23         Section 935.  Section 626.451, Florida Statutes, is

24  amended to read:

25         626.451  Appointment of agent or other

26  representative.--

27         (1)  Each appointing entity appointing an agent,

28  adjuster, service representative, customer representative, or

29  managing general agent in this state shall file the

30  appointment with the department or office and, at the same

31  time, pay the applicable appointment fee and taxes.  Every

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 1  appointment shall be subject to the prior issuance of the

 2  appropriate agent's, adjuster's, service representative's,

 3  customer representative's, or managing general agent's

 4  license.

 5         (2)  As a part of each appointment there shall be a

 6  certified statement or affidavit of an appropriate officer or

 7  official of the appointing entity stating what investigation

 8  the appointing entity has made concerning the proposed

 9  appointee and his or her background and the appointing

10  entity's opinion to the best of its knowledge and belief as to

11  the moral character, fitness, and reputation of the proposed

12  appointee and any other information the department or office

13  may reasonably require relative to the proposed appointee.

14         (3)  In the appointment of an agent, adjuster, service

15  representative, customer representative, or managing general

16  agent the appointing entity shall also certify therein that it

17  is willing to be bound by the acts of the agent, adjuster,

18  service representative, customer representative, or managing

19  general agent, within the scope of his or her employment.

20         (4)  Each appointing entity shall advise the department

21  or office in writing within 15 days after it or its general

22  agent, officer, or other official becomes aware that an

23  appointee has pleaded guilty or nolo contendere to or has been

24  found guilty of a felony after being appointed.

25         (5)  Any law enforcement agency or state attorney's

26  office that is aware that an agent, adjuster, service

27  representative, customer representative, or managing general

28  agent has pleaded guilty or nolo contendere to or has been

29  found guilty of a felony shall notify the department or office

30  of such fact.

31  

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 1         (6)  Upon the filing of an information or indictment

 2  against an agent, adjuster, service representative, customer

 3  representative, or managing general agent, the state attorney

 4  shall immediately furnish the department or office a certified

 5  copy of the information or indictment.

 6         Section 936.  Section 626.461, Florida Statutes, is

 7  amended to read:

 8         626.461  Continuation of appointment of agent or other

 9  representative.--Subject to renewal or continuation by the

10  appointing entity, the appointment of the agent, adjuster,

11  solicitor, service representative, customer representative, or

12  managing general agent shall continue in effect until the

13  person's license is revoked or otherwise terminated, unless

14  written notice of earlier termination of the appointment is

15  filed with the department or office by either the appointing

16  entity or the appointee.

17         Section 937.  Subsections (2), (3), (4), and (5) of

18  section 626.471, Florida Statutes, are amended to read:

19         626.471  Termination of appointment.--

20         (2)  As soon as possible and at all events within 30

21  days after terminating the appointment of an appointee, other

22  than as to an appointment terminated by the appointing

23  entity's failure to continue or renew it, the appointing

24  entity shall file written notice thereof with the department

25  or office, together with a statement that it has given the

26  appointee notice thereof as provided in subsection (1) and

27  shall file with the department or office the reasons and facts

28  involved in such termination as required under s. 626.511.

29         (3)  Upon termination of the appointment of an

30  appointee, whether by failure to renew or continue the

31  appointment, the appointing entity shall:

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 1         (a)  File with the department or office the information

 2  required under s. 626.511.

 3         (b)  Subject to the exceptions provided under

 4  subsection (1), continue the outstanding contracts transacted

 5  by an agent until the expiration date or anniversary date when

 6  the policy is a continuous policy with no expiration date.

 7  This paragraph shall not be construed to prohibit the

 8  cancellation of such contracts when not otherwise prohibited

 9  by law.

10         (4)  An appointee may terminate the appointment at any

11  time by giving written notice thereof to the appointing entity

12  and filing a copy of the notice with the department or office.

13  Such termination shall be subject to the appointee's contract

14  rights, if any.

15         (5)  Upon receiving notice of termination, the

16  department or office shall terminate the appointment.

17         Section 938.  Section 626.511, Florida Statutes, is

18  amended to read:

19         626.511  Reasons for termination; confidential

20  information.--

21         (1)  Any insurer terminating the appointment of an

22  agent; any general lines agent terminating the appointment of

23  a customer representative or a crop hail or multiple-peril

24  crop insurance agent; and any employer terminating the

25  appointment of an adjuster, service representative, or

26  managing general agent, whether such termination is by direct

27  action of the appointing insurer, agent, or employer or by

28  failure to renew or continue the appointment as provided,

29  shall file with the department or office a statement of the

30  reasons, if any, for and the facts relative to such

31  termination.  In the case of termination of the appointment of

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 1  an agent, such information may be filed by the insurer or by

 2  the general agent of the insurer.

 3         (2)  In the case of terminations by failure to renew or

 4  continue the appointment, the information required under

 5  subsection (1) shall be filed with the department or office as

 6  soon as possible, and at all events within 30 days, after the

 7  date notice of intention not to so renew or continue was filed

 8  with the department or office as required in this chapter.  In

 9  all other cases, the information required under subsection (1)

10  shall be filed with the department or office at the time, or

11  at all events within 10 days after, notice of the termination

12  was filed with the department or office.

13         (3)  Any information, document, record, or statement

14  furnished to the department or office under subsection (1) is

15  confidential and exempt from the provisions of s. 119.07(1).

16         Section 939.  Subsections (2), (3), and (5) of section

17  626.521, Florida Statutes, are amended to read:

18         626.521  Character, credit reports.--

19         (2)  If requested by the department or office, the

20  insurer, manager, general agent, general lines agent, or

21  employer, as the case may be, shall furnish to the department

22  or office on a form adopted by the department or commission

23  and furnished by the department or office, such information as

24  it may reasonably require relative to such individual and

25  investigation.

26         (3)  As to an applicant for an adjuster's or

27  reinsurance intermediary's license who is to be self-employed,

28  the department or office may secure, at the cost of the

29  applicant, a full detailed credit and character report made by

30  an established and reputable independent reporting service

31  relative to the applicant.

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 1         (5)  Information contained in credit or character

 2  reports furnished to or secured by the department or office

 3  under this section is confidential and exempt from the

 4  provisions of s. 119.07(1).

 5         Section 940.  Subsections (1) and (2) of section

 6  626.541, Florida Statutes, are amended to read:

 7         626.541  Firm, corporate, and business names; officers;

 8  associates; notice of changes.--

 9         (1)  Any licensed agent or adjuster doing business

10  under a firm or corporate name or under any business name

11  other than his or her own individual name shall, within 30

12  days after the initial transaction of insurance under such

13  business name, file with the department or office, on forms

14  adopted by the department or commission and furnished by the

15  department or office it, a written statement of the firm,

16  corporate, or business name being so used, the address of any

17  office or offices or places of business making use of such

18  name, and the name and social security number of each officer

19  and director of the corporation and of each individual

20  associated in such firm or corporation as to the insurance

21  transactions thereof or in the use of such business name.

22         (2)  In the event of any change of such name, or of any

23  of the officers and directors, or of any of such addresses, or

24  in the personnel so associated, written notice of such change

25  must be filed with the department or office within 30 days by

26  or on behalf of those licensees terminating any such firm,

27  corporate, or business name or continuing to operate

28  thereunder.

29         Section 941.  Section 626.551, Florida Statutes, is

30  amended to read:

31  

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 1         626.551  Notice of change of address, name.--Every

 2  licensee shall notify the department or office in writing

 3  within 60 days after a change of name, residence address,

 4  principal business street address, or mailing address.  Any

 5  licensed agent who has moved his or her residence from this

 6  state shall have his or her license and all appointments

 7  immediately terminated by the department or office. Failure to

 8  notify the department or office within the required time

 9  period shall result in a fine not to exceed $250 for the first

10  offense and, for subsequent offenses, a fine of not less than

11  $500 or suspension or revocation of the license pursuant to s.

12  626.611 or s. 626.621.

13         Section 942.  Subsections (1) and (2) of section

14  626.561, Florida Statutes, are amended to read:

15         626.561  Reporting and accounting for funds.--

16         (1)  All premiums, return premiums, or other funds

17  belonging to insurers or others received by an agent, customer

18  representative, or adjuster in transactions under his or her

19  license are trust funds received by the licensee in a

20  fiduciary capacity. An agent shall keep the funds belonging to

21  each insurer for which he or she is not appointed, other than

22  a surplus lines insurer, in a separate account so as to allow

23  the department or office to properly audit such funds. The

24  licensee in the applicable regular course of business shall

25  account for and pay the same to the insurer, insured, or other

26  person entitled thereto.

27         (2)  The licensee shall keep and make available to the

28  department or office books, accounts, and records as will

29  enable the department or office to determine whether such

30  licensee is complying with the provisions of this code. Every

31  licensee shall preserve books, accounts, and records

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 1  pertaining to a premium payment for at least 3 years after

 2  payment; provided, however, the preservation of records by

 3  computer or photographic reproductions or records in

 4  photographic form shall constitute compliance with this

 5  requirement. All other records shall be maintained in

 6  accordance with s. 626.748.  The 3-year requirement shall not

 7  apply to insurance binders when no policy is ultimately issued

 8  and no premium is collected.

 9         Section 943.  Section 626.591, Florida Statutes, is

10  amended to read:

11         626.591  Penalty for violation of s. 626.581.--

12         (1)  If any insurer or agent is found by the department

13  to be in violation of s. 626.581, the department may, in its

14  discretion, suspend or revoke the insurer's certificate of

15  authority and the agent's license. If any insurer is found by

16  the office to be in violation of s. 626.581, the office may,

17  in its discretion, suspend or revoke the insurer's certificate

18  of authority.

19         (2)  Any such suspension or revocation shall be for a

20  period of not less than 6 months, and the insurer or agent

21  shall not subsequently be authorized or licensed to transact

22  insurance unless the office or department is satisfied that

23  the insurer or agent will not again violate any of the

24  provisions of s. 626.581.

25         Section 944.  Subsection (1) of section 626.592,

26  Florida Statutes, is amended to read:

27         626.592  Primary agents.--

28         (1)  Each person operating an insurance agency and each

29  location of a multiple location agency shall designate a

30  primary agent for each insurance agency location and shall

31  file the name of the person so designated, and the address of

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 1  the insurance agency location where he or she is primary

 2  agent, with the department of Insurance, on a form approved by

 3  the department. The designation of the primary agent may be

 4  changed at the option of the agency, and any change shall be

 5  effective upon notification to the department. Notice of

 6  change must be sent to the department within 30 days after

 7  such change.

 8         Section 945.  Section 626.601, Florida Statutes, is

 9  amended to read:

10         626.601  Improper conduct; inquiry; fingerprinting.--

11         (1)  The department or office may, upon its own motion

12  or upon a written complaint signed by any interested person

13  and filed with the department or office, inquire into any

14  alleged improper conduct of any licensed agent, adjuster,

15  service representative, managing general agent, customer

16  representative, title insurance agent, title insurance agency,

17  continuing education course provider, instructor, school

18  official, or monitor group under this code. The department or

19  office may thereafter initiate an investigation of any such

20  licensee if it has reasonable cause to believe that the

21  licensee has violated any provision of the insurance code.

22  During the course of its investigation, the department or

23  office shall contact the licensee being investigated unless it

24  determines that contacting such person could jeopardize the

25  successful completion of the investigation or cause injury to

26  the public.

27         (2)  In the investigation by the department or office

28  of the alleged misconduct, the licensee shall, whenever so

29  required by the department or office, cause his or her books

30  and records to be open for inspection for the purpose of such

31  inquiries.

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 1         (3)  The complaints against any licensee may be

 2  informally alleged and need not be in any such language as is

 3  necessary to charge a crime on an indictment or information.

 4         (4)  The expense for any hearings or investigations

 5  under this law, as well as the fees and mileage of witnesses,

 6  may be paid out of the appropriate fund.

 7         (5)  If the department or office, after investigation,

 8  has reason to believe that a licensee may have been found

 9  guilty of or pleaded guilty or nolo contendere to a felony or

10  a crime related to the business of insurance in this or any

11  other state or jurisdiction, the department or office may

12  require the licensee to file with the department or office a

13  complete set of his or her fingerprints, which shall be

14  accompanied by the fingerprint processing fee set forth in s.

15  624.501. The fingerprints shall be certified by an authorized

16  law enforcement officer.

17         (6)  The complaint and any information obtained

18  pursuant to the investigation by the department or office are

19  confidential and are exempt from the provisions of s. 119.07,

20  unless the department or office files a formal administrative

21  complaint, emergency order, or consent order against the

22  licensee. Nothing in this subsection shall be construed to

23  prevent the department or office from disclosing the complaint

24  or such information as it deems necessary to conduct the

25  investigation, to update the complainant as to the status and

26  outcome of the complaint, or to share such information with

27  any law enforcement agency.

28         Section 946.  Section 626.611, Florida Statutes, is

29  amended to read:

30         626.611  Grounds for compulsory refusal, suspension, or

31  revocation of agent's, title agency's, adjuster's, customer

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 1  representative's, service representative's, or managing

 2  general agent's license or appointment.--The department or

 3  office shall deny an application for, suspend, revoke, or

 4  refuse to renew or continue the license or appointment of any

 5  applicant, agent, title agency, adjuster, customer

 6  representative, service representative, or managing general

 7  agent, and it shall suspend or revoke the eligibility to hold

 8  a license or appointment of any such person, if it finds that

 9  as to the applicant, licensee, or appointee any one or more of

10  the following applicable grounds exist:

11         (1)  Lack of one or more of the qualifications for the

12  license or appointment as specified in this code.

13         (2)  Material misstatement, misrepresentation, or fraud

14  in obtaining the license or appointment or in attempting to

15  obtain the license or appointment.

16         (3)  Failure to pass to the satisfaction of the

17  department or office any examination required under this code.

18         (4)  If the license or appointment is willfully used,

19  or to be used, to circumvent any of the requirements or

20  prohibitions of this code.

21         (5)  Willful misrepresentation of any insurance policy

22  or annuity contract or willful deception with regard to any

23  such policy or contract, done either in person or by any form

24  of dissemination of information or advertising.

25         (6)  If, as an adjuster, or agent licensed and

26  appointed to adjust claims under this code, he or she has

27  materially misrepresented to an insured or other interested

28  party the terms and coverage of an insurance contract with

29  intent and for the purpose of effecting settlement of claim

30  for loss or damage or benefit under such contract on less

31  

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 1  favorable terms than those provided in and contemplated by the

 2  contract.

 3         (7)  Demonstrated lack of fitness or trustworthiness to

 4  engage in the business of insurance.

 5         (8)  Demonstrated lack of reasonably adequate knowledge

 6  and technical competence to engage in the transactions

 7  authorized by the license or appointment.

 8         (9)  Fraudulent or dishonest practices in the conduct

 9  of business under the license or appointment.

10         (10)  Misappropriation, conversion, or unlawful

11  withholding of moneys belonging to insurers or insureds or

12  beneficiaries or to others and received in conduct of business

13  under the license or appointment.

14         (11)  Unlawfully rebating, attempting to unlawfully

15  rebate, or unlawfully dividing or offering to divide his or

16  her commission with another.

17         (12)  Having obtained or attempted to obtain, or having

18  used or using, a license or appointment as agent or customer

19  representative for the purpose of soliciting or handling

20  "controlled business" as defined in s. 626.730 with respect to

21  general lines agents, s. 626.784 with respect to life agents,

22  and s. 626.830 with respect to health agents.

23         (13)  Willful failure to comply with, or willful

24  violation of, any proper order or rule of the department,

25  commission, or office or willful violation of any provision of

26  this code.

27         (14)  Having been found guilty of or having pleaded

28  guilty or nolo contendere to a felony or a crime punishable by

29  imprisonment of 1 year or more under the law of the United

30  States of America or of any state thereof or under the law of

31  any other country which involves moral turpitude, without

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 1  regard to whether a judgment of conviction has been entered by

 2  the court having jurisdiction of such cases.

 3         (15)  Fraudulent or dishonest practice in submitting or

 4  aiding or abetting any person in the submission of an

 5  application for workers' compensation coverage under chapter

 6  440 containing false or misleading information as to employee

 7  payroll or classification for the purpose of avoiding or

 8  reducing the amount of premium due for such coverage.

 9         (16)  Sale of an unregistered security that was

10  required to be registered, pursuant to chapter 517.

11         Section 947.  Section 626.621, Florida Statutes, is

12  amended to read:

13         626.621  Grounds for discretionary refusal, suspension,

14  or revocation of agent's, adjuster's, customer

15  representative's, service representative's, or managing

16  general agent's license or appointment.--The department or

17  office may, in its discretion, deny an application for,

18  suspend, revoke, or refuse to renew or continue the license or

19  appointment of any applicant, agent, adjuster, customer

20  representative, service representative, or managing general

21  agent, and it may suspend or revoke the eligibility to hold a

22  license or appointment of any such person, if it finds that as

23  to the applicant, licensee, or appointee any one or more of

24  the following applicable grounds exist under circumstances for

25  which such denial, suspension, revocation, or refusal is not

26  mandatory under s. 626.611:

27         (1)  Any cause for which issuance of the license or

28  appointment could have been refused had it then existed and

29  been known to the department or office.

30  

31  

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 1         (2)  Violation of any provision of this code or of any

 2  other law applicable to the business of insurance in the

 3  course of dealing under the license or appointment.

 4         (3)  Violation of any lawful order or rule of the

 5  department, commission, or office.

 6         (4)  Failure or refusal, upon demand, to pay over to

 7  any insurer he or she represents or has represented any money

 8  coming into his or her hands belonging to the insurer.

 9         (5)  Violation of the provision against twisting, as

10  defined in s. 626.9541(1)(l).

11         (6)  In the conduct of business under the license or

12  appointment, engaging in unfair methods of competition or in

13  unfair or deceptive acts or practices, as prohibited under

14  part IX of this chapter, or having otherwise shown himself or

15  herself to be a source of injury or loss to the public or

16  detrimental to the public interest.

17         (7)  Willful overinsurance of any property or health

18  insurance risk.

19         (8)  Having been found guilty of or having pleaded

20  guilty or nolo contendere to a felony or a crime punishable by

21  imprisonment of 1 year or more under the law of the United

22  States of America or of any state thereof or under the law of

23  any other country, without regard to whether a judgment of

24  conviction has been entered by the court having jurisdiction

25  of such cases.

26         (9)  If a life agent, violation of the code of ethics.

27         (10)  Cheating on an examination required for licensure

28  or violating test center or examination procedures published

29  orally, in writing, or electronically at the test site by

30  authorized representatives of the examination program

31  

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 1  administrator.  Communication of test center and examination

 2  procedures must be clearly established and documented.

 3         (11)  Failure to inform the department or office in

 4  writing within 30 days after pleading guilty or nolo

 5  contendere to, or being convicted or found guilty of, any

 6  felony or a crime punishable by imprisonment of 1 year or more

 7  under the law of the United States or of any state thereof, or

 8  under the law of any other country without regard to whether a

 9  judgment of conviction has been entered by the court having

10  jurisdiction of the case.

11         (12)  Knowingly aiding, assisting, procuring, advising,

12  or abetting any person in the violation of or to violate a

13  provision of the insurance code or any order or rule of the

14  department, commission, or office.

15         Section 948.  Section 626.631, Florida Statutes, is

16  amended to read:

17         626.631  Procedure for refusal, suspension, or

18  revocation of license.--

19         (1)  If any licensee is convicted by a court of a

20  violation of this code or a felony, the licenses and

21  appointments of such person shall be immediately revoked by

22  the department or office.  The licensee may subsequently

23  request a hearing pursuant to ss. 120.569 and 120.57, and the

24  department or office shall expedite any such requested

25  hearing.  The sole issue at such hearing shall be whether the

26  revocation should be rescinded because such person was not in

27  fact convicted of a violation of this code or a felony.

28         (2)  The papers, documents, reports, or evidence of the

29  department or office relative to a hearing for revocation or

30  suspension of a license or appointment pursuant to the

31  provisions of this chapter and chapter 120 are confidential

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 1  and exempt from the provisions of s. 119.07(1) until after the

 2  same have been published at the hearing. However, such papers,

 3  documents, reports, or items of evidence are subject to

 4  discovery in a hearing for revocation or suspension of a

 5  license or appointment.

 6         Section 949.  Subsections (1) and (2) of section

 7  626.641, Florida Statutes, are amended to read:

 8         626.641  Duration of suspension or revocation.--

 9         (1)  The department or office shall, in its order

10  suspending a license or appointment or in its order suspending

11  the eligibility of a person to hold or apply for such license

12  or appointment, specify the period during which the suspension

13  is to be in effect; but such period shall not exceed 2 years.

14  The license, appointment, or eligibility shall remain

15  suspended during the period so specified, subject, however, to

16  any rescission or modification of the order by the department

17  or office, or modification or reversal thereof by the court,

18  prior to expiration of the suspension period. A license,

19  appointment, or eligibility which has been suspended shall not

20  be reinstated except upon request for such reinstatement; but

21  the department or office shall not grant such reinstatement if

22  it finds that the circumstance or circumstances for which the

23  license, appointment, or eligibility was suspended still exist

24  or are likely to recur.

25         (2)  No person or appointee under any license or

26  appointment revoked by the department or office, nor any

27  person whose eligibility to hold same has been revoked by the

28  department or office, shall have the right to apply for

29  another license or appointment under this code within 2 years

30  from the effective date of such revocation or, if judicial

31  review of such revocation is sought, within 2 years from the

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 1  date of final court order or decree affirming the revocation.

 2  The department or office shall not, however, grant a new

 3  license or appointment or reinstate eligibility to hold such

 4  license or appointment if it finds that the circumstance or

 5  circumstances for which the eligibility was revoked or for

 6  which the previous license or appointment was revoked still

 7  exist or are likely to recur; if an individual's license as

 8  agent or customer representative or eligibility to hold same

 9  has been revoked upon the ground specified in s. 626.611(12),

10  the department or office shall refuse to grant or issue any

11  new license or appointment so applied for.

12         Section 950.  Subsection (2) of section 626.661,

13  Florida Statutes, is amended to read:

14         626.661  Surrender of license.--

15         (2)  This section shall not be deemed to require the

16  surrender to the department or office of any license unless

17  such surrender has been requested by the department or office.

18         Section 951.  Section 626.681, Florida Statutes, is

19  amended to read:

20         626.681  Administrative fine in lieu of or in addition

21  to suspension, revocation, or refusal of license, appointment,

22  or disapproval.--

23         (1)  Except as to insurance agencies, if the department

24  or office finds that one or more grounds exist for the

25  suspension, revocation, or refusal to issue, renew, or

26  continue any license or appointment issued under this chapter,

27  or disapproval of a continuing education course provider,

28  instructor, school official, or monitor groups, the department

29  or office may, in its discretion, in lieu of or in addition to

30  such suspension or revocation, or in lieu of such refusal, or

31  disapproval, and except on a second offense or when such

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 1  suspension, revocation, or refusal is mandatory, impose upon

 2  the licensee, appointee, course provider, instructor, school

 3  official, or monitor group an administrative penalty in an

 4  amount up to $500 or, if the department or office has found

 5  willful misconduct or willful violation on the part of the

 6  licensee, appointee, course provider, instructor, school

 7  official, or monitor group up to $3,500. The administrative

 8  penalty may, in the discretion of the department or office, be

 9  augmented by an amount equal to any commissions received by or

10  accruing to the credit of the licensee or appointee in

11  connection with any transaction as to which the grounds for

12  suspension, revocation, or refusal related.

13         (2)  With respect to insurance agencies, if the

14  department finds that one or more grounds exist for the

15  suspension, revocation, or refusal to issue, renew, or

16  continue any license issued under this chapter, the department

17  may, in its discretion, in lieu of or in addition to such

18  suspension or revocation, or in lieu of such refusal, impose

19  upon the licensee an administrative penalty in an amount not

20  to exceed $10,000 per violation. The administrative penalty

21  may, in the discretion of the department, be augmented by an

22  amount equal to any commissions received by or accruing to the

23  credit of the licensee in connection with any transaction as

24  to which the grounds for suspension, revocation, or refusal

25  related.

26         (3)  The department or office may allow the licensee,

27  appointee, or continuing education course provider,

28  instructor, school official, or monitor group a reasonable

29  period, not to exceed 30 days, within which to pay to the

30  department or office the amount of the penalty so imposed. If

31  the licensee, appointee, course provider, instructor, school

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 1  official, or monitor group fails to pay the penalty in its

 2  entirety to the department or office within the period so

 3  allowed, the license, appointments, approval, or status of

 4  that person shall stand suspended or revoked or issuance,

 5  renewal, or continuation shall be refused, as the case may be,

 6  upon expiration of such period.

 7         Section 952.  Section 626.691, Florida Statutes, is

 8  amended to read:

 9         626.691  Probation.--

10         (1)  If the department or office finds that one or more

11  grounds exist for the suspension, revocation, or refusal to

12  renew or continue any license or appointment issued under this

13  part, the department or office may, in its discretion, except

14  when an administrative fine is not permissible under s.

15  626.681 or when such suspension, revocation, or refusal is

16  mandatory, in lieu of or in addition to such suspension or

17  revocation, or in lieu of such refusal, or in connection with

18  any administrative monetary penalty imposed under s. 626.681,

19  place the offending licensee or appointee on probation for a

20  period, not to exceed 2 years, as specified by the department

21  or office in its order.

22         (2)  As a condition to such probation or in connection

23  therewith, the department or office may specify in its order

24  reasonable terms and conditions to be fulfilled by the

25  probationer during the probation period.  If during the

26  probation period the department or office has good cause to

27  believe that the probationer has violated a term or condition,

28  it shall suspend, revoke, or refuse to issue, renew, or

29  continue the license or appointment of the probationer, as

30  upon the original grounds referred to in subsection (1).

31  

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 1         Section 953.  Section 626.692, Florida Statutes, is

 2  amended to read:

 3         626.692  Restitution.--If any ground exists for the

 4  suspension, revocation, or refusal of a license or

 5  appointment, the department or office may, in addition to any

 6  other penalty authorized under this chapter, order the

 7  licensee to pay restitution to any person who has been

 8  deprived of money by the licensee's misappropriation,

 9  conversion, or unlawful withholding of moneys belonging to

10  insurers, insureds, beneficiaries, or others.  In no instance

11  shall the amount of restitution required to be paid under this

12  section exceed the amount of money misappropriated, converted,

13  or unlawfully withheld. Nothing in this section limits or

14  restricts a person's right to seek other remedies as provided

15  for by law.

16         Section 954.  Section 626.7315, Florida Statutes, is

17  amended to read:

18         626.7315  Prohibition against the unlicensed

19  transaction of general lines insurance.--With respect to any

20  line of authority as defined in s. 626.015(6) s. 626.015(7),

21  no individual shall, unless licensed as a general lines agent:

22         (1)  Solicit insurance or procure applications

23  therefor;

24         (2)  In this state, receive or issue a receipt for any

25  money on account of or for any insurer, or receive or issue a

26  receipt for money from other persons to be transmitted to any

27  insurer for a policy, contract, or certificate of insurance or

28  any renewal thereof, even though the policy, certificate, or

29  contract is not signed by him or her as agent or

30  representative of the insurer;

31  

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 1         (3)  Directly or indirectly represent himself or

 2  herself to be an agent of any insurer or as an agent, to

 3  collect or forward any insurance premium, or to solicit,

 4  negotiate, effect, procure, receive, deliver, or forward,

 5  directly or indirectly, any insurance contract or renewal

 6  thereof or any endorsement relating to an insurance contract,

 7  or attempt to effect the same, of property or insurable

 8  business activities or interests, located in this state;

 9         (4)  In this state, engage or hold himself or herself

10  out as engaging in the business of analyzing or abstracting

11  insurance policies or of counseling or advising or giving

12  opinions, other than as a licensed attorney at law, relative

13  to insurance or insurance contracts, for fee, commission, or

14  other compensation, other than as a salaried bona fide

15  full-time employee so counseling and advising his or her

16  employer relative to the insurance interests of the employer

17  and of the subsidiaries or business affiliates of the

18  employer;

19         (5)  In any way, directly or indirectly, make or cause

20  to be made, or attempt to make or cause to be made, any

21  contract of insurance for or on account of any insurer;

22         (6)  Solicit, negotiate, or in any way, directly or

23  indirectly, effect insurance contracts, if a member of a

24  partnership or association, or a stockholder, officer, or

25  agent of a corporation which holds an agency appointment from

26  any insurer; or

27         (7)  Receive or transmit applications for suretyship,

28  or receive for delivery bonds founded on applications

29  forwarded from this state, or otherwise procure suretyship to

30  be effected by a surety insurer upon the bonds of persons in

31  this state or upon bonds given to persons in this state.

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 1         Section 955.  Subsection (3) of section 626.732,

 2  Florida Statutes, is amended to read:

 3         626.732  Requirement as to knowledge, experience, or

 4  instruction.--

 5         (3)  An individual who was or became qualified to sit

 6  for an agent's, customer representative's, or adjuster's

 7  examination at or during the time he or she was employed by

 8  the department or office and who, while so employed, was

 9  employed in responsible insurance duties as a full-time bona

10  fide employee shall be permitted to take an examination if

11  application for such examination is made within 90 days after

12  the date of termination of his or her employment with the

13  department or office.

14         Section 956.  Section 626.742, Florida Statutes, is

15  amended to read:

16         626.742  Nonresident agents; service of process.--

17         (1)  Each licensed nonresident agent shall appoint the

18  Chief Financial Officer Insurance Commissioner and Treasurer

19  as his or her attorney to receive service of legal process

20  issued against the agent in this state, upon causes of action

21  arising within this state out of transactions under the

22  agent's license and appointment. Service upon the Chief

23  Financial Officer Insurance Commissioner and Treasurer as

24  attorney shall constitute effective legal service upon the

25  agent.

26         (2)  The appointment of the Chief Financial Officer

27  Insurance Commissioner and Treasurer for service of process

28  shall be irrevocable for as long as there could be any cause

29  of action against the agent arising out of his or her

30  insurance transactions in this state.

31  

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 1         (3)  Duplicate copies of such legal process against

 2  such agent shall be served upon the Chief Financial Officer

 3  Insurance Commissioner and Treasurer by a person competent to

 4  serve a summons.

 5         (4)  Upon receiving such service, the Chief Financial

 6  Officer Insurance Commissioner and Treasurer shall forthwith

 7  send one of the copies of the process, by registered mail with

 8  return receipt requested, to the defendant agent at his or her

 9  last address of record with the department.

10         (5)  The Chief Financial Officer Insurance Commissioner

11  and Treasurer shall keep a record of the day and hour of

12  service upon him or her of all such legal process.

13         Section 957.  Subsections (4) and (7) of section

14  626.7451, Florida Statutes, are amended to read:

15         626.7451  Managing general agents; required contract

16  provisions.--No person acting in the capacity of a managing

17  general agent shall place business with an insurer unless

18  there is in force a written contract between the parties which

19  sets forth the responsibility for a particular function,

20  specifies the division of responsibilities, and contains the

21  following minimum provisions:

22         (4)  Separate records of business written by the

23  managing general agent shall be maintained unless the managing

24  general agent is a controlled or controlling person. The

25  insurer shall have access and the right to copy all accounts

26  and records related to its business in a form usable by the

27  insurer, and the department and office shall have access to

28  all books, bank accounts, and records of the managing general

29  agent in a form usable to the department and office. The

30  records shall be retained according to s. 626.561.

31  

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 1         (7)  If the contract permits the managing general agent

 2  to settle claims on behalf of the insurer:

 3         (a)  All claims must be reported to the company in a

 4  timely manner and all claims must be adjusted by properly

 5  licensed persons.

 6         (b)  Notice shall be sent by the managing general agent

 7  to the insurer as soon as it becomes known that the claim:

 8         1.  Exceeds the limit set by the insurer;

 9         2.  Involves a coverage dispute;

10         3.  Exceeds the managing general agent's claims

11  settlement authority;

12         4.  Is open for more than 6 months; or

13         5.  Is closed by payment of an amount set by the office

14  department or an amount set by the insurer, whichever is less.

15         (c)  All claims files shall be the joint property of

16  the insurer and managing general agent.  However, upon an

17  order of liquidation of the insurer the claims and related

18  application files shall become the sole property of the

19  insurer or its estate.  The managing general agent shall have

20  reasonable access to and the right to copy the files on a

21  timely basis.

22         (d)  Any settlement authority granted to the managing

23  general agent may be terminated for cause upon the insurer's

24  written notice to the managing general agent or upon the

25  termination of the contract.  The insurer may suspend the

26  settlement authority during the pendency of any dispute

27  regarding the cause for termination.

28  

29  For the purposes of this section and ss. 626.7453 and

30  626.7454, the term "controlling person" or "controlling" has

31  the meaning set forth in s. 625.012(5)(b)1., and the term

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 1  "controlled person" or "controlled" has the meaning set forth

 2  in s. 625.012(5)(b)2.

 3         Section 958.  Subsections (1), (5), and (6) of section

 4  626.7454, Florida Statutes, are amended to read:

 5         626.7454  Managing general agents; duties of

 6  insurers.--

 7         (1)  The insurer shall have on file for each managing

 8  general agent with which it has done business an independent

 9  financial examination in a form acceptable to the office

10  department.

11         (5)  Within 30 days after entering into or terminating

12  a contract with a managing general agent, the insurer shall

13  provide written notification of the appointment or termination

14  to the department and office. Notices of appointment of a

15  managing general agent shall include a statement of duties

16  which the applicant is expected to perform on behalf of the

17  insurer, the lines of insurance for which the applicant is to

18  be authorized to act, and any other information the department

19  or office may request.

20         (6)  An insurer shall review its books and records on a

21  quarterly basis to determine if any producer has become a

22  managing general agent as defined in s. 626.015. If the

23  insurer determines that a producer has become a managing

24  general agent, the insurer shall promptly notify the producer

25  and the department and office of such determination and the

26  insurer and producer must fully comply with the provisions of

27  this section and ss. 626.7451, 626.7452, and 626.7453 within

28  30 days after such determination.

29  

30  Subsections (1), (3), and (4) do not apply to a managing

31  general agent that is a controlled or controlling person.

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 1         Section 959.  Subsections (6), (7), and (8) of section

 2  626.7491, Florida Statutes, are amended to read:

 3         626.7491  Business transacted with producer controlled

 4  property and casualty insurer.--

 5         (6)  AUDIT COMMITTEE.--Every controlled insurer shall

 6  have an audit committee of the board of directors composed of

 7  independent directors. The audit committee shall annually meet

 8  with management, the insurer's independent certified public

 9  accountants, and an independent casualty actuary or other

10  independent loss reserve specialist acceptable to the office

11  department to review the adequacy of the insurer's loss

12  reserves.

13         (7)  REPORTING REQUIREMENTS.--

14         (a)  In addition to any other required loss reserve

15  certification, the controlled insurer shall, on April 1 of

16  each year, file with the office department the opinion of an

17  independent casualty actuary, or such other independent loss

18  reserve specialist acceptable to the office department,

19  reporting loss ratios for each line of business written and

20  attesting to the adequacy of loss reserves established for

21  losses incurred and outstanding as of the year end, including

22  incurred but not reported losses, on business placed by the

23  producer.

24         (b)  The controlled insurer shall annually report to

25  the office department the amount of commissions paid to the

26  producer, the percentage such amount represents of the net

27  premiums written, and comparable amounts and percentages paid

28  to noncontrolling producers for placements of the same kinds

29  of insurance.

30         (8)  PENALTIES.--

31  

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 1         (a)  If the department believes that the controlling

 2  producer or any other person has not materially complied with

 3  this section, or any rule adopted or order issued hereunder,

 4  the department may order the controlling producer to cease

 5  placing business with the controlled insurer.

 6         (b)  If, due to such material noncompliance, the

 7  controlled insurer or any policyholder thereof has suffered

 8  any loss or damage, the department or office may maintain a

 9  civil action or intervene in an action brought by or on behalf

10  of the insurer or policyholder for recovery of compensatory

11  damages for the benefit of the insurer or policyholder or

12  other appropriate relief.

13         (c)  If an order for liquidation or rehabilitation of

14  the controlled insurer has been entered pursuant to chapter

15  631 and the receiver appointed under such order believes that

16  the controlling producer or any other person has not

17  materially complied with this section or any rule adopted or

18  order issued hereunder and the insurer has suffered any loss

19  or damage therefrom, the receiver may maintain a civil action

20  for recovery of damages or other appropriate sanctions for the

21  benefit of the insurer.

22         (d)  Nothing contained in this section shall affect the

23  right of the department or office to impose any other

24  penalties provided for in the Florida Insurance Code.

25         (e)  Nothing contained in this section is intended to

26  or shall in any manner alter or affect the rights of

27  policyholders, claimants, creditors, or other third parties.

28         Section 960.  Paragraph (e) of subsection (3) and

29  subsections (11) and (12) of section 626.7492, Florida

30  Statutes, are amended to read:

31         626.7492  Reinsurance intermediaries.--

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 1         (3)  LICENSURE.--

 2         (e)  If the applicant for a reinsurance intermediary

 3  license is a nonresident, the applicant, as a condition

 4  precedent to receiving or holding a license, must designate

 5  the Chief Financial Officer Insurance Commissioner as agent

 6  for service of process in the manner, and with the same legal

 7  effect, provided for by this section for designation of

 8  service of process upon unauthorized insurers. Such applicant

 9  shall also furnish the department with the name and address of

10  a resident of this state upon whom notices or orders of the

11  department or process affecting the nonresident reinsurance

12  intermediary may be served. The licensee shall promptly notify

13  the department in writing of each change in its designated

14  agent for service of process, and the change shall not become

15  effective until acknowledged by the department.

16         (11)  PENALTIES AND LIABILITIES.--

17         (a)  A reinsurance intermediary found by the

18  department, or an insurer, or reinsurer found by the office,

19  department to be in violation of any provision of this section

20  must:

21         1.  For each separate violation pay a penalty in an

22  amount not to exceed $5,000;

23         2.  Be subject to revocation or suspension of its

24  license; and

25         3.  If a violation was committed by the reinsurance

26  intermediary, the reinsurance intermediary must make

27  restitution to the insurer, reinsurer, rehabilitator, or

28  liquidator of the insurer or reinsurer for the net losses

29  incurred by the insurer or reinsurer attributable to the

30  violation.

31  

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 1         (b)  Nothing contained in this section shall affect the

 2  right of the office or department to impose any other

 3  penalties provided in the Florida Insurance Code.

 4         (c)  Nothing contained in this section is intended to

 5  or shall in any manner limit or restrict the rights of

 6  policyholders, claimants, creditors, or other third parties or

 7  confer any rights to these persons.

 8         (12)  No insurer or reinsurer may continue to use the

 9  services of a reinsurance intermediary on or after April 8,

10  1992, unless such use is in compliance with this section.

11         Section 961.  Subsection (5) of section 626.752,

12  Florida Statutes, is amended to read:

13         626.752  Exchange of business.--

14         (5)  Within 15 days after the last day of each month,

15  any insurer accepting business under this section shall report

16  to the department the name, address, telephone number, and

17  social security number of each agent from which the insurer

18  received more than 24 personal lines risks during the calendar

19  year, except for risks being removed from the Citizens

20  Property Insurance Corporation Residential Property and

21  Casualty Joint Underwriting Association and placed with that

22  insurer by a brokering agent.  Once the insurer has reported

23  pursuant to this subsection an agent's name to the department,

24  additional reports on the same agent shall not be required.

25  However, the fee set forth in s. 624.501 shall be paid for the

26  agent by the insurer for each year until the insurer notifies

27  the department that the insurer is no longer accepting

28  business from the agent pursuant to this section.  The insurer

29  may require that the agent reimburse the insurer for the fee.

30         Section 962.  Subsection (2) of section 626.7845,

31  Florida Statutes, is amended to read:

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 1         626.7845  Prohibition against unlicensed transaction of

 2  life insurance.--

 3         (2)  Except as provided in s. 626.112(6), with respect

 4  to any line of authority specified in s. 626.015(11) s.

 5  626.015(12), no individual shall, unless licensed as a life

 6  agent:

 7         (a)  Solicit insurance or annuities or procure

 8  applications; or

 9         (b)  In this state, engage or hold himself or herself

10  out as engaging in the business of analyzing or abstracting

11  insurance policies or of counseling or advising or giving

12  opinions to persons relative to insurance or insurance

13  contracts other than:

14         1.  As a consulting actuary advising an insurer; or

15         2.  As to the counseling and advising of labor unions,

16  associations, trustees, employers, or other business entities,

17  the subsidiaries and affiliates of each, relative to their

18  interests and those of their members or employees under

19  insurance benefit plans.

20         Section 963.  Section 626.7851, Florida Statutes, is

21  amended to read:

22         626.7851  Requirement as to knowledge, experience, or

23  instruction.--No applicant for a license as a life agent,

24  except for a chartered life underwriter (CLU), shall be

25  qualified or licensed unless within the 4 years immediately

26  preceding the date the application for a license is filed with

27  the department he or she has:

28         (1)  Successfully completed 40 hours of classroom

29  courses in insurance satisfactory to the department at a

30  school or college, or extension division thereof, or other

31  authorized course of study, approved by the department.

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 1  Courses must include instruction on the subject matter of

 2  unauthorized entities engaging in the business of insurance,

 3  to include the Florida Nonprofit Multiple-Employer Welfare

 4  Arrangement Act and the Employee Retirement Income Security

 5  Act, 29 U.S.C. ss. 1001 et seq., as it relates to the

 6  provision of life insurance by employers to their employees

 7  and the regulation thereof;

 8         (2)  Successfully completed a correspondence course in

 9  insurance satisfactory to the department and regularly offered

10  by accredited institutions of higher learning in this state,

11  approved by the department. Courses must include instruction

12  on the subject matter of unauthorized entities engaging in the

13  business of insurance, to include the Florida Nonprofit

14  Multiple-Employer Welfare Arrangement Act and the Employee

15  Retirement Income Security Act, 29 U.S.C. ss. 1001 et seq., as

16  it relates to the provision of life insurance by employers to

17  their employees and the regulation thereof;

18         (3)  Held an active license in life, or life and

19  health, insurance in another state.  This provision may not be

20  utilized unless the other state grants reciprocal treatment to

21  licensees formerly licensed in Florida; or

22         (4)  Been employed by the department or office for at

23  least 1 year, full time in life or life and health insurance

24  regulatory matters and who was not terminated for cause, and

25  application for examination is made within 90 days after the

26  date of termination of his or her employment with the

27  department or office.

28         Section 964.  Section 626.8305, Florida Statutes, is

29  amended to read:

30         626.8305  Prohibition against the unlicensed

31  transaction of health insurance.--Except as provided in s.

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 1  626.112(6), with respect to any line of authority specified in

 2  s. 626.015(7) s. 626.015(8), no individual shall, unless

 3  licensed as a health agent:

 4         (1)  Solicit insurance or procure applications; or

 5         (2)  In this state, engage or hold himself or herself

 6  out as engaging in the business of analyzing or abstracting

 7  insurance policies or of counseling or advising or giving

 8  opinions to persons relative to insurance contracts other

 9  than:

10         (a)  As a consulting actuary advising insurers; or

11         (b)  As to the counseling and advising of labor unions,

12  associations, trustees, employers, or other business entities,

13  the subsidiaries and affiliates of each, relative to their

14  interests and those of their members or employees under

15  insurance benefit plans.

16         Section 965.  Section 626.8311, Florida Statutes, is

17  amended to read:

18         626.8311  Requirement as to knowledge, experience, or

19  instruction.--No applicant for a license as a health agent,

20  except for a chartered life underwriter (CLU), shall be

21  qualified or licensed unless within the 4 years immediately

22  preceding the date the application for license is filed with

23  the department he or she has:

24         (1)  Successfully completed 40 hours of classroom

25  courses in insurance satisfactory to the department at a

26  school or college, or extension division thereof, or other

27  authorized course of study, approved by the department.

28  Courses must include instruction on the subject matter of

29  unauthorized entities engaging in the business of insurance,

30  to include the Florida Nonprofit Multiple-Employer Welfare

31  Arrangement Act and the Employee Retirement Income Security

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 1  Act, 29 U.S.C. ss. 1001 et seq., as it relates to the

 2  provision of health insurance by employers to their employees

 3  and the regulation thereof;

 4         (2)  Successfully completed a correspondence course in

 5  insurance satisfactory to the department and regularly offered

 6  by accredited institutions of higher learning in this state,

 7  approved by the department. Courses must include instruction

 8  on the subject matter of unauthorized entities engaging in the

 9  business of insurance, to include the Florida Nonprofit

10  Multiple-Employer Welfare Arrangement Act and the Employee

11  Retirement Income Security Act, 29 U.S.C. ss. 1001 et seq., as

12  it relates to the provision of health insurance by employers

13  to their employees and the regulation thereof;

14         (3)  Held an active license in health, or life and

15  health, insurance in another state.  This provision may not be

16  utilized unless the other state grants reciprocal treatment to

17  licensees formerly licensed in Florida; or

18         (4)  Been employed by the department or office for at

19  least 1 year, full time in health insurance regulatory matters

20  and who was not terminated for cause, and application for

21  examination is made within 90 days after the date of

22  termination of his or her employment with the department or

23  office.

24         Section 966.  Subsection (1) of section 626.8427,

25  Florida Statutes, is amended to read:

26         626.8427  Number of applications for licensure

27  required; exemption; effect of expiration of license.--

28         (1)  After a license as a title insurance agent has

29  been issued to a title insurance agent, the agent is not

30  required to file another license application for a similar

31  

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 1  license, irrespective of the number of insurers to be

 2  represented by the agent, unless:

 3         (a)  The agent is specifically ordered by the

 4  department to complete a new application; or

 5         (b)  During any period of 48 months since the filing of

 6  the original license application, the agent was not appointed,

 7  unless in the case of individuals the failure to be so

 8  appointed was due to military service, in which event the

 9  period within which a new application is not required may, in

10  the discretion of the department of Insurance, be extended for

11  12 months following the date of discharge from military

12  service if the military service does not exceed 3 years, but

13  in no event shall the period be extended under this clause for

14  a period of more than 6 years from the date of filing the

15  original application.

16         Section 967.  Subsections (1) and (3) of section

17  626.8463, Florida Statutes, are amended to read:

18         626.8463  Witnesses and evidence.--

19         (1)  As to the subject of any examination,

20  investigation, or hearing being conducted by him or her under

21  s. 624.5015, ss. 626.8417-626.847, or s. 627.791, an examiner

22  appointed by the department or office of Insurance may

23  administer oaths, examine and cross-examine witnesses, and

24  receive oral and documentary evidence and shall have the power

25  to subpoena witnesses, compel their attendance and testimony,

26  and require by subpoena the production of books, papers,

27  records, files, correspondence, documents, or other evidence

28  which the examiner deems relevant to the inquiry.

29         (3)  If a person refuses to comply with any such

30  subpoena or to testify as to any matter concerning which the

31  person may be lawfully interrogated, the circuit court in and

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 1  for Leon County, or the county in which such examination,

 2  investigation, or hearing is being conducted, or the county in

 3  which such person resides, upon application by the department

 4  or office, may issue an order requiring such person to comply

 5  with the subpoena and to testify. A person who fails to obey

 6  such an order of the court may be punished by the court for

 7  contempt.

 8         Section 968.  Section 626.8467, Florida Statutes, is

 9  amended to read:

10         626.8467  Testimony compelled; immunity from

11  prosecution.--

12         (1)  If a person asks to be excused from attending or

13  testifying or from producing any books, papers, records,

14  contracts, documents, or other evidence in connection with any

15  examination, hearing, or investigation being conducted under

16  s. 624.5015, ss. 626.8417-626.847, or s. 627.791 by the

17  department or office or its examiner on the ground that the

18  testimony or evidence required of the person may tend to

19  incriminate him or her or subject him or her to a penalty or

20  forfeiture and notwithstanding is directed to give such

21  testimony or produce such evidence, the person must, if so

22  directed by the Department of Financial Services Insurance and

23  the Department of Legal Affairs or by the office and the

24  Department of Legal Affairs, nonetheless comply with such

25  direction, but he or she shall not thereafter be prosecuted or

26  subjected to any penalty or forfeiture for or on account of

27  any transaction, matter, or thing concerning which he or she

28  may have so testified or produced evidence, and no testimony

29  so given or evidence produced shall be received against the

30  person upon any criminal action, investigation, or proceeding.

31  However, a person so testifying shall not be exempt from

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 1  prosecution or punishment for any perjury committed by him or

 2  her in such testimony, and the testimony or evidence so given

 3  or produced shall be admissible against him or her upon any

 4  criminal action, investigation, or proceeding concerning such

 5  perjury; and such person shall not be exempt from the refusal,

 6  suspension, or revocation of any license or appointment,

 7  permission, or authority conferred or to be conferred pursuant

 8  to s. 624.5015, ss. 626.8417-626.847, or s. 627.791.

 9         (2)  Any such person may execute, acknowledge, and file

10  with in the office of the Department of Financial Services or

11  the office, as appropriate, Insurance a statement expressly

12  waiving such immunity or privilege with respect to any

13  transaction, matter, or thing specified in the statement, and

14  thereupon the testimony of such person or such evidence in

15  relation to such transaction, matter, or thing may be received

16  or produced before any judge or justice, court, tribunal, or

17  grand jury or otherwise and, if so received or produced, such

18  person shall not be entitled to any immunity or privilege on

19  account of any testimony he or she may so give or evidence so

20  produced.

21         Section 969.  Section 626.847, Florida Statutes, is

22  amended to read:

23         626.847  Penalty for refusal to testify.--A person who

24  refuses or fails, without lawful cause, to testify relative to

25  the affairs of any title insurer or other person when

26  subpoenaed under s. 626.8463 and requested by the department

27  or office of Insurance to so testify is guilty of a

28  misdemeanor of the second degree and, upon conviction, is

29  punishable as provided in s. 775.082 or s. 775.083.

30         Section 970.  Subsection (3) of section 626.8473,

31  Florida Statutes, is amended to read:

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 1         626.8473  Escrow; trust fund.--

 2         (3)  All funds received by a title insurance agent to

 3  be held in trust shall be immediately placed in a financial

 4  institution that is located within this state and is a member

 5  of the Federal Deposit Insurance Corporation or the National

 6  Credit Union Share Insurance Fund. These funds shall be

 7  invested in an escrow account in accordance with the

 8  investment requirements and standards established for deposits

 9  and investments of state funds in s. 17.57 s. 18.10, where the

10  funds shall be kept until disbursement thereof is properly

11  authorized.

12         Section 971.  Section 626.8582, Florida Statutes, is

13  amended to read:

14         626.8582  "Nonresident public adjuster" defined.--A

15  "nonresident public adjuster" is a person who:

16         (1)  Is not a resident of this state;

17         (2)  Is a currently licensed public adjuster in his or

18  her state of residence for the type or kinds of insurance for

19  which the licensee intends to adjust claims in this state or,

20  if a resident of a state that does not license public

21  adjusters, has passed the office's department's adjuster

22  examination as prescribed in s. 626.8732(1)(b); and

23         (3)  Is a self-employed public adjuster or associated

24  with or employed by a public adjusting firm or other public

25  adjuster.

26         Section 972.  Section 626.8584, Florida Statutes, is

27  amended to read:

28         626.8584  "Nonresident independent adjuster"

29  defined.--A "nonresident independent adjuster" is a person

30  who:

31         (1)  Is not a resident of this state;

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 1         (2)  Is a currently licensed independent adjuster in

 2  his or her state of residence for the type or kinds of

 3  insurance for which the licensee intends to adjust claims in

 4  this state or, if a resident of a state that does not license

 5  independent adjusters, has passed the office's department's

 6  adjuster examination as prescribed in s. 626.8734(1)(b); and

 7         (3)  Is a self-employed independent adjuster or

 8  associated with or employed by an independent adjusting firm

 9  or other independent adjuster.

10         Section 973.  Section 626.859, Florida Statutes, is

11  amended to read:

12         626.859  "Catastrophe" or "emergency" adjuster

13  defined.--A "catastrophe" or "emergency" adjuster is a person

14  who is not a licensed adjuster under this part, but who has

15  been designated and certified to the office department by

16  insurers as qualified to adjust claims, losses, or damages

17  under policies or contracts of insurance issued by such

18  insurer, and whom the office department may license, in the

19  event of a catastrophe or emergency, for the purposes and

20  under the conditions which the office department shall fix and

21  for the period of the emergency as the office department shall

22  determine, to adjust claims, losses, or damages under the

23  policies of insurance issued by the insurers.

24         Section 974.  Subsection (2) of section 626.861,

25  Florida Statutes, is amended to read:

26         626.861  Insurer's officers, insurer's employees,

27  reciprocal insurer's representatives; adjustments by.--

28         (2)  If any such officer, employee, attorney, or agent

29  in connection with the adjustment of any such claim, loss, or

30  damage engages in any of the misconduct described in or

31  

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 1  contemplated by s. 626.611(6), the office department may

 2  suspend or revoke the insurer's certificate of authority.

 3         Section 975.  Subsection (2) of section 626.863,

 4  Florida Statutes, is amended to read:

 5         626.863  Licensed independent adjusters required;

 6  insurers' responsibility.--

 7         (2)  Before referring any claim or loss, the insurer

 8  shall ascertain from the office department whether the

 9  proposed independent adjuster is currently licensed and

10  appointed as such. Having once ascertained that a particular

11  person is so licensed and appointed, the insurer may assume

12  that he or she will continue to be so licensed and appointed

13  until the insurer has knowledge, or receives information from

14  the office department, to the contrary.

15         Section 976.  Section 626.865, Florida Statutes, is

16  amended to read:

17         626.865  Public adjuster's qualifications, bond.--

18         (1)  The office department shall issue a license to an

19  applicant for a public adjuster's license upon determining

20  that the applicant has paid the applicable fees specified in

21  s. 624.501 and possesses the following qualifications:

22         (a)  Is a natural person at least 18 years of age.

23         (b)  Is a bona fide resident of this state.

24         (c)  Is trustworthy and has such business reputation as

25  would reasonably assure that the applicant will conduct his or

26  her business as insurance adjuster fairly and in good faith

27  and without detriment to the public.

28         (d)  Has had sufficient experience, training, or

29  instruction concerning the adjusting of damages or losses

30  under insurance contracts, other than life and annuity

31  contracts, is sufficiently informed as to the terms and

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 1  effects of the provisions of those types of insurance

 2  contracts, and possesses adequate knowledge of the laws of

 3  this state relating to such contracts as to enable and qualify

 4  him or her to engage in the business of insurance adjuster

 5  fairly and without injury to the public or any member thereof

 6  with whom the applicant may have business as a public

 7  adjuster.

 8         (e)  Has passed any required written examination.

 9         (2)  At the time of application for license as a public

10  adjuster, the applicant shall file with the office department

11  a bond executed and issued by a surety insurer authorized to

12  transact such business in this state, in the amount of

13  $50,000, conditioned for the faithful performance of his or

14  her duties as a public adjuster under the license applied for.

15  The bond shall be in favor of the office department and shall

16  specifically authorize recovery by the office department of

17  the damages sustained in case the licensee is guilty of fraud

18  or unfair practices in connection with his or her business as

19  public adjuster. The aggregate liability of the surety for all

20  such damages shall in no event exceed the amount of the bond.

21  Such bond shall not be terminated unless at least 30 days'

22  written notice is given to the licensee and filed with the

23  office department.

24         Section 977.  Section 626.866, Florida Statutes, is

25  amended to read:

26         626.866  Independent adjuster's qualifications.--The

27  office department shall issue a license to an applicant for an

28  independent adjuster's license upon determining that the

29  applicable license fee specified in s. 624.501 has been paid

30  and that the applicant possesses the following qualifications:

31         (1)  Is a natural person at least 18 years of age.

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 1         (2)  Is a bona fide resident of this state.

 2         (3)  Is trustworthy and has such business reputation as

 3  would reasonably assure that the applicant will conduct his or

 4  her business as insurance adjuster fairly and in good faith

 5  and without detriment to the public.

 6         (4)  Has had sufficient experience, training, or

 7  instruction concerning the adjusting of damage or loss under

 8  insurance contracts, other than life and annuity contracts, is

 9  sufficiently informed as to the terms and the effects of the

10  provisions of such types of contracts, and possesses adequate

11  knowledge of the insurance laws of this state relating to such

12  contracts as to enable and qualify him or her to engage in the

13  business of insurance adjuster fairly and without injury to

14  the public or any member thereof with whom he or she may have

15  relations as an insurance adjuster and to adjust all claims in

16  accordance with the policy or contract and the insurance laws

17  of this state.

18         (5)  Has passed any required written examination.

19         Section 978.  Section 626.867, Florida Statutes, is

20  amended to read:

21         626.867  Company employee adjuster's

22  qualifications.--The office department shall issue a license

23  to an applicant for a company employee adjuster's license upon

24  determining that the applicable license fee specified in s.

25  624.501 has been paid and that the applicant possesses the

26  following qualifications:

27         (1)  Is a natural person at least 18 years of age.

28         (2)  Is a bona fide resident of this state.

29         (3)  Is trustworthy and has such business reputation as

30  would reasonably assure that the applicant will conduct his or

31  

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 1  her business as insurance adjuster fairly and in good faith

 2  and without detriment to the public.

 3         (4)  Has had sufficient experience, training, or

 4  instruction concerning the adjusting of damage or loss of

 5  risks described in his or her application, is sufficiently

 6  informed as to the terms and the effects of the provisions of

 7  insurance contracts covering such risks, and possesses

 8  adequate knowledge of the insurance laws of this state

 9  relating to such insurance contracts as to enable and qualify

10  him or her to engage in such business as insurance adjuster

11  fairly and without injury to the public or any member thereof

12  with whom he or she may have relations as an insurance

13  adjuster and to adjust all claims in accordance with the

14  policy or contract and the insurance laws of this state.

15         (5)  Has passed any required written examination.

16         Section 979.  Subsection (5) of section 626.869,

17  Florida Statutes, is amended to read:

18         626.869  License, adjusters.--

19         (5)  Any person holding a license for 24 consecutive

20  months or longer and who engages in adjusting workers'

21  compensation insurance must, beginning in their birth month

22  and every 2 years thereafter, have completed 24 hours of

23  courses, 2 hours of which relate to ethics, in subjects

24  designed to inform the licensee regarding the current workers'

25  compensation laws of this state, so as to enable him or her to

26  engage in business as a workers' compensation insurance

27  adjuster fairly and without injury to the public and to adjust

28  all claims in accordance with the policy or contract and the

29  workers' compensation laws of this state.  In order to qualify

30  as an eligible course under this subsection, the course must:

31  

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 1         (a)  Have a course outline approved by the office

 2  department.

 3         (b)  Be taught at a school training facility or other

 4  location approved by the office department.

 5         (c)  Be taught by instructors with at least 5 years of

 6  experience in the area of workers' compensation, general lines

 7  of insurance, or other persons approved by the office

 8  department. However, a member of The Florida Bar is exempt

 9  from the 5 years' experience requirement.

10         (d)  Furnish the attendee a certificate of completion.

11  The course provider shall send a roster to the office

12  department in a format prescribed by the commission

13  department.

14         Section 980.  Section 626.8695, Florida Statutes, is

15  amended to read:

16         626.8695  Primary adjuster.--

17         (1)  Each person operating an adjusting firm and each

18  location of a multiple location adjusting firm must designate

19  a primary adjuster for each such firm or location and must

20  file with the office department the name of such primary

21  adjuster and the address of the firm or location where he or

22  she is the primary adjuster, on a form approved by the

23  commission department. The designation of the primary adjuster

24  may be changed at the option of the adjusting firm. Any such

25  change is effective upon notification to the office

26  department. Notice of change must be sent to the office

27  department within 30 days after such change.

28         (2)(a)  For purposes of this section, a "primary

29  adjuster" is the licensed adjuster who is responsible for the

30  hiring and supervision of all individuals within an adjusting

31  firm location who deal with the public and who acts in the

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 1  capacity of a public adjuster as defined in s. 626.854, or an

 2  independent adjuster as defined in s. 626.855.  An adjuster

 3  may be designated as a primary adjuster for only one adjusting

 4  firm location.

 5         (b)  For purposes of this section, an "adjusting firm"

 6  is a location where an independent or public adjuster is

 7  engaged in the business of insurance.

 8         (3)  The office department may suspend or revoke the

 9  license of the primary adjuster if the adjusting firm employs

10  any person who has had a license denied or any person whose

11  license is currently suspended or revoked. However, if a

12  person has been denied a license for failure to pass a

13  required examination, he or she may be employed to perform

14  clerical or administrative functions for which licensure is

15  not required.

16         (4)  The primary adjuster in an unincorporated

17  adjusting firm, or the primary adjuster in an incorporated

18  adjusting firm in which no officer, director, or stockholder

19  is an adjuster, is responsible and accountable for the acts of

20  salaried employees under his or her direct supervision and

21  control while acting on behalf of the adjusting firm.  Nothing

22  in this section renders any person criminally liable or

23  subject to any disciplinary proceedings for any act unless the

24  person personally committed or knew or should have known of

25  the act and of the facts constituting a violation of this

26  code.

27         (5)  The office department may suspend or revoke the

28  license of any adjuster who is employed by a person whose

29  license is currently suspended or revoked.

30         (6)  An adjusting firm location may not conduct the

31  business of insurance unless a primary adjuster is designated.

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 1  Failure of the person operating the adjusting firm to

 2  designate a primary adjuster for the firm, or for each

 3  location, as applicable, on a form prescribed by the

 4  commission department within 30 days after inception of the

 5  firm or change of primary adjuster designation, constitutes

 6  grounds for requiring the adjusting firm to obtain an

 7  adjusting firm license pursuant to s. 626.8696.

 8         (7)  Any adjusting firm may request, on a form

 9  prescribed by the commission department, verification from the

10  office department of any person's current licensure status. If

11  a request is mailed to the office department within 5 working

12  days after the date an adjuster is hired, and the office

13  department subsequently notifies the adjusting firm that an

14  employee's license is currently suspended, revoked, or has

15  been denied, the license of the primary adjuster shall not be

16  revoked or suspended if the unlicensed person is immediately

17  dismissed from employment as an adjuster with the firm.

18         Section 981.  Subsections (1) and (5) of section

19  626.8696, Florida Statutes, are amended to read:

20         626.8696  Application for adjusting firm license.--

21         (1)  The application for an adjusting firm license must

22  include:

23         (a)  The name of each majority owner, partner, officer,

24  and director of the adjusting firm.

25         (b)  The resident address of each person required to be

26  listed in the application under paragraph (a).

27         (c)  The name of the adjusting firm and its principal

28  business address.

29         (d)  The location of each adjusting firm office and the

30  name under which each office conducts or will conduct

31  business.

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 1         (e)  Any additional information which the commission

 2  department may require.

 3         (5)  An adjusting firm required to be licensed pursuant

 4  to s. 626.8695 must remain so licensed for a period of 3 years

 5  from the date of licensure, unless the license is suspended or

 6  revoked. The office department may suspend or revoke the

 7  adjusting firm's authority to do business for activities

 8  occurring during the time the firm is licensed, regardless of

 9  whether the licensing period has terminated.

10         Section 982.  Section 626.8697, Florida Statutes, is

11  amended to read:

12         626.8697  Grounds for refusal, suspension, or

13  revocation of adjusting firm license.--

14         (1)  The office department shall deny, suspend, revoke,

15  or refuse to continue the license of any adjusting firm if it

16  finds, as to any adjusting firm or as to any majority owner,

17  partner, manager, director, officer, or other person who

18  manages or controls the firm, that any of the following

19  grounds exist:

20         (a)  Lack by the firm of one or more of the

21  qualifications for the license as specified in this code.

22         (b)  Material misstatement, misrepresentation, or fraud

23  in obtaining the license or in attempting to obtain the

24  license.

25         (2)  The office department may, in its discretion,

26  deny, suspend, revoke, or refuse to continue the license of

27  any adjusting firm if it finds that any of the following

28  applicable grounds exist with respect to the firm or any

29  owner, partner, manager, director, officer, or other person

30  who is otherwise involved in the operation of the firm:

31  

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 1         (a)  Any cause for which issuance of the license could

 2  have been refused had it then existed and been known to the

 3  office department.

 4         (b)  Violation of any provision of this code or of any

 5  other law applicable to the business of insurance.

 6         (c)  Violation of any order or rule of the office or

 7  commission department.

 8         (d)  An owner, partner, manager, director, officer, or

 9  other person who manages or controls the firm having been

10  found guilty of or having pleaded guilty or nolo contendere to

11  a felony or a crime punishable by imprisonment of 1 year or

12  more under the laws of the United States or of any state or

13  under the laws of any other country, without regard to whether

14  adjudication was made or withheld by the court.

15         (e)  Failure to inform the office department in writing

16  within 30 days after a pleading by an owner, partner, manager,

17  director, officer, or other person managing or controlling the

18  firm of guilty or nolo contendere to, or being convicted or

19  found guilty of, any felony or a crime punishable by

20  imprisonment of 1 year or more under the laws of the United

21  States or of any state, or under the laws of any other

22  country, without regard to whether adjudication was made or

23  withheld by the court.

24         (f)  Knowingly aiding, assisting, procuring, advising,

25  or abetting any person in the violation of or to violate a

26  provision of the insurance code or any order or rule of the

27  office or commission department.

28         (g)  Knowingly employing any individual in a managerial

29  capacity or in a capacity dealing with the public who is under

30  an order of revocation or suspension issued by the office

31  department.

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 1         (h)  Committing any of the following acts with such a

 2  frequency as to have made the operation of the adjusting firm

 3  hazardous to the insurance-buying public or other persons:

 4         1.  Misappropriation, conversion, or unlawful or

 5  unreasonable withholding of moneys belonging to insurers or

 6  insureds or beneficiaries or claimants or to others and

 7  received in the conduct of business under the license.

 8         2.  Misrepresentation or deception with regard to the

 9  business of insurance, dissemination of information, or

10  advertising.

11         3.  Demonstrated lack of fitness or trustworthiness to

12  engage in the business of insurance adjusting arising out of

13  activities related to insurance adjusting or the adjusting

14  firm.

15         (i)  Failure to appoint a primary adjuster.

16         (3)  In lieu of discretionary refusal, suspension, or

17  revocation of an adjusting firm's license, the office

18  department may impose an administrative penalty of up to

19  $1,000 for each violation or ground provided under this

20  section, not to exceed an aggregate amount of $10,000 for all

21  violations or grounds.

22         (4)  If any adjusting firm, having been licensed,

23  thereafter has such license revoked or suspended, the firm

24  shall terminate all adjusting activities while the license is

25  revoked or suspended.

26         Section 983.  Section 626.8698, Florida Statutes, is

27  amended to read:

28         626.8698  Disciplinary guidelines for public

29  adjusters.--The office department may deny, suspend, or revoke

30  the license of a public adjuster, and administer a fine not to

31  exceed $5,000 per act, for any of the following:

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 1         (1)  Violating any provision of this chapter or a rule

 2  or order of the office or commission department;

 3         (2)  Receiving payment or anything of value as a result

 4  of an unfair or deceptive practice;

 5         (3)  Receiving or accepting any fee, kickback, or other

 6  thing of value pursuant to any agreement or understanding,

 7  oral or otherwise; entering into a split-fee arrangement with

 8  another person who is not a public adjuster; or being

 9  otherwise paid or accepting payment for services that have not

10  been performed;

11         (4)  Violating s. 316.066 or s. 817.234;

12         (5)  Soliciting or otherwise taking advantage of a

13  person who is vulnerable, emotional, or otherwise upset as the

14  result of a trauma, accident, or other similar occurrence; or

15         (6)  Violating any ethical rule of the commission

16  department.

17         Section 984.  Section 626.870, Florida Statutes, is

18  amended to read:

19         626.870  Application for license.--

20         (1)  Application for a license under this part shall be

21  made as provided in s. 626.171 and related sections of this

22  code.

23         (2)  The commission department shall so prepare the

24  form of the application as to elicit and require from the

25  applicant the information necessary to enable the office

26  department to determine whether the applicant possesses the

27  qualifications prerequisite to issuance of the license to the

28  applicant.

29         (3)  The commission department may, in its discretion,

30  require that the application be supplemented by the

31  certificate or affidavit of such person or persons as it deems

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 1  necessary for its determination of the applicant's residence,

 2  business reputation, and reputation for trustworthiness. The

 3  commission department shall prescribe and the office may

 4  furnish the forms for such certificates and affidavits.

 5         Section 985.  Section 626.871, Florida Statutes, is

 6  amended to read:

 7         626.871  Reappointment after military service.--The

 8  office department may, without requiring a further written

 9  examination, issue an appointment as an adjuster to a formerly

10  licensed and appointed adjuster of this state who held a

11  current adjuster's appointment at the time of entering service

12  in the Armed Forces of the United States, subject to the

13  following conditions:

14         (1)  The period of military service must not have been

15  in excess of 3 years;

16         (2)  The application for the appointment must be filed

17  with the office department and the applicable fee paid, within

18  12 months following the date of honorable discharge of the

19  applicant from the military service; and

20         (3)  The new appointment will be of the same type and

21  class as that currently effective at the time the applicant

22  entered military service; but, if such type and class of

23  appointment is not being currently issued under this code, the

24  new appointment shall be of that type and class or classes

25  most closely resembling those of the former appointment.

26         Section 986.  Subsections (1) and (5) of section

27  626.872, Florida Statutes, are amended to read:

28         626.872  Temporary license.--

29         (1)  The office department may, in its discretion,

30  issue a temporary license as an independent adjuster or as a

31  

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 1  company employee adjuster, subject to the following

 2  conditions:

 3         (a)  The applicant must be an employee of an adjuster

 4  currently licensed by the office department, an employee of an

 5  authorized insurer, or an employee of an established adjusting

 6  firm or corporation which is supervised by a currently

 7  licensed independent adjuster.

 8         (b)  The application must be accompanied by a

 9  certificate of employment and a report as to the applicant's

10  integrity and moral character on a form prescribed by the

11  commission department and executed by the employer.

12         (c)  The applicant must be a natural person of at least

13  18 years of age, must be a bona fide resident of this state,

14  must be trustworthy, and must have such business reputation as

15  would reasonably assure that the applicant will conduct his or

16  her business as an adjuster fairly and in good faith and

17  without detriment to the public.

18         (d)  The applicant's employer is responsible for the

19  adjustment acts of any licensee under this section.

20         (e)  The applicable license fee specified must be paid

21  before issuance of the temporary license.

22         (f)  The temporary license shall be effective for a

23  period of 1 year, but subject to earlier termination at the

24  request of the employer, or if the licensee fails to take an

25  examination as an independent adjuster or company employee

26  adjuster within 6 months after issuance of the temporary

27  license, or if suspended or revoked by the office department.

28         (5)  The office department shall not issue a temporary

29  license as an independent adjuster or as a company employee

30  adjuster to any individual who has ever held such a license in

31  this state.

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 1         Section 987.  Subsection (1) of section 626.873,

 2  Florida Statutes, is amended to read:

 3         626.873  Nonresident company employee adjusters.--

 4         (1)  The office department shall, upon application

 5  therefor, issue a license to an applicant for a nonresident

 6  adjuster's license upon determining that the applicant has

 7  paid the applicable license fees required under s. 624.501

 8  and:

 9         (a)  Is a currently licensed insurance adjuster in his

10  or her home state, if such state requires a license.

11         (b)  Is an employee of an insurer, or a wholly owned

12  subsidiary of an insurer, admitted to do business in this

13  state.

14         (c)  Has filed a certificate or letter of authorization

15  from the insurance department of his or her home state, if

16  such state requires an adjuster to be licensed, stating that

17  he or she holds a current license or authorization to adjust

18  insurance losses.  Such certificate or authorization must be

19  signed by the insurance commissioner, or his or her deputy, of

20  the adjuster's home state and must reflect whether or not the

21  adjuster has ever had his or her license or authorization in

22  the adjuster's home state suspended or revoked and, if such is

23  the case, the reason for such action.

24         Section 988.  Section 626.8732, Florida Statutes, is

25  amended to read:

26         626.8732  Nonresident public adjuster's qualifications,

27  bond.--

28         (1)  The office department shall, upon application

29  therefor, issue a license to an applicant for a nonresident

30  public adjuster's license upon determining that the applicant

31  

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 1  has paid the applicable license fees required under s. 624.501

 2  and:

 3         (a)  Is a natural person at least 18 years of age.

 4         (b)  Has passed to the satisfaction of the office

 5  department a written Florida public adjuster's examination of

 6  the scope prescribed in s. 626.241(6); however, the

 7  requirement for such an examination does not apply to any of

 8  the following:

 9         1.  An applicant who is licensed as a resident public

10  adjuster in his or her state of residence, when that state

11  requires the passing of a written examination in order to

12  obtain the license and a reciprocal agreement with the

13  appropriate official of that state has been entered into by

14  the office department; or

15         2.  An applicant who is licensed as a nonresident

16  public adjuster in a state other than his or her state of

17  residence when the state of licensure requires the passing of

18  a written examination in order to obtain the license and a

19  reciprocal agreement with the appropriate official of the

20  state of licensure has been entered into by the office

21  department.

22         (c)  Is self-employed as a public adjuster or

23  associated with or employed by a public adjusting firm or

24  other public adjuster. Applicants licensed as nonresident

25  public adjusters under this section must be appointed as such

26  in accordance with the provisions of ss. 626.112 and 626.451.

27  Appointment fees in the amount specified in s. 624.501 must be

28  paid to the office department in advance. The appointment of a

29  nonresident public adjuster shall continue in force until

30  suspended, revoked, or otherwise terminated, but subject to

31  biennial renewal or continuation by the licensee in accordance

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 1  with procedures prescribed in s. 626.381 for licensees in

 2  general.

 3         (d)  Is trustworthy and has such business reputation as

 4  would reasonably assure that he or she will conduct his or her

 5  business as a nonresident public adjuster fairly and in good

 6  faith and without detriment to the public.

 7         (e)  Has had sufficient experience, training, or

 8  instruction concerning the adjusting of damages or losses

 9  under insurance contracts, other than life and annuity

10  contracts; is sufficiently informed as to the terms and

11  effects of the provisions of those types of insurance

12  contracts; and possesses adequate knowledge of the laws of

13  this state relating to such contracts as to enable and qualify

14  him or her to engage in the business of insurance adjuster

15  fairly and without injury to the public or any member thereof

16  with whom he or she may have business as a public adjuster.

17         (2)  The applicant shall furnish the following with his

18  or her application:

19         (a)  A complete set of his or her fingerprints. The

20  applicant's fingerprints must be certified by an authorized

21  law enforcement officer. The office department may not

22  authorize an applicant to take the required examination or

23  issue a nonresident public adjuster's license to the applicant

24  until the office department has received a report from the

25  Florida Department of Law Enforcement and the Federal Bureau

26  of Investigation relative to the existence or nonexistence of

27  a criminal history report based on the applicant's

28  fingerprints.

29         (b)  If currently licensed as a resident public

30  adjuster in the applicant's state of residence, a certificate

31  or letter of authorization from the licensing authority of the

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 1  applicant's state of residence, stating that the applicant

 2  holds a current or comparable license to act as a public

 3  adjuster. The certificate or letter of authorization must be

 4  signed by the insurance commissioner or his or her deputy or

 5  the appropriate licensing official and must disclose whether

 6  the adjuster has ever had any license or eligibility to hold

 7  any license declined, denied, suspended, revoked, or placed on

 8  probation or whether an administrative fine or penalty has

 9  been levied against the adjuster and, if so, the reason for

10  the action.

11         (c)  If the applicant's state of residence does not

12  require licensure as a public adjuster and the applicant has

13  been licensed as a resident insurance adjuster, agent, broker,

14  or other insurance representative in his or her state of

15  residence or any other state within the past 3 years, a

16  certificate or letter of authorization from the licensing

17  authority stating that the applicant holds or has held a

18  license to act as such an insurance adjuster, agent, or other

19  insurance representative. The certificate or letter of

20  authorization must be signed by the insurance commissioner or

21  his or her deputy or the appropriate licensing official and

22  must disclose whether or not the adjuster, agent, or other

23  insurance representative has ever had any license or

24  eligibility to hold any license declined, denied, suspended,

25  revoked, or placed on probation or whether an administrative

26  fine or penalty has been levied against the adjuster and, if

27  so, the reason for the action.

28         (3)  At the time of application for license as a

29  nonresident public adjuster, the applicant shall file with the

30  office department a bond executed and issued by a surety

31  insurer authorized to transact surety business in this state,

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 1  in the amount of $50,000, conditioned for the faithful

 2  performance of his or her duties as a nonresident public

 3  adjuster under the license applied for. The bond must be in

 4  favor of the office department and must specifically authorize

 5  recovery by the office department of the damages sustained if

 6  the licensee commits fraud or unfair practices in connection

 7  with his or her business as nonresident public adjuster. The

 8  aggregate liability of the surety for all the damages may not

 9  exceed the amount of the bond. The bond may not be terminated

10  unless at least 30 days' written notice is given to the

11  licensee and filed with the office department.

12         (4)  The usual and customary records pertaining to

13  transactions under the license of a nonresident public

14  adjuster must be retained for at least 3 years after

15  completion of the adjustment and must be made available in

16  this state to the office department upon request. The failure

17  of a nonresident public adjuster to properly maintain records

18  and make them available to the office department upon request

19  constitutes grounds for the immediate suspension of the

20  license issued under this section.

21         (5)  After licensure as a nonresident public adjuster,

22  as a condition of doing business in this state, the licensee

23  must annually on or before January 1, on a form prescribed by

24  the commission department, submit an affidavit certifying that

25  the licensee is familiar with and understands the insurance

26  code and rules adopted thereunder and the provisions of the

27  contracts negotiated or to be negotiated. Compliance with this

28  filing requirement is a condition precedent to the issuance,

29  continuation, reinstatement, or renewal of a nonresident

30  public adjuster's appointment.

31  

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 1         Section 989.  Subsections (1), (3), and (4) of section

 2  626.8734, Florida Statutes, are amended to read:

 3         626.8734  Nonresident independent adjuster's

 4  qualifications.--

 5         (1)  The office department shall, upon application

 6  therefor, issue a license to an applicant for a nonresident

 7  independent adjuster's license upon determining that the

 8  applicant has paid the applicable license fees required under

 9  s. 624.501 and:

10         (a)  Is a natural person at least 18 years of age.

11         (b)  Has passed to the satisfaction of the office

12  department a written Florida independent adjuster's

13  examination of the scope prescribed in s. 626.241(6); however,

14  the requirement for the examination does not apply to any of

15  the following:

16         1.  An applicant who is licensed as a resident

17  independent adjuster in his or her state of residence when

18  that state requires the passing of a written examination in

19  order to obtain the license and a reciprocal agreement with

20  the appropriate official of that state has been entered into

21  by the office department; or

22         2.  An applicant who is licensed as a nonresident

23  independent adjuster in a state other than his or her state of

24  residence when the state of licensure requires the passing of

25  a written examination in order to obtain the license and a

26  reciprocal agreement with the appropriate official of the

27  state of licensure has been entered into by the office

28  department.

29         (c)  Is self-employed or associated with or employed by

30  an independent adjusting firm or other independent adjuster.

31  Applicants licensed as nonresident independent adjusters under

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 1  this section must be appointed as such in accordance with the

 2  provisions of ss. 626.112 and 626.451. Appointment fees in the

 3  amount specified in s. 624.501 must be paid to the office

 4  department in advance. The appointment of a nonresident

 5  independent adjuster shall continue in force until suspended,

 6  revoked, or otherwise terminated, but subject to biennial

 7  renewal or continuation by the licensee in accordance with

 8  procedures prescribed in s. 626.381 for licensees in general.

 9         (d)  Is trustworthy and has such business reputation as

10  would reasonably assure that he or she will conduct his or her

11  business as a nonresident independent adjuster fairly and in

12  good faith and without detriment to the public.

13         (e)  Has had sufficient experience, training, or

14  instruction concerning the adjusting of damages or losses

15  under insurance contracts, other than life and annuity

16  contracts; is sufficiently informed as to the terms and

17  effects of the provisions of those types of insurance

18  contracts; and possesses adequate knowledge of the laws of

19  this state relating to such contracts as to enable and qualify

20  him or her to engage in the business of insurance adjuster

21  fairly and without injury to the public or any member thereof

22  with whom he or she may have business as an independent

23  adjuster.

24         (3)  The usual and customary records pertaining to

25  transactions under the license of a nonresident independent

26  adjuster must be retained for at least 3 years after

27  completion of the adjustment and must be made available in

28  this state to the office department upon request. The failure

29  of a nonresident independent adjuster to properly maintain

30  records and make them available to the office department upon

31  

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 1  request constitutes grounds for the immediate suspension of

 2  the license issued under this section.

 3         (4)  After licensure as a nonresident independent

 4  adjuster, as a condition of doing business in this state, the

 5  licensee must annually on or before January 1, on a form

 6  prescribed by the commission department, submit an affidavit

 7  certifying that the licensee is familiar with and understands

 8  the insurance laws and administrative rules of this state and

 9  the provisions of the contracts negotiated or to be

10  negotiated. Compliance with this filing requirement is a

11  condition precedent to the issuance, continuation,

12  reinstatement, or renewal of a nonresident independent

13  adjuster's appointment.

14         Section 990.  Section 626.8736, Florida Statutes, is

15  amended to read:

16         626.8736  Nonresident independent or public adjusters;

17  service of process.--

18         (1)  Each licensed nonresident independent or public

19  adjuster shall appoint the Chief Financial Officer Insurance

20  Commissioner and Treasurer and his or her successors in office

21  as his or her attorney to receive service of legal process

22  issued against the nonresident independent or public adjuster

23  in this state, upon causes of action arising within this state

24  out of transactions under his license and appointment. Service

25  upon the Chief Financial Officer Insurance Commissioner and

26  Treasurer as attorney shall constitute effective legal service

27  upon the nonresident independent or public adjuster.

28         (2)  The appointment of the Chief Financial Officer

29  Insurance Commissioner and Treasurer for service of process

30  shall be irrevocable for as long as there could be any cause

31  of action against the nonresident independent or public

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 1  adjuster arising out of his or her insurance transactions in

 2  this state.

 3         (3)  Duplicate copies of legal process against the

 4  nonresident independent or public adjuster shall be served

 5  upon the Chief Financial Officer Insurance Commissioner and

 6  Treasurer by a person competent to serve a summons.

 7         (4)  Upon receiving the service, the Chief Financial

 8  Officer Insurance Commissioner and Treasurer shall forthwith

 9  send one of the copies of the process, by registered mail with

10  return receipt requested, to the defendant nonresident

11  independent or public adjuster at his or her last address of

12  record with the office department.

13         (5)  The Chief Financial Officer Insurance Commissioner

14  and Treasurer shall keep a record of the day and hour of

15  service upon him or her of all legal process received under

16  this section.

17         Section 991.  Section 626.8738, Florida Statutes, is

18  amended to read:

19         626.8738  Penalty for violation.--In addition to any

20  other remedy imposed pursuant to this code, any person who

21  acts as a resident or nonresident public adjuster or holds

22  himself or herself out to be a public adjuster to adjust

23  claims in this state, without being licensed by the office

24  department as a public adjuster and appointed as a public

25  adjuster, commits a felony of the third degree, punishable as

26  provided in s. 775.082, s. 775.083, or s. 775.084. Each act in

27  violation of this section constitutes a separate offense.

28         Section 992.  Section 626.874, Florida Statutes, is

29  amended to read:

30         626.874  Catastrophe or emergency adjusters.--

31  

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 1         (1)  In the event of a catastrophe or emergency, the

 2  office department may issue a license, for the purposes and

 3  under the conditions which it shall fix and for the period of

 4  emergency as it shall determine, to persons who are residents

 5  or nonresidents of this state and who are not licensed

 6  adjusters under this part but who have been designated and

 7  certified to it as qualified to act as adjusters by

 8  independent resident adjusters or by an authorized insurer or

 9  by a licensed general lines agent to adjust claims, losses, or

10  damages under policies or contracts of insurance issued by

11  such insurers.  The fee for the license shall be as provided

12  in s. 624.501(12)(c).

13         (2)  If any person not a licensed adjuster who has been

14  permitted to adjust such losses, claims, or damages under the

15  conditions and circumstances set forth in subsection (1),

16  engages in any of the misconduct described in or contemplated

17  by ss. 626.611 and 626.621, the office department, without

18  notice and hearing, shall be authorized to issue its order

19  denying such person the privileges granted under this section;

20  and thereafter it shall be unlawful for any such person to

21  adjust any such losses, claims, or damages in this state.

22         Section 993.  Section 626.878, Florida Statutes, is

23  amended to read:

24         626.878  Rules; code of ethics.--An adjuster shall

25  subscribe to the code of ethics specified in the rules of the

26  commission department.

27         Section 994.  Paragraphs (d) and (m) of subsection (1)

28  of section 626.88, Florida Statutes, are amended to read:

29         626.88  Definitions of "administrator" and "insurer".--

30         (1)  For the purposes of this part, an "administrator"

31  is any person who directly or indirectly solicits or effects

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 1  coverage of, collects charges or premiums from, or adjusts or

 2  settles claims on residents of this state in connection with

 3  authorized commercial self-insurance funds or with insured or

 4  self-insured programs which provide life or health insurance

 5  coverage or coverage of any other expenses described in s.

 6  624.33(1) or any person who, through a health care risk

 7  contract as defined in s. 641.234 with an insurer or health

 8  maintenance organization, provides billing and collection

 9  services to health insurers and health maintenance

10  organizations on behalf of health care providers, other than

11  any of the following persons:

12         (d)  A health care services plan, health maintenance

13  organization, professional service plan corporation, or person

14  in the business of providing continuing care, possessing a

15  valid certificate of authority issued by the office

16  department, and the sales representatives thereof, if the

17  activities of such entity are limited to the activities

18  permitted under the certificate of authority.

19         (m)  A person approved by the department of Insurance

20  who administers only self-insured workers' compensation plans.

21  

22  A person who provides billing and collection services to

23  health insurers and health maintenance organizations on behalf

24  of health care providers shall comply with the provisions of

25  ss. 627.6131, 641.3155, and 641.51(4).

26         Section 995.  Section 626.8805, Florida Statutes, is

27  amended to read:

28         626.8805  Certificate of authority to act as

29  administrator.--

30         (1)  It is unlawful for any person to act as or hold

31  himself or herself out to be an administrator in this state

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 1  without a valid certificate of authority issued by the office

 2  department pursuant to ss. 626.88-626.894.  To qualify for and

 3  hold authority to act as an administrator in this state, an

 4  administrator must otherwise be in compliance with this code

 5  and with its organizational agreement. The failure of any

 6  person to hold such a certificate while acting as an

 7  administrator shall subject such person to a fine of not less

 8  than $5,000 or more than $10,000 for each violation.

 9         (2)  The administrator shall file with the office

10  department an application for a certificate of authority upon

11  a form to be adopted by the commission and furnished by the

12  office department, which application shall include or have

13  attached the following information and documents:

14         (a)  All basic organizational documents of the

15  administrator, such as the articles of incorporation, articles

16  of association, partnership agreement, trade name certificate,

17  trust agreement, shareholder agreement, and other applicable

18  documents, and all amendments to those documents.

19         (b)  The bylaws, rules, and regulations or similar

20  documents regulating the conduct or the internal affairs of

21  the administrator.

22         (c)  The names, addresses, official positions, and

23  professional qualifications of the individuals who are

24  responsible for the conduct of the affairs of the

25  administrator, including all members of the board of

26  directors, board of trustees, executive committee, or other

27  governing board or committee, the principal officers in the

28  case of a corporation, the partners or members in the case of

29  a partnership or association, and any other person who

30  exercises control or influence over the affairs of the

31  administrator.

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 1         (d)  Annual statements or reports for the 3 most recent

 2  years, or such other information as the office department may

 3  require in order to review the current financial condition of

 4  the applicant.

 5         (e)  If the applicant is not currently acting as an

 6  administrator, a statement of the amounts and sources of the

 7  funds available for organization expenses and the proposed

 8  arrangements for reimbursement and compensation of

 9  incorporators or other principals.

10         (3)  The applicant shall make available for inspection

11  by the office department copies of all contracts with insurers

12  or other persons utilizing the services of the administrator.

13         (4)  The office department shall not issue a

14  certificate of authority if it determines that the

15  administrator or any principal thereof is not competent,

16  trustworthy, financially responsible, or of good personal and

17  business reputation or has had an insurance license denied for

18  cause by any state.

19         (5)  A certificate of authority issued under this

20  section shall remain valid, unless suspended or revoked by the

21  office department, so long as the certificateholder continues

22  in business in this state.

23         (6)  A certificate of authority issued under this

24  section shall indicate that the administrator is authorized to

25  administer commercial self-insurance funds or life and health

26  programs or both, except that a certificate of authority

27  issued prior to October 1, 1988, does not authorize the

28  administration of commercial self-insurance funds.

29         Section 996.  Section 626.8809, Florida Statutes, is

30  amended to read:

31  

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 1         626.8809  Fidelity bond.--An administrator shall have

 2  and keep in full force and effect a fidelity bond equal to at

 3  least 10 percent of the amount of the funds handled or managed

 4  annually by the administrator. However, the office department

 5  may not require a bond greater than $500,000 unless the office

 6  department, after due notice to all interested parties and

 7  opportunity for hearing and after consideration of the record,

 8  requires an amount in excess of $500,000 but not more than 10

 9  percent of the amount of the funds handled or managed annually

10  by the administrator.

11         Section 997.  Section 626.8814, Florida Statutes, is

12  amended to read:

13         626.8814  Disclosure of ownership or affiliation.--Each

14  administrator shall identify to the office department any

15  ownership interest or affiliation of any kind with any

16  insurance company responsible for providing benefits directly

17  or through reinsurance to any plan for which the administrator

18  provides administrative services.

19         Section 998.  Subsection (2) of section 626.884,

20  Florida Statutes, is amended to read:

21         626.884  Maintenance of records by administrator;

22  access; confidentiality.--

23         (2)  The office department shall have access to books

24  and records maintained by the administrator for the purpose of

25  examination, audit, and inspection.  Information contained in

26  such books and records is confidential and exempt from the

27  provisions of s. 119.07(1) if the disclosure of such

28  information would reveal a trade secret as defined in s.

29  688.002. However, the office department may use such

30  information in any proceeding instituted against the

31  administrator.

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 1         Section 999.  Subsections (1) and (3) of section

 2  626.89, Florida Statutes, are amended to read:

 3         626.89  Annual financial statement and filing fee;

 4  notice of change of ownership.--

 5         (1)  Each authorized administrator shall file with the

 6  office department a full and true statement of its financial

 7  condition, transactions, and affairs. The statement shall be

 8  filed annually on or before March 1 or within such extension

 9  of time therefor as the office department for good cause may

10  have granted and shall be for the preceding calendar year. The

11  statement shall be in such form and contain such matters as

12  the commission department prescribes and shall be verified by

13  at least two officers of such administrator.

14         (3)  In addition, the administrator shall immediately

15  notify the office department of any material change in its

16  ownership.

17         Section 1000.  Section 626.891, Florida Statutes, is

18  amended to read:

19         626.891  Grounds for suspension or revocation of

20  certificate of authority.--

21         (1)  The certificate of authority of an administrator

22  shall be suspended or revoked if the office department

23  determines that the administrator:

24         (a)  Is in an unsound financial condition;

25         (b)  Has used or is using such methods or practices in

26  the conduct of its business so as to render its further

27  transaction of business in this state hazardous or injurious

28  to insured persons or the public; or

29         (c)  Has failed to pay any judgment rendered against it

30  in this state within 60 days after the judgment has become

31  final.

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 1         (2)  The office department may, in its discretion,

 2  suspend or revoke the certificate of authority of an

 3  administrator if it finds that the administrator:

 4         (a)  Has violated any lawful rule or order of the

 5  commission or office department or any provision of this

 6  chapter;

 7         (b)  Has refused to be examined or to produce its

 8  accounts, records, and files for examination, or if any of its

 9  officers has refused to give information with respect to its

10  affairs or has refused to perform any other legal obligation

11  as to such examination, when required by the office

12  department;

13         (c)  Has, without just cause, refused to pay proper

14  claims or perform services arising under its contracts or has,

15  without just cause, compelled insured persons to accept less

16  than the amount due them or to employ attorneys or bring suit

17  against the administrator to secure full payment or settlement

18  of such claims;

19         (d)  Is or was affiliated with and under the same

20  general management or interlocking directorate or ownership as

21  another administrator which transacts business in this state

22  without having a certificate of authority;

23         (e)  At any time fails to meet any qualification for

24  which issuance of the certificate could have been refused had

25  such failure then existed and been known to the office

26  department;

27         (f)  Has been convicted of, or has entered a plea of

28  guilty or nolo contendere to, a felony relating to the

29  business of insurance or insurance administration in this

30  state or in any other state without regard to whether

31  adjudication was withheld; or

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 1         (g)  Is under suspension or revocation in another

 2  state.

 3         (3)  The office department may, pursuant to s. 120.60,

 4  in its discretion and without advance notice or hearing

 5  thereon, immediately suspend the certificate of any

 6  administrator if it finds that one or more of the following

 7  circumstances exist:

 8         (a)  The administrator is insolvent or impaired.

 9         (b)  The fidelity bond required by s. 626.8809 is not

10  maintained.

11         (c)  A proceeding for receivership, conservatorship,

12  rehabilitation, or other delinquency proceeding regarding the

13  administrator has been commenced in any state.

14         (d)  The financial condition or business practices of

15  the administrator otherwise pose an imminent threat to the

16  public health, safety, or welfare of the residents of this

17  state.

18         (4)  The violation of this part by any insurer shall be

19  a ground for suspension or revocation of the certificate of

20  authority of that insurer in this state.

21         Section 1001.  Section 626.892, Florida Statutes, is

22  amended to read:

23         626.892  Order of suspension or revocation of

24  certificate of authority; notice.--

25         (1)  The suspension or revocation of a certificate of

26  authority of an administrator shall be effected by order of

27  the office department mailed to the administrator by

28  registered or certified mail.

29         (2)  In its discretion, the office department may cause

30  notice of any such revocation or suspension to be published in

31  

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 1  one or more newspapers of general circulation published in

 2  this state.

 3         Section 1002.  Subsections (1), (3), and (4) of section

 4  626.894, Florida Statutes, are amended to read:

 5         626.894  Administrative fine in lieu of suspension or

 6  revocation.--

 7         (1)  If the office department finds that one or more

 8  grounds exist for the suspension or revocation of a

 9  certificate of authority issued under this part, the office

10  department may, in lieu of such suspension or revocation,

11  impose a fine upon the administrator.

12         (3)  With respect to any knowing and willful violation

13  of a lawful order or rule of the office or commission

14  department or a provision of this part, the office department

15  may impose a fine upon the administrator in an amount not to

16  exceed $5,000 for each such violation.  In no event may such

17  fine exceed an aggregate amount of $25,000 for all knowing and

18  willful violations arising out of the same action. In addition

19  to such fine, the administrator shall make restitution when

20  due in accordance with the provisions of subsection (2).

21         (4)  The failure of an administrator to make

22  restitution when due as required under this section

23  constitutes a willful violation of this part. However, if an

24  administrator in good faith is uncertain as to whether any

25  restitution is due or as to the amount of restitution due, it

26  shall promptly notify the office department of the

27  circumstances; and the failure to make restitution pending a

28  determination of whether restitution is due or the amount of

29  restitution due will not constitute a violation of this part.

30         Section 1003.  Section 626.895, Florida Statutes, is

31  amended to read:

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 1         626.895  Definition of "service company" or "service

 2  agent".--For the purpose of this part, a "service company" is

 3  any business entity which has met all the requirements of ss.

 4  626.895-626.899, which does not control funds, and which has

 5  obtained office department approval to contract with

 6  self-insurers or multiple-employer welfare arrangements for

 7  the purpose of providing all or any part of the services

 8  necessary to establish and maintain a multiple-employer

 9  welfare arrangement as defined in s. 624.437(1).  The term

10  "service agent" is synonymous with the term "service company"

11  as used in this part.

12         Section 1004.  Subsection (3) of section 626.896,

13  Florida Statutes, is amended to read:

14         626.896  Servicing requirements for self-insurers and

15  multiple-employer welfare arrangements.--

16         (3)  It is the responsibility of the self-insurer or

17  multiple-employer welfare arrangement to notify the office

18  department within 90 days of changing its method of fulfilling

19  its servicing requirements from those which were previously

20  filed with the office department.

21         Section 1005.  Subsection (2) of section 626.897,

22  Florida Statutes, is amended to read:

23         626.897  Application for authorization to act as

24  service company; bond.--

25         (2)  Any business desiring to act as a service company

26  for individual self-insurers or multiple-employer welfare

27  arrangements shall be approved by the office department.  Any

28  business acting as a service company prior to October 1, 1983,

29  will be approved as a service company upon complying with the

30  filing requirements of this section and s. 626.898.  The

31  failure of any person to obtain such approval while acting as

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 1  a service company shall subject such person to a fine of not

 2  less than $5,000 or more than $10,000 for each violation.

 3         Section 1006.  Subsections (3) and (10) of section

 4  626.898, Florida Statutes, are amended to read:

 5         626.898  Requirements for retaining authorization as

 6  service company; recertification.--

 7         (3)(a)  Each service company shall maintain at one or

 8  more locations within this state copies of all contracts with

 9  each self-insurer or multiple-employer welfare arrangement

10  that it services and records relating thereto which are

11  sufficient in type and quantity to verify the accuracy and

12  completeness of all reports and documents submitted to the

13  office department pursuant to this part. In the event that the

14  service company has its records distributed in multiple

15  locations, it shall inform the office department as to the

16  location of each type of record, as well as the location of

17  specific records for the self-insurers or multiple-employer

18  welfare arrangements it services.

19         (b)  These records shall be open to inspection by

20  representatives of the office department during regular

21  business hours. All records shall be retained according to the

22  schedule adopted by the commission department for similar

23  documents.  The location of these records shall be made known

24  to the office department as necessary.

25         (10)  Each service company shall identify to the office

26  department any ownership interest or affiliation of any kind

27  with any insurance company responsible directly or through

28  reinsurance for providing benefits to any plan for which it

29  provides services.

30         Section 1007.  Section 626.899, Florida Statutes, is

31  amended to read:

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 1         626.899  Withdrawal of authorization as service

 2  company.--The failure to comply with any provision of ss.

 3  626.895-626.899 or with any rule or any order of the

 4  commission or office department within the time prescribed

 5  shall be considered good cause for withdrawal of the

 6  certificate of approval.  The office department shall by

 7  registered or certified mail give to the service company prior

 8  written notice of such withdrawal.  The service company shall

 9  have 30 days from the date of mailing to request a hearing.

10  The failure to request a hearing within the time prescribed

11  shall result in the withdrawal becoming effective 45 days from

12  the date of mailing of the original notice.  In no event shall

13  the withdrawal of the certificate of approval be effective

14  prior to the date upon which a hearing, if requested, is

15  scheduled.  Copies of such notice of withdrawal of a

16  certificate of approval shall be furnished by the office

17  department to each self-funded program serviced.

18         Section 1008.  Subsection (4) of section 626.901,

19  Florida Statutes, is amended to read:

20         626.901  Representing or aiding unauthorized insurer

21  prohibited.--

22         (4)  This section does not apply to:

23         (a)  Matters authorized to be done by the office

24  department under the Unauthorized Insurers Process Law, ss.

25  626.904-626.912.

26         (b)  Surplus lines insurance when written pursuant to

27  the Surplus Lines Law, ss. 626.913-626.937.

28         (c)  Transactions as to which a certificate of

29  authority is not required of an insurer, as stated in s.

30  624.402.

31  

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 1         (d)  Independently procured coverage written pursuant

 2  to s. 626.938.

 3         Section 1009.  Section 626.906, Florida Statutes, is

 4  amended to read:

 5         626.906  Acts constituting Chief Financial Officer

 6  Insurance Commissioner and Treasurer as process agent.--Any of

 7  the following acts in this state, effected by mail or

 8  otherwise, by an unauthorized foreign insurer, alien insurer,

 9  or person representing or aiding such an insurer is equivalent

10  to and shall constitute an appointment by such insurer or

11  person representing or aiding such insurer of the Chief

12  Financial Officer Insurance Commissioner and Treasurer, and

13  his or her successor or successors in office, to be its true

14  and lawful attorney, upon whom may be served all lawful

15  process in any action, suit, or proceeding instituted by or on

16  behalf of an insured or beneficiary, arising out of any such

17  contract of insurance; and any such act shall be signification

18  of the insurer's or person's agreement that such service of

19  process is of the same legal force and validity as personal

20  service of process in this state upon such insurer or person

21  representing or aiding such insurer:

22         (1)  The issuance or delivery of contracts of insurance

23  to residents of this state or to corporations authorized to do

24  business therein;

25         (2)  The solicitation of applications for such

26  contracts;

27         (3)  The collection of premiums, membership fees,

28  assessments, or other considerations for such contracts; or

29         (4)  Any other transaction of insurance.

30         Section 1010.  Subsection (1) of section 626.907,

31  Florida Statutes, is amended to read:

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 1         626.907  Service of process; judgment by default.--

 2         (1)  Service of process upon an insurer or person

 3  representing or aiding such insurer pursuant to s. 626.906

 4  shall be made by delivering to and leaving with the Chief

 5  Financial Officer Insurance Commissioner and Treasurer or some

 6  person in apparent charge of his or her office two copies

 7  thereof. The Chief Financial Officer Insurance Commissioner

 8  and Treasurer shall forthwith mail by registered mail one of

 9  the copies of such process to the defendant at the defendant's

10  last known principal place of business and shall keep a record

11  of all process so served upon him or her.  The service of

12  process is sufficient, provided notice of such service and a

13  copy of the process are sent within 10 days thereafter by

14  registered mail by plaintiff or plaintiff's attorney to the

15  defendant at the defendant's last known principal place of

16  business, and the defendant's receipt, or receipt issued by

17  the post office with which the letter is registered, showing

18  the name of the sender of the letter and the name and address

19  of the person to whom the letter is addressed, and the

20  affidavit of the plaintiff or plaintiff's attorney showing a

21  compliance herewith are filed with the clerk of the court in

22  which the action is pending on or before the date the

23  defendant is required to appear, or within such further time

24  as the court may allow.

25         Section 1011.  Section 626.909, Florida Statutes, is

26  amended to read:

27         626.909  Jurisdiction of office and department; service

28  of process on Secretary of State.--

29         (1)  The Legislature hereby declares that it is a

30  subject of concern that the purpose of the Unauthorized

31  Insurers Process Law as expressed in s. 626.905 may be denied

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 1  by the possibility that the right of service of process

 2  provided for in that law may be restricted only to those

 3  actions, suits, or proceedings brought by insureds or

 4  beneficiaries. It therefore declares that it is the intent of

 5  s. 626.905 that it is the obligation and duty of the state to

 6  protect its residents and also proceed under this law through

 7  the office or department in the courts of this state. It

 8  further declares that it is also the intent of the Legislature

 9  to subject unauthorized insurers and persons representing or

10  aiding such insurers to the jurisdiction of the office or

11  department in proceedings, examinations, or hearings before it

12  as provided for in this code.

13         (2)  In addition to the procedure for service of

14  process on unauthorized insurers or persons representing or

15  aiding such insurers contained in ss. 626.906 and 626.907, the

16  office or department shall have the right to bring any action,

17  suit, or proceeding in the name of the state or conduct any

18  proceeding, examination, or hearing provided for in this code

19  against any unauthorized insurer or person representing or

20  aiding such insurer for violation of any lawful order of the

21  office or department or any provision of this code,

22  specifically including but not limited to the regulation of

23  trade practices provided for in part IX of this chapter, if

24  the insurer or person representing or aiding such insurer

25  transacts insurance in this state as defined in ss. 624.10 and

26  626.906 and the insurer does not transact such business under

27  a subsisting certificate of authority as required by s.

28  624.401.  In the event the transaction of business is done by

29  mail, the venue of the act is at the point where the matter

30  transmitted by mail is delivered and takes effect.

31  

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 1         (3)  In addition to the right of action, suit, or

 2  proceeding authorized by subsection (2), the office or

 3  department shall have the right to bring a civil action in the

 4  name of the state, as parens patriae on behalf of any insured,

 5  beneficiary of any insured, claimant or dependent, or any

 6  other person or class of persons injured as a result of the

 7  transaction of any insurance business as defined in s. 626.906

 8  by any unauthorized insurer, as defined in s. 624.09 who is

 9  also an ineligible insurer as set forth in ss. 626.917 and

10  626.918, or any person who represents or aids any unauthorized

11  insurer, in violation of s. 626.901, to recover actual damages

12  on behalf of individuals who were residents at the time the

13  transaction occurred and the cost of such suit, including a

14  reasonable attorney's fee. The court shall exclude from the

15  amount of monetary relief awarded in such action any amount of

16  monetary relief which duplicates amounts which have been

17  awarded for the same injury.

18         (4)  Transaction of business in this state, as so

19  defined, by any unauthorized insurer or person representing or

20  aiding such insurer shall be deemed consent by the insurer or

21  person representing or aiding such insurer to the jurisdiction

22  of the office or department in proceedings, examinations, and

23  hearings before it as provided for in this code and shall

24  constitute an irrevocable appointment by the insurer or person

25  representing or aiding such insurer of the Secretary of State

26  and his or her successor or successors in office as its true

27  and lawful attorney upon whom may be served all lawful process

28  in any action, suit, or proceeding in any court by the office

29  or department or by the state and upon whom may be served all

30  notices and orders of the office or department arising out of

31  any such transaction of business; and such transaction of

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 1  business shall constitute the agreement of the insurer or

 2  person representing or aiding such insurer that any such

 3  process against it or any such notice or order which is so

 4  served shall be of the same legal force and validity as if

 5  served personally within this state on the insurer or person

 6  representing or aiding such insurer. Service of process shall

 7  be in accordance with and in the same manner as now provided

 8  for service of process upon nonresidents under the provision

 9  of s. 48.161, and service of process shall also be valid if

10  made as provided in s. 626.907(2).

11         (5)  No plaintiff shall be entitled to a judgment by

12  default or a decree pro confesso under this section until the

13  expiration of 30 days after date of the filing of the

14  affidavit of compliance.

15         (6)  Nothing in this section shall limit or abridge the

16  right to serve any process, notice, orders, or demand upon the

17  insurer or person representing or aiding such insurer in any

18  other manner now or hereafter permitted by law.

19         (7)  Nothing in this section shall apply as to surplus

20  lines insurance when written pursuant to the Surplus Lines

21  Law, ss. 626.913-626.937, or as to transactions as to which a

22  certificate of authority is not required of the insurer, as

23  stated in s. 624.402.

24         Section 1012.  Section 626.910, Florida Statutes, is

25  amended to read:

26         626.910  Penalty for violation by unauthorized insurers

27  and persons representing or aiding such insurers.--Any

28  unauthorized insurer or person representing or aiding such

29  insurer transacting insurance in this state and subject to

30  service of process as referred to in s. 626.909 shall forfeit

31  and pay to the state a civil penalty of not more than $1,000

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 1  for each nonwillful violation, or not more than $10,000 for

 2  each willful violation, of any lawful order of the office or

 3  department or any provision of this code.

 4         Section 1013.  Section 626.912, Florida Statutes, is

 5  amended to read:

 6         626.912  Exemptions from ss. 626.904-626.911.--The

 7  provisions of ss. 626.904-626.911 do not apply to any action,

 8  suit, or proceeding against any unauthorized foreign insurer,

 9  alien insurer, or person representing or aiding such an

10  insurer arising out of any contract of insurance:

11         (1)  Covering reinsurance, wet marine and

12  transportation, commercial aircraft, or railway insurance

13  risks;

14         (2)  Against legal liability arising out of the

15  ownership, operation, or maintenance of any property having a

16  permanent situs outside this state;

17         (3)  Against loss of or damage to any property having a

18  permanent situs outside this state; or

19         (4)  Issued under and in accordance with the Surplus

20  Lines Law, when such insurer or person representing or aiding

21  such insurer enters a general appearance or when such contract

22  of insurance contains a provision designating the Chief

23  Financial Officer Insurance Commissioner and Treasurer and his

24  or her successor or successors in office or designating a

25  Florida resident agent to be the true and lawful attorney of

26  such unauthorized insurer or person representing or aiding

27  such insurer upon whom may be served all lawful process in any

28  action, suit, or proceeding instituted by or on behalf of an

29  insured or person representing or aiding such insurer or

30  beneficiary arising out of any such contract of insurance; and

31  service of process effected on such Chief Financial Officer

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 1  Insurance Commissioner and Treasurer, his or her successor or

 2  successors in office, or such resident agent shall be deemed

 3  to confer complete jurisdiction over such unauthorized insurer

 4  or person representing or aiding such insurer in such action.

 5         Section 1014.  Subsection (2) of section 626.914,

 6  Florida Statutes, is amended to read:

 7         626.914  Definitions.--As used in this Surplus Lines

 8  Law, the term:

 9         (2)  "Eligible surplus lines insurer" means an

10  unauthorized insurer which has been made eligible by the

11  office department to issue insurance coverage under this

12  Surplus Lines Law.

13         Section 1015.  Subsections (1) and (2) of section

14  626.916, Florida Statutes, are amended to read:

15         626.916  Eligibility for export.--

16         (1)  No insurance coverage shall be eligible for export

17  unless it meets all of the following conditions:

18         (a)  The full amount of insurance required must not be

19  procurable, after a diligent effort has been made by the

20  producing agent to do so, from among the insurers authorized

21  to transact and actually writing that kind and class of

22  insurance in this state, and the amount of insurance exported

23  shall be only the excess over the amount so procurable from

24  authorized insurers. Surplus lines agents must verify that a

25  diligent effort has been made by requiring a properly

26  documented statement of diligent effort from the retail or

27  producing agent.  However, to be in compliance with the

28  diligent effort requirement, the surplus lines agent's

29  reliance must be reasonable under the particular circumstances

30  surrounding the export of that particular risk. Reasonableness

31  shall be assessed by taking into account factors which

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 1  include, but are not limited to, a regularly conducted program

 2  of verification of the information provided by the retail or

 3  producing agent. Declinations must be documented on a

 4  risk-by-risk basis.  If it is not possible to obtain the full

 5  amount of insurance required by layering the risk, it is

 6  permissible to export the full amount.

 7         (b)  The premium rate at which the coverage is exported

 8  shall not be lower than that rate applicable, if any, in

 9  actual and current use by a majority of the authorized

10  insurers for the same coverage on a similar risk.

11         (c)  The policy or contract form under which the

12  insurance is exported shall not be more favorable to the

13  insured as to the coverage or rate than under similar

14  contracts on file and in actual current use in this state by

15  the majority of authorized insurers actually writing similar

16  coverages on similar risks; except that a coverage may be

17  exported under a unique form of policy designed for use with

18  respect to a particular subject of insurance if a copy of such

19  form is filed with the office department by the surplus lines

20  agent desiring to use the same and is subject to the

21  disapproval of the office department within 10 days of filing

22  such form exclusive of Saturdays, Sundays, and legal holidays

23  if it finds that the use of such special form is not

24  reasonably necessary for the principal purposes of the

25  coverage or that its use would be contrary to the purposes of

26  this Surplus Lines Law with respect to the reasonable

27  protection of authorized insurers from unwarranted competition

28  by unauthorized insurers.

29         (d)  Except as to extended coverage in connection with

30  fire insurance policies and except as to windstorm insurance,

31  the policy or contract under which the insurance is exported

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 1  shall not provide for deductible amounts, in determining the

 2  existence or extent of the insurer's liability, other than

 3  those available under similar policies or contracts in actual

 4  and current use by one or more authorized insurers.

 5         (2)  The commission department may by rule rules and

 6  regulations declare eligible for export generally, and

 7  notwithstanding the provisions of paragraphs (a), (b), (c),

 8  and (d) of subsection (1), any class or classes of insurance

 9  coverage or risk for which it finds, after a hearing, that

10  there is no reasonable or adequate market among authorized

11  insurers. Any such rules and regulations shall continue in

12  effect during the existence of the conditions upon which

13  predicated, but subject to termination by the commission

14  department.

15         Section 1016.  Subsection (1) of section 626.917,

16  Florida Statutes, is amended to read:

17         626.917  Eligibility for export; wet marine and

18  transportation, aviation risks.--

19         (1)  Insurance coverage of wet marine and

20  transportation risks, as defined in this code in s.

21  624.607(2), or aviation risks, including airport and products

22  liability incidental thereto and hangarkeeper's liability, may

23  be exported under the following conditions:

24         (a)  The insurance must be placed only by or through a

25  licensed Florida surplus lines agent; and

26         (b)  The insurer must be one made eligible by the

27  office department specifically for such coverages, based upon

28  information furnished by the insurer and indicating that the

29  insurer is well able to meet its financial obligations.

30         Section 1017.  Section 626.918, Florida Statutes, is

31  amended to read:

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 1         626.918  Eligible surplus lines insurers.--

 2         (1)  No surplus lines agent shall place any coverage

 3  with any unauthorized insurer which is not then an eligible

 4  surplus lines insurer, except as permitted under subsections

 5  (5) and (6).

 6         (2)  No unauthorized insurer shall be or become an

 7  eligible surplus lines insurer unless made eligible by the

 8  office department in accordance with the following conditions:

 9         (a)  Eligibility of the insurer must be requested in

10  writing by the Florida Surplus Lines Service Office;

11         (b)  The insurer must be currently an authorized

12  insurer in the state or country of its domicile as to the kind

13  or kinds of insurance proposed to be so placed and must have

14  been such an insurer for not less than the 3 years next

15  preceding or must be the wholly owned subsidiary of such

16  authorized insurer or must be the wholly owned subsidiary of

17  an already eligible surplus lines insurer as to the kind or

18  kinds of insurance proposed for a period of not less than the

19  3 years next preceding. However, the office department may

20  waive the 3-year requirement if the insurer provides a product

21  or service not readily available to the consumers of this

22  state or has operated successfully for a period of at least 1

23  year next preceding and has capital and surplus of not less

24  than $25 million;

25         (c)  Before granting eligibility, the requesting

26  surplus lines agent or the insurer shall furnish the office

27  department with a duly authenticated copy of its current

28  annual financial statement in the English language and with

29  all monetary values therein expressed in United States

30  dollars, at an exchange rate (in the case of statements

31  originally made in the currencies of other countries)

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 1  then-current and shown in the statement, and with such

 2  additional information relative to the insurer as the office

 3  department may request;

 4         (d)1.  The insurer must have and maintain surplus as to

 5  policyholders of not less than $15 million; in addition, an

 6  alien insurer must also have and maintain in the United States

 7  a trust fund for the protection of all its policyholders in

 8  the United States under terms deemed by the office department

 9  to be reasonably adequate, in an amount not less than $5.4

10  million. Any such surplus as to policyholders or trust fund

11  shall be represented by investments consisting of eligible

12  investments for like funds of like domestic insurers under

13  part II of chapter 625 provided, however, that in the case of

14  an alien insurance company, any such surplus as to

15  policyholders may be represented by investments permitted by

16  the domestic regulator of such alien insurance company if such

17  investments are substantially similar in terms of quality,

18  liquidity, and security to eligible investments for like funds

19  of like domestic insurers under part II of chapter 625;

20         2.  For those surplus lines insurers that were eligible

21  on January 1, 1994, and that maintained their eligibility

22  thereafter, the required surplus as to policyholders shall be:

23         a.  On December 31, 1994, and until December 30, 1995,

24  $2.5 million.

25         b.  On December 31, 1995, and until December 30, 1996,

26  $3.5 million.

27         c.  On December 31, 1996, and until December 30, 1997,

28  $4.5 million.

29         d.  On December 31, 1997, and until December 30, 1998,

30  $5.5 million.

31  

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 1         e.  On December 31, 1998, and until December 30, 1999,

 2  $6.5 million.

 3         f.  On December 31, 1999, and until December 30, 2000,

 4  $8 million.

 5         g.  On December 31, 2000, and until December 30, 2001,

 6  $9.5 million.

 7         h.  On December 31, 2001, and until December 30, 2002,

 8  $11 million.

 9         i.  On December 31, 2002, and until December 30, 2003,

10  $13 million.

11         j.  On December 31, 2003, and thereafter, $15 million.

12         3.  The capital and surplus requirements as set forth

13  in subparagraph 2. do not apply in the case of an insurance

14  exchange created by the laws of individual states, where the

15  exchange maintains capital and surplus pursuant to the

16  requirements of that state, or maintains capital and surplus

17  in an amount not less than $50 million in the aggregate. For

18  an insurance exchange which maintains funds in the amount of

19  at least $12 million for the protection of all insurance

20  exchange policyholders, each individual syndicate shall

21  maintain minimum capital and surplus in an amount not less

22  than $3 million. If the insurance exchange does not maintain

23  funds in the amount of at least $12 million for the protection

24  of all insurance exchange policyholders, each individual

25  syndicate shall meet the minimum capital and surplus

26  requirements set forth in subparagraph 2.;

27         4.  A surplus lines insurer which is a member of an

28  insurance holding company that includes a member which is a

29  Florida domestic insurer as set forth in its holding company

30  registration statement, as set forth in s. 628.801 and rules

31  adopted thereunder, may elect to maintain surplus as to

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 1  policyholders in an amount equal to the requirements of s.

 2  624.408, subject to the requirement that the surplus lines

 3  insurer shall at all times be in compliance with the

 4  requirements of chapter 625.

 5  

 6  The election shall be submitted to the office department and

 7  shall be effective upon the office's department's being

 8  satisfied that the requirements of subparagraph 4. have been

 9  met. The initial date of election shall be the date of office

10  department approval. The election approval application shall

11  be on a form adopted by commission department rule. The office

12  department may approve an election form submitted pursuant to

13  subparagraph 4. only if it was on file with the former

14  Department of Insurance before February 28, 1998;

15         (e)  The insurer must be of good reputation as to the

16  providing of service to its policyholders and the payment of

17  losses and claims;

18         (f)  The insurer must be eligible, as for authority to

19  transact insurance in this state, under s. 624.404(3); and

20         (g)  This subsection does not apply as to unauthorized

21  insurers made eligible under s. 626.917 as to wet marine and

22  aviation risks.

23         (3)  The office department shall from time to time

24  publish a list of all currently eligible surplus lines

25  insurers and shall mail a copy thereof to each licensed

26  surplus lines agent at his or her office of record with the

27  office department.

28         (4)  This section shall not be deemed to cast upon the

29  office department any duty or responsibility to determine the

30  actual financial condition or claims practices of any

31  unauthorized insurer; and the status of eligibility, if

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 1  granted by the office department, shall indicate only that the

 2  insurer appears to be sound financially and to have

 3  satisfactory claims practices and that the office department

 4  has no credible evidence to the contrary.

 5         (5)  When it appears that any particular insurance risk

 6  which is eligible for export, but on which insurance coverage,

 7  in whole or in part, is not procurable from the eligible

 8  surplus lines insurers, after a search of eligible surplus

 9  lines insurers, then the surplus lines agent may file a

10  supplemental signed statement setting forth such facts and

11  advising the office department that such part of the risk as

12  shall be unprocurable, as aforesaid, is being placed with

13  named unauthorized insurers, in the amounts and percentages

14  set forth in the statement.  Such named unauthorized insurer

15  shall, however, before accepting any risk in this state,

16  deposit with the department cash or securities acceptable to

17  the office and department of the market value of $50,000 for

18  each individual risk, contract, or certificate, which deposit

19  shall be held by the department for the benefit of Florida

20  policyholders only; and the surplus lines agent shall procure

21  from such unauthorized insurer and file with the office

22  department a certified copy of its statement of condition as

23  of the close of the last calendar year.  If such statement

24  reveals, including both capital and surplus, net assets of at

25  least that amount required for licensure of a domestic

26  insurer, then the surplus lines agent may proceed to

27  consummate such contract of insurance.  Whenever any insurance

28  risk, or any part thereof, is placed with an unauthorized

29  insurer, as provided herein, the policy, binder, or cover note

30  shall contain a statement signed by the insured and the agent

31  with the following notation: "The insured is aware that

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 1  certain insurers participating in this risk have not been

 2  approved to transact business in Florida nor have they been

 3  declared eligible as surplus lines insurers by the Office of

 4  Insurance Regulation Department of Insurance of Florida.  The

 5  placing of such insurance by a duly licensed surplus lines

 6  agent in Florida shall not be construed as approval of such

 7  insurer by the Office of Insurance Regulation Department of

 8  Insurance of Florida.  Consequently, the insured is aware that

 9  the insured has severely limited the assistance available

10  under the insurance laws of Florida.  The insured is further

11  aware that he or she may be charged a reasonable per policy

12  fee, as provided in s. 626.916(4), Florida Statutes, for each

13  policy certified for export." All other provisions of this

14  code shall apply to such placement the same as if such risks

15  were placed with an eligible surplus lines insurer.

16         (6)  When any particular insurance risk subject to

17  subsection (5) is eligible for placement with an unauthorized

18  insurer and not more than 12.5 percent of the risk is so

19  subject, the office Department of Insurance may, at its

20  discretion, permit the agent to obtain from the insured a

21  signed statement as indicated in subsection (5).  All other

22  provisions of this code apply to such placement the same as if

23  such risks were placed with an eligible surplus lines insurer.

24         Section 1018.  Section 626.919, Florida Statutes, is

25  amended to read:

26         626.919  Withdrawal of eligibility; surplus lines

27  insurer.--

28         (1)  If at any time the office department has reason to

29  believe that any unauthorized insurer then on the list of

30  eligible surplus lines insurers is insolvent or in unsound

31  financial condition, or does not make reasonable prompt

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 1  payment of just losses and claims in this state, or that it is

 2  no longer eligible under the conditions therefor provided in

 3  s. 626.918, it shall withdraw the eligibility of the insurer

 4  to insure surplus lines risks in this state.

 5         (2)  If the office department finds that an insurer

 6  currently eligible as a surplus lines insurer has willfully

 7  violated the laws of this state or a rule of the commission

 8  department, it may, in its discretion, withdraw the

 9  eligibility of the insurer to insure surplus lines risks in

10  this state.

11         (3)  The office department shall promptly mail notice

12  of all such withdrawals of eligibility to each surplus lines

13  agent at his or her address of record with the department.

14         Section 1019.  Subsection (8) of section 626.921,

15  Florida Statutes, is amended to read:

16         626.921  Florida Surplus Lines Service Office.--

17         (8)(a)  Information furnished to the department under

18  s. 626.923 or contained in the records subject to examination

19  by the department under s. 626.930 is confidential and exempt

20  from the provisions of s. 119.07(1) and s. 24(a), Art. I of

21  the State Constitution if the disclosure of the information

22  would reveal information specific to a particular policy or

23  policyholder.  The exemption does not apply to any proceeding

24  instituted by the department or office against an agent or

25  insurer.

26         (b)  Information furnished to the Florida Surplus Lines

27  Service Office under the Surplus Lines Law is confidential and

28  exempt from the provisions of s. 119.07(1) and s. 24(a), Art.

29  I of the State Constitution if the disclosure of the

30  information would reveal information specific to a particular

31  policy or policyholder. This exemption does not prevent the

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 1  disclosure of any information by the Florida Surplus Lines

 2  Service Office to the department, but the exemption applies to

 3  records obtained by the department from the Florida Surplus

 4  Lines Service Office. The exemption does not apply to any

 5  proceeding instituted by the department or office against an

 6  agent or insurer. This paragraph is subject to the Open

 7  Government Sunset Review Act of 1995 in accordance with s.

 8  119.15, and shall stand repealed on October 2, 2006, unless

 9  reviewed and saved from repeal through reenactment by the

10  Legislature.

11         Section 1020.  Subsection (5) of section 626.931,

12  Florida Statutes, is amended to read:

13         626.931  Agent affidavit and insurer reporting

14  requirements.--

15         (5)  The department may Insurance Commissioner shall

16  have the authority to waive the filing requirements described

17  in subsections (3) and (4).

18         Section 1021.  Subsections (2) and (5) of section

19  626.932, Florida Statutes, are amended to read:

20         626.932  Surplus lines tax.--

21         (2)(a)  The surplus lines agent shall make payable to

22  the department of Insurance the tax related to each calendar

23  quarter's business as reported to the Florida Surplus Lines

24  Service Office, and remit the tax to the Florida Surplus Lines

25  Service Office at the same time as provided for the filing of

26  the quarterly affidavit, under s. 626.931. The Florida Surplus

27  Lines Service Office shall forward to the department the taxes

28  and any interest collected pursuant to paragraph (b), within

29  10 days of receipt.

30         (b)  The agent shall pay interest on the amount of any

31  delinquent tax due, at the rate of 9 percent per year,

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 1  compounded annually, beginning the day the amount becomes

 2  delinquent.

 3         (5)  The department shall deposit 55 percent of all

 4  taxes collected under this section to the credit of the

 5  Insurance Commissioner's Regulatory Trust Fund.  Forty-five

 6  percent of all taxes collected under this section shall be

 7  deposited into the General Revenue Fund.

 8         Section 1022.  Section 626.936, Florida Statutes, is

 9  amended to read:

10         626.936  Failure to file reports or pay tax or service

11  fee; administrative penalty.--

12         (1)  Any licensed surplus lines agent who neglects to

13  file a report or an affidavit in the form and within the time

14  required or provided for in the Surplus Lines Law may be fined

15  up to $50 per day for each day the neglect continues,

16  beginning the day after the report or affidavit was due until

17  the date the report or affidavit is received. All sums

18  collected under this section shall be deposited into the

19  Insurance Commissioner's Regulatory Trust Fund.

20         (2)  Any licensed surplus lines agent who neglects to

21  pay the taxes or service fees as required under the Surplus

22  Lines Law and within the time required may be fined up to $500

23  per day for each day the failure to pay continues, beginning

24  the day after the tax or service fees were due. The agent

25  shall pay interest on the amount of any delinquent tax due, at

26  the rate of 9 percent per year, compounded annually, beginning

27  the day the amount becomes delinquent.  The department shall

28  deposit all sums collected under this section into the

29  Insurance Commissioner's Regulatory Trust Fund.

30         Section 1023.  Section 626.9361, Florida Statutes, is

31  amended to read:

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 1         626.9361  Failure to file report; administrative

 2  penalty.--Any eligible surplus lines insurer who fails to file

 3  a report in the form and within the time required or provided

 4  for in the Surplus Lines Law may be fined up to $500 per day

 5  for each day such failure continues, beginning the day after

 6  the report was due, until the date the report is received.

 7  Failure to file a report may also result in withdrawal of

 8  eligibility as a surplus lines insurer in this state. All sums

 9  collected by the department under this section shall be

10  deposited into the Insurance Commissioner's Regulatory Trust

11  Fund.

12         Section 1024.  Subsections (2), (3), and (4) of section

13  626.937, Florida Statutes, are amended to read:

14         626.937  Actions against insurer; service of process.--

15         (2)  The unauthorized insurer accepting the risk or

16  issuing the policy shall be deemed thereby to have authorized

17  service of process against it in the manner and to the effect

18  as provided in this section, and to have appointed the Chief

19  Financial Officer Insurance Commissioner and Treasurer as its

20  agent for service of process issuing upon any cause of action

21  arising in this state under any such policy, contract, or

22  insurance.

23         (3)  Each unauthorized insurer requesting eligibility

24  pursuant to s. 626.918 shall file with the department its

25  appointment of the Chief Financial Officer Insurance

26  Commissioner and Treasurer and his or her successors in

27  office, on a form as furnished by the department, as its

28  attorney to receive service of all legal process issued

29  against it in any civil action or proceeding in this state,

30  and agreeing that process so served shall be valid and binding

31  upon the insurer. The appointment shall be irrevocable, shall

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 1  bind the insurer and any successor in interest as to the

 2  assets or liabilities of the insurer, and shall remain in

 3  effect as long as there is outstanding in this state any

 4  obligation or liability of the insurer resulting from its

 5  insurance transactions therein.

 6         (4)  At the time of such appointment of the Chief

 7  Financial Officer Insurance Commissioner and Treasurer as its

 8  process agent, the insurer shall file with the department

 9  designation of the name and address of the person to whom

10  process against it served upon the Chief Financial Officer

11  Insurance Commissioner and Treasurer is to be forwarded. The

12  insurer may change the designation at any time by a new

13  filing.

14         Section 1025.  Subsections (3) and (7) of section

15  626.938, Florida Statutes, are amended to read:

16         626.938  Report and tax of independently procured

17  coverages.--

18         (3)  For the general support of the government of this

19  state, there is levied upon the obligation, chose in action,

20  or right represented by the premium charged for such insurance

21  a tax at the rate of 5 percent of the gross amount of such

22  premium and a 0.3 percent service fee pursuant to s. 626.9325.

23  The insured shall withhold the amount of the tax and service

24  fee from the amount of premium charged by and otherwise

25  payable to the insurer for such insurance. Within 30 days

26  after the insurance is procured, continued, or renewed, and

27  simultaneously with the filing of the report provided for in

28  subsection (1) with the Florida Surplus Lines Service Office,

29  the insured shall make payable to the department of Insurance

30  the amount of the tax and make payable to the Florida Surplus

31  Lines Service Office the amount of the service fee. The

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 1  insured shall remit the tax and the service fee to the Florida

 2  Surplus Lines Service Office. The Florida Surplus Lines

 3  Service Office shall forward to the department the taxes, and

 4  any interest collected pursuant to subsection (5), within 10

 5  days after receipt.

 6         (7)  The department shall deposit 55 percent of all

 7  taxes and interest collected under this section to the credit

 8  of the Insurance Commissioner's Regulatory Trust Fund.

 9  Forty-five percent of all taxes and interest collected under

10  this section shall be deposited into the General Revenue Fund.

11         Section 1026.  Section 626.9511, Florida Statutes, is

12  amended to read:

13         626.9511  Definitions.--When used in this part:

14         (1)  "Person" means any individual, corporation,

15  association, partnership, reciprocal exchange, interinsurer,

16  Lloyds insurer, fraternal benefit society, or business trust

17  or any entity involved in the business of insurance.

18         (2)  "Department" means the Department of Insurance of

19  this state.

20         (2)(3)  "Insurance policy" or "insurance contract"

21  means a written contract of, or a written agreement for or

22  effecting, insurance, or the certificate thereof, by whatever

23  name called, and includes all clauses, riders, endorsements,

24  and papers which are a part thereof.

25         Section 1027.  Paragraphs (h), (o), (w), and (aa) of

26  subsection (1) of section 626.9541, Florida Statutes, are

27  amended to read:

28         626.9541  Unfair methods of competition and unfair or

29  deceptive acts or practices defined.--

30  

31  

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 1         (1)  UNFAIR METHODS OF COMPETITION AND UNFAIR OR

 2  DECEPTIVE ACTS.--The following are defined as unfair methods

 3  of competition and unfair or deceptive acts or practices:

 4         (h)  Unlawful rebates.--

 5         1.  Except as otherwise expressly provided by law, or

 6  in an applicable filing with the office department, knowingly:

 7         a.  Permitting, or offering to make, or making, any

 8  contract or agreement as to such contract other than as

 9  plainly expressed in the insurance contract issued thereon;

10         b.  Paying, allowing, or giving, or offering to pay,

11  allow, or give, directly or indirectly, as inducement to such

12  insurance contract, any unlawful rebate of premiums payable on

13  the contract, any special favor or advantage in the dividends

14  or other benefits thereon, or any valuable consideration or

15  inducement whatever not specified in the contract;

16         c.  Giving, selling, or purchasing, or offering to

17  give, sell, or purchase, as inducement to such insurance

18  contract or in connection therewith, any stocks, bonds, or

19  other securities of any insurance company or other

20  corporation, association, or partnership, or any dividends or

21  profits accrued thereon, or anything of value whatsoever not

22  specified in the insurance contract.

23         2.  Nothing in paragraph (g) or subparagraph 1. of this

24  paragraph shall be construed as including within the

25  definition of discrimination or unlawful rebates:

26         a.  In the case of any contract of life insurance or

27  life annuity, paying bonuses to all policyholders or otherwise

28  abating their premiums in whole or in part out of surplus

29  accumulated from nonparticipating insurance; provided that any

30  such bonuses or abatement of premiums is fair and equitable to

31  

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 1  all policyholders and for the best interests of the company

 2  and its policyholders.

 3         b.  In the case of life insurance policies issued on

 4  the industrial debit plan, making allowance to policyholders

 5  who have continuously for a specified period made premium

 6  payments directly to an office of the insurer in an amount

 7  which fairly represents the saving in collection expenses.

 8         c.  Readjustment of the rate of premium for a group

 9  insurance policy based on the loss or expense thereunder, at

10  the end of the first or any subsequent policy year of

11  insurance thereunder, which may be made retroactive only for

12  such policy year.

13         d.  Issuance of life insurance policies or annuity

14  contracts at rates less than the usual rates of premiums for

15  such policies or contracts, as group insurance or employee

16  insurance as defined in this code.

17         e.  Issuing life or disability insurance policies on a

18  salary savings, bank draft, preauthorized check, payroll

19  deduction, or other similar plan at a reduced rate reasonably

20  related to the savings made by the use of such plan.

21         3.a.  No title insurer, or any member, employee,

22  attorney, agent, agency, or solicitor thereof, shall pay,

23  allow, or give, or offer to pay, allow, or give, directly or

24  indirectly, as inducement to title insurance, or after such

25  insurance has been effected, any rebate or abatement of the

26  agent's, agency's, or title insurer's share of the premium or

27  any charge for related title services below the cost for

28  providing such services, or provide any special favor or

29  advantage, or any monetary consideration or inducement

30  whatever.  Nothing herein contained shall preclude an

31  abatement in an attorney's fee charged for legal services.

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 1         b.  Nothing in this subparagraph shall be construed as

 2  prohibiting the payment of fees to attorneys at law duly

 3  licensed to practice law in the courts of this state, for

 4  professional services, or as prohibiting the payment of earned

 5  portions of the premium to duly appointed agents or agencies

 6  who actually perform services for the title insurer.

 7         c.  No insured named in a policy, or any other person

 8  directly or indirectly connected with the transaction

 9  involving the issuance of such policy, including, but not

10  limited to, any mortgage broker, real estate broker, builder,

11  or attorney, any employee, agent, agency, or representative

12  thereof, or any other person whatsoever, shall knowingly

13  receive or accept, directly or indirectly, any rebate or

14  abatement of said charge, or any monetary consideration or

15  inducement, other than as set forth in sub-subparagraph b.

16         (o)  Illegal dealings in premiums; excess or reduced

17  charges for insurance.--

18         1.  Knowingly collecting any sum as a premium or charge

19  for insurance, which is not then provided, or is not in due

20  course to be provided, subject to acceptance of the risk by

21  the insurer, by an insurance policy issued by an insurer as

22  permitted by this code.

23         2.  Knowingly collecting as a premium or charge for

24  insurance any sum in excess of or less than the premium or

25  charge applicable to such insurance, in accordance with the

26  applicable classifications and rates as filed with and

27  approved by the office department, and as specified in the

28  policy; or, in cases when classifications, premiums, or rates

29  are not required by this code to be so filed and approved,

30  premiums and charges in excess of or less than those specified

31  in the policy and as fixed by the insurer.  This provision

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 1  shall not be deemed to prohibit the charging and collection,

 2  by surplus lines agents licensed under part VIII of this

 3  chapter, of the amount of applicable state and federal taxes,

 4  or fees as authorized by s. 626.916(4), in addition to the

 5  premium required by the insurer or the charging and

 6  collection, by licensed agents, of the exact amount of any

 7  discount or other such fee charged by a credit card facility

 8  in connection with the use of a credit card, as authorized by

 9  subparagraph (q)3., in addition to the premium required by the

10  insurer.  This subparagraph shall not be construed to prohibit

11  collection of a premium for a universal life or a variable or

12  indeterminate value insurance policy made in accordance with

13  the terms of the contract.

14         3.a.  Imposing or requesting an additional premium for

15  a policy of motor vehicle liability, personal injury

16  protection, medical payment, or collision insurance or any

17  combination thereof or refusing to renew the policy solely

18  because the insured was involved in a motor vehicle accident

19  unless the insurer's file contains information from which the

20  insurer in good faith determines that the insured was

21  substantially at fault in the accident.

22         b.  An insurer which imposes and collects such a

23  surcharge or which refuses to renew such policy shall, in

24  conjunction with the notice of premium due or notice of

25  nonrenewal, notify the named insured that he or she is

26  entitled to reimbursement of such amount or renewal of the

27  policy under the conditions listed below and will subsequently

28  reimburse him or her or renew the policy, if the named insured

29  demonstrates that the operator involved in the accident was:

30         (I)  Lawfully parked;

31  

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 1         (II)  Reimbursed by, or on behalf of, a person

 2  responsible for the accident or has a judgment against such

 3  person;

 4         (III)  Struck in the rear by another vehicle headed in

 5  the same direction and was not convicted of a moving traffic

 6  violation in connection with the accident;

 7         (IV)  Hit by a "hit-and-run" driver, if the accident

 8  was reported to the proper authorities within 24 hours after

 9  discovering the accident;

10         (V)  Not convicted of a moving traffic violation in

11  connection with the accident, but the operator of the other

12  automobile involved in such accident was convicted of a moving

13  traffic violation;

14         (VI)  Finally adjudicated not to be liable by a court

15  of competent jurisdiction;

16         (VII)  In receipt of a traffic citation which was

17  dismissed or nolle prossed; or

18         (VIII)  Not at fault as evidenced by a written

19  statement from the insured establishing facts demonstrating

20  lack of fault which are not rebutted by information in the

21  insurer's file from which the insurer in good faith determines

22  that the insured was substantially at fault.

23         c.  In addition to the other provisions of this

24  subparagraph, an insurer may not fail to renew a policy if the

25  insured has had only one accident in which he or she was at

26  fault within the current 3-year period. However, an insurer

27  may nonrenew a policy for reasons other than accidents in

28  accordance with s. 627.728.  This subparagraph does not

29  prohibit nonrenewal of a policy under which the insured has

30  had three or more accidents, regardless of fault, during the

31  most recent 3-year period.

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 1         4.  Imposing or requesting an additional premium for,

 2  or refusing to renew, a policy for motor vehicle insurance

 3  solely because the insured committed a noncriminal traffic

 4  infraction as described in s. 318.14 unless the infraction is:

 5         a.  A second infraction committed within an 18-month

 6  period, or a third or subsequent infraction committed within a

 7  36-month period.

 8         b.  A violation of s. 316.183, when such violation is a

 9  result of exceeding the lawful speed limit by more than 15

10  miles per hour.

11         5.  Upon the request of the insured, the insurer and

12  licensed agent shall supply to the insured the complete proof

13  of fault or other criteria which justifies the additional

14  charge or cancellation.

15         6.  No insurer shall impose or request an additional

16  premium for motor vehicle insurance, cancel or refuse to issue

17  a policy, or refuse to renew a policy because the insured or

18  the applicant is a handicapped or physically disabled person,

19  so long as such handicap or physical disability does not

20  substantially impair such person's mechanically assisted

21  driving ability.

22         7.  No insurer may cancel or otherwise terminate any

23  insurance contract or coverage, or require execution of a

24  consent to rate endorsement, during the stated policy term for

25  the purpose of offering to issue, or issuing, a similar or

26  identical contract or coverage to the same insured with the

27  same exposure at a higher premium rate or continuing an

28  existing contract or coverage with the same exposure at an

29  increased premium.

30         8.  No insurer may issue a nonrenewal notice on any

31  insurance contract or coverage, or require execution of a

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 1  consent to rate endorsement, for the purpose of offering to

 2  issue, or issuing, a similar or identical contract or coverage

 3  to the same insured at a higher premium rate or continuing an

 4  existing contract or coverage at an increased premium without

 5  meeting any applicable notice requirements.

 6         9.  No insurer shall, with respect to premiums charged

 7  for motor vehicle insurance, unfairly discriminate solely on

 8  the basis of age, sex, marital status, or scholastic

 9  achievement.

10         10.  Imposing or requesting an additional premium for

11  motor vehicle comprehensive or uninsured motorist coverage

12  solely because the insured was involved in a motor vehicle

13  accident or was convicted of a moving traffic violation.

14         11.  No insurer shall cancel or issue a nonrenewal

15  notice on any insurance policy or contract without complying

16  with any applicable cancellation or nonrenewal provision

17  required under the Florida Insurance Code.

18         12.  No insurer shall impose or request an additional

19  premium, cancel a policy, or issue a nonrenewal notice on any

20  insurance policy or contract because of any traffic infraction

21  when adjudication has been withheld and no points have been

22  assessed pursuant to s. 318.14(9) and (10).  However, this

23  subparagraph does not apply to traffic infractions involving

24  accidents in which the insurer has incurred a loss due to the

25  fault of the insured.

26         (w)  Soliciting or accepting new or renewal insurance

27  risks by insolvent or impaired insurer prohibited; penalty.--

28         1.  Whether or not delinquency proceedings as to the

29  insurer have been or are to be initiated, but while such

30  insolvency or impairment exists, no director or officer of an

31  insurer, except with the written permission of the office

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 1  Department of Insurance, shall authorize or permit the insurer

 2  to solicit or accept new or renewal insurance risks in this

 3  state after such director or officer knew, or reasonably

 4  should have known, that the insurer was insolvent or impaired.

 5  "Impaired" includes impairment of capital or surplus, as

 6  defined in s. 631.011(12) and (13).

 7         2.  Any such director or officer, upon conviction of a

 8  violation of this paragraph, is guilty of a felony of the

 9  third degree, punishable as provided in s. 775.082, s.

10  775.083, or s. 775.084.

11         (aa)  Churning.--

12         1.  Churning is the practice whereby policy values in

13  an existing life insurance policy or annuity contract,

14  including, but not limited to, cash, loan values, or dividend

15  values, and in any riders to that policy or contract, are

16  utilized to purchase another insurance policy or annuity

17  contract with that same insurer for the purpose of earning

18  additional premiums, fees, commissions, or other compensation:

19         a.  Without an objectively reasonable basis for

20  believing that the replacement or extraction will result in an

21  actual and demonstrable benefit to the policyholder;

22         b.  In a fashion that is fraudulent, deceptive, or

23  otherwise misleading or that involves a deceptive omission;

24         c.  Effective October 1, 1995, When the applicant is

25  not informed that the policy values including cash values,

26  dividends, and other assets of the existing policy or contract

27  will be reduced, forfeited, or utilized in the purchase of the

28  replacing or additional policy or contract, if this is the

29  case; or

30         d.  Effective October 1, 1995, Without informing the

31  applicant that the replacing or additional policy or contract

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 1  will not be a paid-up policy or that additional premiums will

 2  be due, if this is the case.

 3  

 4  Churning by an insurer or an agent is an unfair method of

 5  competition and an unfair or deceptive act or practice.

 6         2.  Effective October 1, 1995, Each insurer shall

 7  comply with sub-subparagraphs 1.c. and 1.d. by disclosing to

 8  the applicant at the time of the offer on a form designed and

 9  adopted by rule by the commission department if, how, and the

10  extent to which the policy or contract values (including cash

11  value, dividends, and other assets) of a previously issued

12  policy or contract will be used to purchase a replacing or

13  additional policy or contract with the same insurer.  The form

14  shall include disclosure of the premium, the death benefit of

15  the proposed replacing or additional policy, and the date when

16  the policy values of the existing policy or contract will be

17  insufficient to pay the premiums of the replacing or

18  additional policy or contract.

19         3.  Effective October 1, 1995, Each insurer shall adopt

20  written procedures to reasonably avoid churning of policies or

21  contracts that it has issued, and failure to adopt written

22  procedures sufficient to reasonably avoid churning shall be an

23  unfair method of competition and an unfair or deceptive act or

24  practice.

25         Section 1028.  Subsections (3), (5), (7), (8), (10),

26  and (11) of section 626.9543, Florida Statutes, are amended to

27  read:

28         626.9543  Holocaust victims.--

29         (3)  DEFINITIONS.--For the purpose of this section, the

30  term:

31         (a)  "Department" means the Department of Insurance.

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 1         (a)(b)  "Holocaust victim" means any person who lost

 2  his or her life or property as a result of discriminatory

 3  laws, policies, or actions targeted against discrete groups of

 4  persons between 1920 and 1945, inclusive, in Nazi Germany,

 5  areas occupied by Nazi Germany, or countries allied with Nazi

 6  Germany.

 7         (b)(c)  "Insurance policy" means, but is not limited

 8  to, life insurance, property insurance, or education policies.

 9         (c)(d)  "Legal relationship" means any parent,

10  subsidiary, or affiliated company with an insurer doing

11  business in this state.

12         (d)(e)  "Proceeds" means the face or other payout value

13  of policies and annuities plus reasonable interest to date of

14  payments without diminution for wartime or immediate postwar

15  currency devaluation.

16         (5)  PROOF OF A CLAIM.--Any insurer doing business in

17  this state, in receipt of a claim from a Holocaust victim or

18  from a beneficiary, descendant, or heir of a Holocaust victim,

19  shall:

20         (a)  Diligently and expeditiously investigate all such

21  claims.

22         (b)  Allow such claimants to meet a reasonable, not

23  unduly restrictive, standard of proof to substantiate a claim,

24  pursuant to standards established by rule of the commission

25  department.

26         (c)  Permit claims irrespective of any statute of

27  limitations or notice requirements imposed by any insurance

28  policy issued, provided the claim is submitted within 10 years

29  after the effective date of this section.

30         (7)  REPORTS FROM INSURERS.--Any insurer doing business

31  in this state shall have an affirmative duty to ascertain to

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 1  the extent possible and report to the office department within

 2  90 days after the effective date of this section and annually

 3  thereafter all efforts made and results of such efforts to

 4  ascertain:

 5         (a)  Any legal relationship with an international

 6  insurer that issued an insurance policy to a Holocaust victim

 7  between 1920 and 1945, inclusive.

 8         (b)  The number and total value of such policies.

 9         (c)  Any claim filed by a Holocaust victim, his or her

10  beneficiary, heir, or descendant that has been paid, denied

11  payment, or is pending.

12         (d)  Attempts made by the insurer to locate the

13  beneficiaries of any such policies for which no claim of

14  benefits has been made.

15         (e)  An explanation of any denial or pending payment of

16  a claim to a Holocaust victim, his or her beneficiary, heir,

17  or descendant.

18         (8)  REPORTS TO THE LEGISLATURE.--The office and

19  department shall jointly report to the Legislature 1 year

20  after the effective date of this section and annually

21  thereafter:

22         (a)  The number of insurers doing business in this

23  state which have a legal relationship with an international

24  insurer that could have issued a policy to a Holocaust victim

25  between 1920 and 1945, inclusive.

26         (b)  A list of all claims paid, denied, or pending to a

27  Holocaust victim, his or her beneficiary, heir, or descendant.

28         (c)  A summary of the length of time for the processing

29  and disposition of a claim by the insurer.

30         (10)  PRIVATE RIGHT OF ACTION.--An action to recover

31  damages caused by a violation of this section must be

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 1  commenced within 5 years after the cause of action has

 2  accrued.  Any person who shall sustain damages by the reason

 3  of a violation of this section shall recover threefold the

 4  actual damages sustained thereby, as well as costs not

 5  exceeding $50,000, and reasonable attorneys' fees.  At or

 6  before the commencement of any civil action by a party, notice

 7  thereof shall be served upon the office department.

 8         (11)  RULES.--The commission department, by rule, shall

 9  provide for the implementation of the provisions of this

10  section by establishing procedures and related forms for

11  facilitating, monitoring, and verifying compliance with this

12  section and for the establishment of a restitution program for

13  Holocaust victims, survivors, and their heirs and

14  beneficiaries.

15         Section 1029.  Section 626.9545, Florida Statutes, is

16  amended to read:

17         626.9545  Improper charge identification incentive

18  program.--No section or provision of the Florida Insurance

19  Code shall be construed as prohibiting an insurer from

20  establishing a financial incentive program for remunerating a

21  policyholder or an insured person with a selected percentage

22  or stated portion of any health care charge identified by the

23  policyholder or the insured person as an error or overcharge

24  if the health care charge is recovered by the insurer.  The

25  financial incentive program shall be written and shall be

26  available for inspection by the office department.

27         Section 1030.  Subsection (5) of section 626.9551,

28  Florida Statutes, is amended to read:

29         626.9551  Favored agent or insurer; coercion of

30  debtors.--

31  

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 1         (5)  The department or office may investigate the

 2  affairs of any person to whom this section applies to

 3  determine whether such person has violated this section.  If a

 4  violation of this section is found to have been committed

 5  knowingly, the person in violation shall be subject to the

 6  same procedures and penalties as provided in ss. 626.9571,

 7  626.9581, 626.9591, and 626.9601.

 8         Section 1031.  Section 626.9561, Florida Statutes, is

 9  amended to read:

10         626.9561  Power of department and office.--The

11  department and office shall each have power within its

12  respective regulatory jurisdiction to examine and investigate

13  the affairs of every person involved in the business of

14  insurance in this state in order to determine whether such

15  person has been or is engaged in any unfair method of

16  competition or in any unfair or deceptive act or practice

17  prohibited by s. 626.9521, and shall each have the powers and

18  duties specified in ss. 626.9571-626.9601 in connection

19  therewith.

20         Section 1032.  Section 626.9571, Florida Statutes, is

21  amended to read:

22         626.9571  Defined practices; hearings, witnesses,

23  appearances, production of books and service of process.--

24         (1)  Whenever the department or office has reason to

25  believe that any person has engaged, or is engaging, in this

26  state in any unfair method of competition or any unfair or

27  deceptive act or practice as defined in s. 626.9541 or s.

28  626.9551 or is engaging in the business of insurance without

29  being properly licensed as required by this code and that a

30  proceeding by it in respect thereto would be to the interest

31  

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 1  of the public, it shall conduct or cause to have conducted a

 2  hearing in accordance with chapter 120.

 3         (2)  The department or office, a duly empowered hearing

 4  officer, or an administrative law judge shall, during the

 5  conduct of such hearing, have those powers enumerated in s.

 6  120.569; however, the penalties for failure to comply with a

 7  subpoena or with an order directing discovery shall be limited

 8  to a fine not to exceed $1,000 per violation.

 9         (3)  Statements of charges, notices, and orders under

10  this act may be served by anyone duly authorized by the

11  department or office, either in the manner provided by law for

12  service of process in civil actions or by certifying and

13  mailing a copy thereof to the person affected by such

14  statement, notice, order, or other process at his or her or

15  its residence or principal office or place of business. The

16  verified return by the person so serving such statement,

17  notice, order, or other process, setting forth the manner of

18  the service, shall be proof of the same, and the return

19  postcard receipt for such statement, notice, order, or other

20  process, certified and mailed as aforesaid, shall be proof of

21  service of the same.

22         Section 1033.  Section 626.9581, Florida Statutes, is

23  amended to read:

24         626.9581  Cease and desist and penalty orders.--After

25  the hearing provided in s. 626.9571, the department or office

26  shall enter a final order in accordance with s. 120.569. If it

27  is determined that the person charged has engaged in an unfair

28  or deceptive act or practice or the unlawful transaction of

29  insurance, the department or office shall also issue an order

30  requiring the violator to cease and desist from engaging in

31  such method of competition, act, or practice or the unlawful

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 1  transaction of insurance. Further, if the act or practice is a

 2  violation of s. 626.9541 or s. 626.9551, the department or

 3  office may, at its discretion, order any one or more of the

 4  following:

 5         (1)  Suspension or revocation of the person's

 6  certificate of authority, license, or eligibility for any

 7  certificate of authority or license, if he or she knew, or

 8  reasonably should have known, he or she was in violation of

 9  this act.

10         (2)  Such other relief as may be provided in the

11  insurance code.

12         Section 1034.  Section 626.9591, Florida Statutes, is

13  amended to read:

14         626.9591  Appeals from the department or office.--Any

15  person subject to an order of the department or office under

16  s. 626.9581 or s. 626.9601 may obtain a review of such order

17  by filing an appeal therefrom in accordance with the

18  provisions and procedures for appeal from the orders of the

19  department or office in general under s. 120.68.

20         Section 1035.  Section 626.9601, Florida Statutes, is

21  amended to read:

22         626.9601  Penalty for violation of cease and desist

23  orders.--Any person who violates a cease and desist order of

24  the department or office under s. 626.9581 while such order is

25  in effect, after notice and hearing as provided in s.

26  626.9571, shall be subject, at the discretion of the

27  department or office, to any one or more of the following:

28         (1)  A monetary penalty of not more than $50,000 as to

29  all matters determined in such hearing.

30  

31  

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 1         (2)  Suspension or revocation of such person's

 2  certificate of authority, license, or eligibility to hold such

 3  certificate of authority or license.

 4         (3)  Such other relief as may be provided in the

 5  insurance code.

 6         Section 1036.  Section 626.9611, Florida Statutes, is

 7  amended to read:

 8         626.9611  Rules.--The department or commission may, in

 9  accordance with chapter 120, adopt promulgate reasonable rules

10  as are necessary or proper to identify specific methods of

11  competition or acts or practices which are prohibited by s.

12  626.9541 or s. 626.9551, but the rules shall not enlarge upon

13  or extend the provisions of ss. 626.9541 and 626.9551.

14         Section 1037.  Section 626.9621, Florida Statutes, is

15  amended to read:

16         626.9621  Provisions of part additional to existing

17  law.--The powers vested in the department, commission, and

18  office by this part shall be additional to any other powers to

19  enforce any penalties, fines, or forfeitures authorized by

20  law.

21         Section 1038.  Section 626.9631, Florida Statutes, is

22  amended to read:

23         626.9631  Civil liability.--The provisions of this part

24  are cumulative to rights under the general civil and common

25  law, and no action of the department, commission, or office

26  shall abrogate such rights to damages or other relief in any

27  court.

28         Section 1039.  Subsection (1) of section 626.9641,

29  Florida Statutes, is amended to read:

30         626.9641  Policyholders, bill of rights.--

31  

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 1         (1)  The principles expressed in the following

 2  statements shall serve as standards to be followed by the

 3  department, commission, and office in exercising their its

 4  powers and duties, in exercising administrative discretion, in

 5  dispensing administrative interpretations of the law, and in

 6  adopting promulgating rules:

 7         (a)  Policyholders shall have the right to competitive

 8  pricing practices and marketing methods that enable them to

 9  determine the best value among comparable policies.

10         (b)  Policyholders shall have the right to obtain

11  comprehensive coverage.

12         (c)  Policyholders shall have the right to insurance

13  advertising and other selling approaches that provide accurate

14  and balanced information on the benefits and limitations of a

15  policy.

16         (d)  Policyholders shall have a right to an insurance

17  company that is financially stable.

18         (e)  Policyholders shall have the right to be serviced

19  by a competent, honest insurance agent or broker.

20         (f)  Policyholders shall have the right to a readable

21  policy.

22         (g)  Policyholders shall have the right to an insurance

23  company that provides an economic delivery of coverage and

24  that tries to prevent losses.

25         (h)  Policyholders shall have the right to a balanced

26  and positive regulation by the department, commission, and

27  office.

28         Section 1040.  Section 626.9651, Florida Statutes, is

29  amended to read:

30         626.9651  Privacy.--The department and commission shall

31  each adopt rules consistent with other provisions of the

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 1  Florida Insurance Code to govern the use of a consumer's

 2  nonpublic personal financial and health information. These

 3  rules must be based on, consistent with, and not more

 4  restrictive than the Privacy of Consumer Financial and Health

 5  Information Regulation, adopted September 26, 2000, by the

 6  National Association of Insurance Commissioners; however, the

 7  rules must permit the use and disclosure of nonpublic personal

 8  health information for scientific, medical, or public policy

 9  research, in accordance with federal law. In addition, these

10  rules must be consistent with, and not more restrictive than,

11  the standards contained in Title V of the Gramm-Leach-Bliley

12  Act of 1999, Pub. L. No. 106-102. If the office department

13  determines that a health insurer or health maintenance

14  organization is in compliance with, or is actively undertaking

15  compliance with, the consumer privacy protection rules adopted

16  by the United States Department of Health and Human Services,

17  in conformance with the Health Insurance Portability and

18  Affordability Act, that health insurer or health maintenance

19  organization is in compliance with this section.

20         Section 1041.  Paragraph (e) of subsection (4) and

21  subsections (5) and (9) of section 626.989, Florida Statutes,

22  are amended to read:

23         626.989  Investigation by department or Division of

24  Insurance Fraud; compliance; immunity; confidential

25  information; reports to division; division investigator's

26  power of arrest.--

27         (4)

28         (e)  The Chief Financial Officer Insurance Commissioner

29  and any employee or agent of the department, commission,

30  office, or division, when acting without malice and in the

31  absence of fraud or bad faith, is not subject to civil

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 1  liability for libel, slander, or any other relevant tort, and

 2  no civil cause of action of any nature exists against such

 3  person by virtue of the execution of official activities or

 4  duties of the department, commission, or office under this

 5  section or by virtue of the publication of any report or

 6  bulletin related to the official activities or duties of the

 7  department, or division, commission, or office under this

 8  section.

 9         (5)  The office's and the department's papers,

10  documents, reports, or evidence relative to the subject of an

11  investigation under this section are confidential and exempt

12  from the provisions of s. 119.07(1) until such investigation

13  is completed or ceases to be active. For purposes of this

14  subsection, an investigation is considered "active" while the

15  investigation is being conducted by the office or department

16  with a reasonable, good faith belief that it could lead to the

17  filing of administrative, civil, or criminal proceedings. An

18  investigation does not cease to be active if the office or

19  department is proceeding with reasonable dispatch and has a

20  good faith belief that action could be initiated by the office

21  or department or other administrative or law enforcement

22  agency. After an investigation is completed or ceases to be

23  active, portions of records relating to the investigation

24  shall remain exempt from the provisions of s. 119.07(1) if

25  disclosure would:

26         (a)  Jeopardize the integrity of another active

27  investigation;

28         (b)  Impair the safety and soundness of an insurer;

29         (c)  Reveal personal financial information;

30         (d)  Reveal the identity of a confidential source;

31  

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 1         (e)  Defame or cause unwarranted damage to the good

 2  name or reputation of an individual or jeopardize the safety

 3  of an individual; or

 4         (f)  Reveal investigative techniques or procedures.

 5  Further, such papers, documents, reports, or evidence relative

 6  to the subject of an investigation under this section shall

 7  not be subject to discovery until the investigation is

 8  completed or ceases to be active. Office, department, or

 9  division investigators shall not be subject to subpoena in

10  civil actions by any court of this state to testify concerning

11  any matter of which they have knowledge pursuant to a pending

12  insurance fraud investigation by the division.

13         (9)  In recognition of the complementary roles of

14  investigating instances of workers' compensation fraud and

15  enforcing compliance with the workers' compensation coverage

16  requirements under chapter 440, the department of Insurance is

17  directed to prepare and submit a joint performance report to

18  the President of the Senate and the Speaker of the House of

19  Representatives by November 1, 2003, and then by November 1

20  every 3 years thereafter, describing the results obtained in

21  achieving compliance with the workers' compensation coverage

22  requirements and reducing the incidence of workers'

23  compensation fraud.

24         Section 1042.  Subsection (1) of section 626.9892,

25  Florida Statutes, is amended to read:

26         626.9892  Anti-Fraud Reward Program; reporting of

27  insurance fraud.--

28         (1)  The Anti-Fraud Reward Program is hereby

29  established within the department, to be funded from the

30  Insurance Commissioner's Regulatory Trust Fund.

31  

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 1         Section 1043.  Paragraph (k) of subsection (5) of

 2  section 626.99, Florida Statutes, is amended to read:

 3         626.99  Life insurance solicitation.--

 4         (5)  GENERAL RULES RELATING TO SOLICITATION.--

 5         (k)  If an appropriately licensed agent proposes to

 6  replace a life insurance policy or an in-force annuity with a

 7  registered securities product, preapplication notice

 8  requirements to the department shall not apply.

 9         Section 1044.  Section 626.9911, Florida Statutes, is

10  amended to read:

11         626.9911  Definitions.--As used in this act, the term:

12         (1)  "Department" means the Department of Insurance.

13         (1)(2)  "Independent third-party trustee or escrow

14  agent" means an attorney, certified public accountant,

15  financial institution, or other person providing escrow

16  services under the authority of a regulatory body. The term

17  does not include any person associated, affiliated, or under

18  common control with a viatical settlement provider or viatical

19  settlement broker.

20         (2)(3)  "Person" has the meaning specified in s. 1.01.

21         (3)(4)  "Viatical settlement broker" means a person

22  who, on behalf of a viator and for a fee, commission, or other

23  valuable consideration, offers or attempts to negotiate

24  viatical settlement contracts between a viator resident in

25  this state and one or more viatical settlement providers.

26  Notwithstanding the manner in which the viatical settlement

27  broker is compensated, a viatical settlement broker is deemed

28  to represent only the viator and owes a fiduciary duty to the

29  viator to act according to the viator's instructions and in

30  the best interest of the viator.  The term does not include an

31  attorney, licensed Certified Public Accountant, or investment

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 1  adviser lawfully registered with the department of Banking and

 2  Finance under chapter 517, who is retained to represent the

 3  viator and whose compensation is paid directly by or at the

 4  direction and on behalf of the viator.

 5         (4)(5)  "Viatical settlement contract" means a written

 6  agreement entered into between a viatical settlement provider,

 7  or its related provider trust, and a viator. The viatical

 8  settlement contract includes an agreement to transfer

 9  ownership or change the beneficiary designation of a life

10  insurance policy at a later date, regardless of the date that

11  compensation is paid to the viator.  The agreement must

12  establish the terms under which the viatical settlement

13  provider will pay compensation or anything of value, which

14  compensation or value is less than the expected death benefit

15  of the insurance policy or certificate, in return for the

16  viator's assignment, transfer, sale, devise, or bequest of the

17  death benefit or ownership of all or a portion of the

18  insurance policy or certificate of insurance to the viatical

19  settlement provider.  A viatical settlement contract also

20  includes a contract for a loan or other financial transaction

21  secured primarily by an individual or group life insurance

22  policy, other than a loan by a life insurance company pursuant

23  to the terms of the life insurance contract, or a loan secured

24  by the cash value of a policy.

25         (5)(6)  "Viatical settlement provider" means a person

26  who, in this state, from this state, or with a resident of

27  this state, effectuates a viatical settlement contract.  The

28  term does not include:

29         (a)  Any bank, savings bank, savings and loan

30  association, credit union, or other licensed lending

31  

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 1  institution that takes an assignment of a life insurance

 2  policy as collateral for a loan.;

 3         (b)  A life and health insurer that has lawfully issued

 4  a life insurance policy that provides accelerated benefits to

 5  terminally ill policyholders or certificateholders.; or

 6         (c)  Any natural person who enters into no more than

 7  one viatical settlement contract with a viator in 1 calendar

 8  year, unless such natural person has previously been licensed

 9  under this act or is currently licensed under this act.

10         (d)  A trust that meets the definition of a "related

11  provider trust."

12         (e)  A viator in this state.

13         (f)  A viatical settlement purchaser.

14         (g)  A financing entity.

15         (6)(7)  "Viator" means the owner of a life insurance

16  policy or a certificateholder under a group policy who enters

17  or seeks to enter into a viatical settlement contract. This

18  term does not include a viatical settlement purchaser or a

19  viatical settlement provider or any person acquiring a policy

20  or interest in a policy from a viatical settlement provider,

21  nor does it include an independent third-party trustee or

22  escrow agent.

23         (7)(8)  "Related provider trust" means a titling trust

24  or other trust established by a licensed viatical settlement

25  provider or financing entity for the sole purpose of holding

26  the ownership or beneficial interest in purchased policies in

27  connection with a financing transaction. The trust must have a

28  written agreement with a licensed viatical settlement provider

29  or financing entity under which the licensed viatical

30  settlement provider or financing entity is responsible for

31  insuring compliance with all statutory and regulatory

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 1  requirements and under which the trust agrees to make all

 2  records and files relating to viatical settlement transactions

 3  available to the office department as if those records and

 4  files were maintained directly by the licensed viatical

 5  settlement provider. This term does not include an independent

 6  third-party trustee or escrow agent or a trust that does not

 7  enter into agreements with a viator. A related provider trust

 8  shall be subject to all provisions of this act that apply to

 9  the viatical settlement provider who established the related

10  provider trust, except s. 626.9912, which shall not be

11  applicable. A viatical settlement provider may establish no

12  more than one related provider trust, and the sole trustee of

13  such related provider trust shall be the viatical settlement

14  provider licensed under s. 626.9912. The name of the licensed

15  viatical settlement provider shall be included within the name

16  of the related provider trust.

17         (8)(9)  "Viatical settlement purchase agreement" means

18  a contract or agreement, entered into by a viatical settlement

19  purchaser, to which the viator is not a party, to purchase a

20  life insurance policy or an interest in a life insurance

21  policy, which is entered into for the purpose of deriving an

22  economic benefit. The term also includes purchases made by

23  viatical settlement purchasers from any person other than the

24  provider who effectuated the viatical settlement contract.

25         (9)(10)  "Viatical settlement purchaser" means a person

26  who gives a sum of money as consideration for a life insurance

27  policy or an equitable or legal interest in the death benefits

28  of a life insurance policy that has been or will be the

29  subject of a viatical settlement contract, for the purpose of

30  deriving an economic benefit, including purchases made from

31  any person other than the provider who effectuated the

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 1  viatical settlement contract or an entity affiliated with the

 2  provider. The term does not include a licensee under this

 3  part, an accredited investor as defined in Rule 501,

 4  Regulation D of the Securities Act Rules, or a qualified

 5  institutional buyer as defined by Rule 144(a) of the Federal

 6  Securities Act, a special purpose entity, a financing entity,

 7  or a contingency insurer. The above references to Rule 501,

 8  Regulation D and Rule 144(a) of the Federal Securities Act are

 9  used strictly for defining purposes and shall not be

10  interpreted in any other manner. Any person who claims to be

11  an accredited investor shall sign an affidavit stating that he

12  or she is an accredited investor, the basis of that claim, and

13  that he or she understands that as an accredited investor he

14  or she will not be entitled to certain protections of the

15  Viatical Settlement Act. This affidavit must be kept with

16  other documents required to be maintained by this act.

17         (10)(11)  "Viatical settlement sales agent" means a

18  person other than a licensed viatical settlement provider who

19  arranges the purchase through a viatical settlement purchase

20  agreement of a life insurance policy or an interest in a life

21  insurance policy.

22         (11)(12)  "Viaticated policy" means a life insurance

23  policy, or a certificate under a group policy, which is the

24  subject of a viatical settlement contract.

25         (12)(13)  "Related form" means any form, created by or

26  on behalf of a licensee, which a viator or viatical settlement

27  purchaser is required to sign or initial. The forms include,

28  but are not limited to, a power of attorney, a release of

29  medical information form, a suitability questionnaire, a

30  disclosure document, or any addendum, schedule, or amendment

31  to a viatical settlement contract or viatical settlement

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 1  purchase agreement considered necessary by a provider to

 2  effectuate a viatical settlement transaction.

 3         (13)(14)  "Special purpose entity" means an entity

 4  established by a licensed viatical settlement provider or by a

 5  financing entity, which may be a corporation, partnership,

 6  trust, limited liability company, or other similar entity

 7  formed solely to provide, either directly or indirectly,

 8  access to institutional capital markets to a viatical

 9  settlement provider or financing entity. A special purpose

10  entity shall not enter into a viatical settlement contract or

11  a viatical settlement purchase agreement.

12         (14)(15)  "Financing entity" means an underwriter,

13  placement agent, lender, purchaser of securities, or purchaser

14  of a policy or certificate from a viatical settlement

15  provider, credit enhancer, or any entity that has direct

16  ownership in a policy or certificate that is the subject of a

17  viatical settlement contract, but whose principal activity

18  related to the transaction is providing funds or credit

19  enhancement to effect the viatical settlement or the purchase

20  of one or more viatical policies and who has an agreement in

21  writing with one or more licensed viatical settlement

22  providers to finance the acquisition of viatical settlement

23  contracts. The term does not include a nonaccredited investor,

24  a viatical settlement purchaser, or other natural person. A

25  financing entity may not enter into a viatical settlement

26  contract.

27         Section 1045.  Section 626.9912, Florida Statutes, is

28  amended to read:

29         626.9912  Viatical settlement provider license

30  required; application for license.--

31  

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 1         (1)  A person may not perform the functions of a

 2  viatical settlement provider as defined in this act or enter

 3  into or solicit a viatical settlement contract without first

 4  having obtained a license from the office department.

 5         (2)  Application for a viatical settlement provider

 6  license must be made to the office department by the applicant

 7  on a form prescribed by the commission department, under oath

 8  and signed by the applicant.  The application must be

 9  accompanied by a fee of $500. If the applicant is a

10  corporation, the application must be under oath and signed by

11  the president and the secretary of the corporation.

12         (3)  In the application, the applicant must provide all

13  of the following:

14         (a)  The applicant's full name, age, residence address,

15  and business address, and all occupations engaged in by the

16  applicant during the 5 years preceding the date of the

17  application.

18         (b)  A copy of the applicant's basic organizational

19  documents, if any, including the articles of incorporation,

20  articles of association, partnership agreement, trust

21  agreement, or other similar documents, together with all

22  amendments to such documents.

23         (c)  Copies of all bylaws, rules, regulations, or

24  similar documents regulating the conduct of the applicant's

25  internal affairs.

26         (d)  A list showing the name, business and residence

27  addresses, and official position of each individual who is

28  responsible for conduct of the applicant's affairs, including,

29  but not limited to, any member of the applicant's board of

30  directors, board of trustees, executive committee, or other

31  governing board or committee and any other person or entity

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 1  owning or having the right to acquire 10 percent or more of

 2  the voting securities of the applicant.

 3         (e)  With respect to each individual identified under

 4  paragraph (d):

 5         1.  A sworn biographical statement on forms adopted by

 6  the commission and supplied by the office department.

 7         2.  A set of fingerprints on forms prescribed by the

 8  commission department, certified by a law enforcement officer,

 9  and accompanied by the fingerprinting fee specified in s.

10  624.501.

11         3.  Authority for release of information relating to

12  the investigation of the individual's background.

13         (f)  All applications, viatical settlement contract

14  forms, viatical settlement purchase agreement forms, escrow

15  forms, and other related forms proposed to be used by the

16  applicant.

17         (g)  Such other information as the commission or office

18  department deems necessary to determine that the applicant and

19  the individuals identified under paragraph (d) are competent

20  and trustworthy and can lawfully and successfully act as a

21  viatical settlement provider.

22         (4)  The office department may not issue a license to

23  an entity other than a natural person if it is not satisfied

24  that all officers, directors, employees, stockholders,

25  partners, and any other persons who exercise or have the

26  ability to exercise effective control of the entity or who

27  have the ability to influence the transaction of business by

28  the entity meet the standards of this act and have not

29  violated any provision of this act or rules of the commission

30  department related to the business of viatical settlement

31  contracts or viatical settlement purchase agreements.

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 1         (5)  Upon the filing of a sworn application and the

 2  payment of the license fee, the office department shall

 3  investigate each applicant and may issue the applicant a

 4  license if the office department finds that the applicant:

 5         (a)  Has provided a detailed plan of operation.

 6         (b)  Is competent and trustworthy and intends to act in

 7  good faith in the business authorized by the license applied

 8  for.

 9         (c)  Has a good business reputation and has had

10  experience, training, or education that qualifies the

11  applicant to conduct the business authorized by the license

12  applied for.

13         (d)  If the applicant is a corporation, is a

14  corporation incorporated under the laws of this state, or is a

15  foreign corporation authorized to transact business in this

16  state.

17         (e)  Has designated the Chief Financial Officer

18  Insurance Commissioner and Treasurer as its agent for service

19  of process.

20         (f)  Has made the deposit required by s. 626.9913(3).

21         Section 1046.  Subsections (2) and (3) of section

22  626.9913, Florida Statutes, are amended to read:

23         626.9913  Viatical settlement provider license

24  continuance; annual report; fees; deposit.--

25         (2)  Annually, on or before March 1, the viatical

26  settlement provider licensee shall file a statement containing

27  information the commission department requires and shall pay

28  to the office department a license fee in the amount of $500.

29  A viatical settlement provider shall include in all statements

30  filed with the office department all information requested by

31  the office department regarding a related provider trust

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 1  established by the viatical settlement provider. The office

 2  department may require more frequent reporting.  Failure to

 3  timely file the annual statement or to timely pay the license

 4  fee is grounds for immediate suspension of the license.

 5         (3)  A viatical settlement provider licensee must

 6  deposit and maintain deposited in trust with the department

 7  securities eligible for deposit under s. 625.52, having at all

 8  times a value of not less than $100,000.  As an alternative to

 9  meeting the $100,000 deposit requirement, the provider may

10  deposit and maintain deposited in trust with the department

11  such securities in the amount of $25,000 and post with the

12  office department a surety bond acceptable to the office

13  department in the amount of $75,000.

14         Section 1047.  Section 626.9914, Florida Statutes, is

15  amended to read:

16         626.9914  Suspension, revocation, or nonrenewal of

17  viatical settlement provider license; grounds; administrative

18  fine.--

19         (1)  The office department shall suspend, revoke, or

20  refuse to renew the license of any viatical settlement

21  provider if the office department finds that the licensee:

22         (a)  Has made a misrepresentation in the application

23  for the license;

24         (b)  Has engaged in fraudulent or dishonest practices,

25  or otherwise has been shown to be untrustworthy or incompetent

26  to act as a viatical settlement provider;

27         (c)  Demonstrates a pattern of unreasonable payments to

28  viators;

29         (d)  Has been found guilty of, or has pleaded guilty or

30  nolo contendere to, any felony, or a misdemeanor involving

31  

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 1  fraud or moral turpitude, regardless of whether a judgment of

 2  conviction has been entered by the court;

 3         (e)  Has issued viatical settlement contracts that have

 4  not been approved pursuant to this act;

 5         (f)  Has failed to honor contractual obligations

 6  related to the business of viatical settlement contracts;

 7         (g)  Deals in bad faith with viators;

 8         (h)  Has violated any provision of the insurance code

 9  or of this act;

10         (i)  Employs any person who materially influences the

11  licensee's conduct and who fails to meet the requirements of

12  this act; or

13         (j)  No longer meets the requirements for initial

14  licensure.

15         (2)  The office department may, in lieu of or in

16  addition to any suspension or revocation, assess an

17  administrative fine not to exceed $2,500 for each nonwillful

18  violation or $10,000 for each willful violation by a viatical

19  settlement provider licensee.  The office department may also

20  place a viatical settlement provider licensee on probation for

21  a period not to exceed 2 years.

22         (3)  If an employee of a viatical settlement provider

23  violates any provision of this act, the office department may

24  take disciplinary action against such employee as if the

25  employee were licensed under this act, including suspending or

26  otherwise prohibiting the employee from performing the

27  functions of a viatical settlement provider or viatical

28  settlement broker as defined in this act.

29         (4)  If a viatical settlement provider establishes a

30  related provider trust as permitted by this act, the viatical

31  settlement provider shall be liable and responsible for the

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 1  performance of all obligations of the related provider trust

 2  under all viatical settlement contracts entered into by the

 3  related provider trust, and for the compliance of the related

 4  provider trust with all provisions of this act. Any violation

 5  of this act by the related provider trust shall be deemed a

 6  violation of this act by the viatical settlement provider as

 7  well as the related provider trust. If the related provider

 8  trust violates any provisions of this act, the office

 9  department may exercise all remedies set forth in this act for

10  such violations against the viatical settlement provider, as

11  well as the related provider trust.

12         Section 1048.  Subsections (1), (2), and (4) of section

13  626.9915, Florida Statutes, are amended to read:

14         626.9915  Effect of suspension or revocation of

15  viatical settlement provider license; duration of suspension;

16  reinstatement.--

17         (1)  When its license is suspended or revoked, the

18  provider must proceed, immediately following the effective

19  date of the suspension or revocation, to conclude the affairs

20  it is transacting under its license. The provider may not

21  solicit, negotiate, advertise, or effectuate new contracts.

22  The office department retains jurisdiction over the provider

23  until all contracts have been fulfilled or canceled or have

24  expired. A provider whose license is suspended or revoked may

25  continue to maintain and service viaticated policies subject

26  to the approval of the office department.

27         (2)  The suspension of the license of a viatical

28  settlement provider licensee may be for such period, not to

29  exceed 2 years, as determined by the office department.  The

30  office department may shorten, rescind, or modify the

31  suspension.

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 1         (4)  If, upon expiration of the suspension order, the

 2  license has not otherwise been terminated, the office

 3  department must reinstate the license only upon written

 4  request by the suspended licensee unless the office department

 5  finds that the grounds giving rise to the suspension have not

 6  been removed or that the licensee is otherwise not in

 7  compliance with the requirements of this act. The office

 8  department shall give the licensee notice of its findings no

 9  later than 90 days after receipt of the request or upon

10  expiration of the suspension order, whichever occurs later.

11  If a license is not reinstated pursuant to the procedures set

12  forth in this subsection, it expires at the end of the

13  suspension or on the date it otherwise would have expired,

14  whichever is sooner.

15         Section 1049.  Subsections (7), (8), and (9) of section

16  626.9916, Florida Statutes, are amended to read:

17         626.9916  Viatical settlement broker license required;

18  application for license.--

19         (7)  Upon the filing of a sworn application and the

20  payment of the license fee and all other applicable fees under

21  this act, the department shall investigate each applicant and

22  may issue the applicant a license if the department finds that

23  the applicant:

24         (a)  Is competent and trustworthy and intends to act in

25  good faith in the business authorized by the license applied

26  for.

27         (b)  Has a good business reputation and has had

28  experience, training, or education that qualifies the

29  applicant to conduct the business authorized by the license

30  applied for.

31  

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 1         (c)  Except with respect to applicants for nonresident

 2  licenses, is a bona fide resident of this state and actually

 3  resides in this state at least 180 days a year. If an

 4  applicant holds a similar license or an insurance agent's or

 5  broker's license in another state at the time of applying for

 6  a license under this section, the applicant may be found to

 7  meet the residency requirement of this paragraph only after he

 8  or she furnishes a letter of clearance satisfactory to the

 9  department or other proof that the applicant's resident

10  licenses have been canceled or changed to nonresident status

11  and that the applicant is in good standing with the licensing

12  authority.

13         (d)  Is a corporation, a corporation incorporated under

14  the laws of this state, or a foreign corporation authorized to

15  transact business in this state.

16         (e)  Has designated the Chief Financial Officer

17  Insurance Commissioner and Treasurer as its agent for service

18  of process.

19         (8)  An applicant for a nonresident viatical settlement

20  broker license must, in addition to designating the Chief

21  Financial Officer Insurance Commissioner and Treasurer as

22  agent for service of process as required by this section, also

23  furnish the department with the name and address of a resident

24  of this state upon whom notices or orders of the department or

25  process affecting the applicant or licensee may be served.

26  After issuance of the license, the licensee must also notify

27  the department of change of the person to receive such

28  notices, orders, or process; such change is not effective

29  until acknowledged by the department.

30  

31  

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 1         (9)  Beginning July 1, 1997, The department may, by

 2  rule, specify experience, educational, or other training

 3  standards required for licensure under this section.

 4         Section 1050.  Section 626.9919, Florida Statutes, is

 5  amended to read:

 6         626.9919  Notice of change of licensee address or

 7  name.--Each viatical settlement provider licensee, viatical

 8  settlement broker licensee, and viatical settlement sales

 9  agent licensee must provide the office or department, as

10  applicable, at least 30 days' advance notice of any change in

11  the licensee's name, residence address, principal business

12  address, or mailing address.

13         Section 1051.  Section 626.9921, Florida Statutes, is

14  amended to read:

15         626.9921  Filing of forms; required procedures;

16  approval.--

17         (1)  A viatical settlement contract form, viatical

18  settlement purchase agreement form, escrow form, or related

19  form may be used in this state only after the form has been

20  filed with the office department and only after the form has

21  been approved by the office department.

22         (2)  The viatical settlement contract form, viatical

23  settlement purchase agreement form, escrow form, or related

24  form must be filed with the office department at least 60 days

25  before its use.  The form is considered approved on the 60th

26  day after its date of filing unless it has been previously

27  disapproved by the office department. The office department

28  must disapprove a viatical settlement contract form, viatical

29  settlement purchase agreement form, escrow form, or related

30  form that is unreasonable, contrary to the public interest,

31  

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 1  discriminatory, or misleading or unfair to the viator or the

 2  purchaser.

 3         (3)  If a viatical settlement provider elects to use a

 4  related provider trust in accordance with this act, the

 5  viatical settlement provider shall file notice of its

 6  intention to use a related provider trust with the office

 7  department, including a copy of the trust agreement of the

 8  related provider trust. The organizational documents of the

 9  trust must be submitted to and approved by the office

10  department before the transacting of business by the trust.

11         (4)  The commission department may adopt, by rule,

12  standardized forms to be used by licensees, at the licensee's

13  option in place of separately approved forms.

14         Section 1052.  Section 626.9922, Florida Statutes, is

15  amended to read:

16         626.9922  Examination.--

17         (1)  The office or department may examine the business

18  and affairs of any of its respective licensees or applicants

19  licensee or applicant for a license. The office or department

20  may order any such licensee or applicant to produce any

21  records, books, files, advertising and solicitation materials,

22  or other information and may take statements under oath to

23  determine whether the licensee or applicant is in violation of

24  the law or is acting contrary to the public interest.  The

25  expenses incurred in conducting any examination or

26  investigation must be paid by the licensee or applicant.

27  Examinations and investigations must be conducted as provided

28  in chapter 624, and licensees are subject to all applicable

29  provisions of the insurance code.

30         (2)  All accounts, books and records, documents, files,

31  contracts, and other information relating to all transactions

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 1  of viatical settlement contracts or viatical settlement

 2  purchase agreements must be maintained by the licensee for a

 3  period of at least 3 years after the death of the insured and

 4  must be available to the office or department for inspection

 5  during reasonable business hours.

 6         (3)  All such records or accurate copies of such

 7  records must be maintained at the licensee's home office. As

 8  used in this section, the term "home office" means the

 9  principal place of business and any other single storage

10  facility, the street address of which shall be disclosed to

11  the office or department within 20 days after its initial use,

12  or within 20 days of the effective date of this subsection.

13         (4)  The originals of records required to be maintained

14  under this section must be made available to the office or

15  department for examination at the office's or department's

16  request.

17         Section 1053.  Subsection (2) of section 626.99235,

18  Florida Statutes, is amended to read:

19         626.99235  Disclosures to viatical settlement

20  purchasers; misrepresentations.--

21         (2)  The viatical settlement provider and the viatical

22  settlement sales agent, themselves or through another person,

23  shall provide in writing the following disclosures to any

24  viatical settlement purchaser or purchaser prospect:

25         (a)  That the return represented as being available

26  under the viatical settlement purchase agreement is directly

27  tied to the projected life span of one or more insureds.

28         (b)  If a return is represented, the disclosure shall

29  indicate the projected life span of the insured or insureds

30  whose life or lives are tied to the return.

31  

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 1         (c)  If required by the terms of the viatical

 2  settlement purchase agreement, that the viatical settlement

 3  purchaser shall be responsible for the payment of insurance

 4  premiums on the life of the insured, late or surrender fees,

 5  or other costs related to the life insurance policy on the

 6  life of the insured or insureds which may reduce the return.

 7         (d)  The amount of any trust fees, commissions,

 8  deductions, or other expenses, if any, to be charged to the

 9  viatical settlement purchaser.

10         (e)  The name and address of the person responsible for

11  tracking the insured.

12         (f)  That group policies may contain limitations or

13  caps in the conversion rights, that additional premiums may

14  have to be paid if the policy is converted, and that the party

15  responsible for the payment of such additional premiums shall

16  be identified.

17         (g)  That the life expectancy and rate of return are

18  only estimates and cannot be guaranteed.

19         (h)  That the purchase of a viatical settlement

20  contract should not be considered a liquid purchase, since it

21  is impossible to predict the exact timing of its maturity and

22  the funds may not be available until the death of the insured.

23         (i)  The name and address of the person with the

24  responsibility for paying the premium until the death of the

25  insured.

26  

27  The written disclosure required under this subsection shall be

28  conspicuously displayed in any viatical settlement purchase

29  agreement, and in any solicitation material furnished to the

30  viatical settlement purchaser by such viatical settlement

31  provider, related provider trust, or person, and shall be in

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 1  contrasting color and in not less than 10-point type or no

 2  smaller than the largest type on the page if larger than

 3  10-point type. The commission may department is authorized to

 4  adopt by rule the disclosure form to be used. The disclosures

 5  need not be furnished in an invitation to inquire, the

 6  objective of which is to create a desire to inquire further

 7  about entering into a viatical settlement purchase agreement.

 8  The invitation to inquire may not quote rates of return, may

 9  not include material attendant to the execution of any

10  specific viatical settlement purchase agreement, and may not

11  relate to any specific viator.

12         Section 1054.  Section 626.99245, Florida Statutes, is

13  amended to read:

14         626.99245  Conflict of regulation of viaticals.--

15         (1)  A viatical settlement provider who from this state

16  enters into a viatical settlement purchase agreement with a

17  purchaser who is a resident of another state that has enacted

18  statutes or adopted regulations governing viatical settlement

19  purchase agreements, shall be governed in the effectuation of

20  that viatical settlement purchase agreement by the statutes

21  and regulations of the purchaser's state of residence. If the

22  state in which the purchaser is a resident has not enacted

23  statutes or regulations governing viatical settlement purchase

24  agreements, the provider shall give the purchaser notice that

25  neither Florida nor his or her state regulates the transaction

26  upon which he or she is entering. For transactions in these

27  states, however, the viatical settlement provider is to

28  maintain all records required as if the transactions were

29  executed in Florida. However, the forms used in those states

30  need not be approved by the office department.

31  

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 1         (2)  A viatical settlement provider who from this state

 2  enters into a viatical settlement contract with a viator who

 3  is a resident of another state that has enacted statutes or

 4  adopted regulations governing viatical settlement contracts

 5  shall be governed in the effectuation of that viatical

 6  settlement contract by the statutes and regulations of the

 7  viator's state of residence. If the state in which the viator

 8  is a resident has not enacted statutes or regulations

 9  governing viatical settlement agreements, the provider shall

10  give the viator notice that neither Florida nor his or her

11  state regulates the transaction upon which he or she is

12  entering. For transactions in those states, however, the

13  viatical settlement provider is to maintain all records

14  required as if the transactions were executed in Florida. The

15  forms used in those states need not be approved by the office

16  department.

17         (3)  This section does not affect the requirement of

18  ss. 626.9911(5) 626.9911(6) and 626.9912(1) that a viatical

19  settlement provider doing business from this state must obtain

20  a viatical settlement license from the office department. As

21  used in this subsection, the term "doing business from this

22  state" includes effectuating viatical settlement contracts and

23  effectuating viatical settlement purchase agreements from

24  offices in this state, regardless of the state of residence of

25  the viator or the viatical settlement purchaser.

26         Section 1055.  Section 626.9925, Florida Statutes, is

27  amended to read:

28         626.9925  Rules.--The commission department may adopt

29  rules to administer this act, including rules establishing

30  standards for evaluating advertising by licensees; rules

31  providing for the collection of data, for disclosures to

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 1  viators or purchasers, and for the reporting of life

 2  expectancies; and rules defining terms used in this act and

 3  prescribing recordkeeping requirements relating to executed

 4  viatical settlement contracts and viatical settlement purchase

 5  agreements.

 6         Section 1056.  Section 626.9926, Florida Statutes, is

 7  amended to read:

 8         626.9926  Rate regulation not authorized.--Nothing in

 9  this act shall be construed to authorize the office or

10  department to directly or indirectly regulate the amount paid

11  as consideration for entry into a viatical settlement contract

12  or viatical settlement purchase agreement.

13         Section 1057.  Subsection (2) of section 626.9927,

14  Florida Statutes, is amended to read:

15         626.9927  Unfair trade practices; cease and desist;

16  injunctions; civil remedy.--

17         (2)  In addition to the penalties and other enforcement

18  provisions of this act, if any person violates this act or any

19  rule implementing this act, the office or department, as

20  appropriate, may seek an injunction in the circuit court of

21  the county where the person resides or has a principal place

22  of business and may apply for temporary and permanent orders

23  that the office or department determines necessary to restrain

24  the person from committing the violation.

25         Section 1058.  Section 626.99272, Florida Statutes, is

26  amended to read:

27         626.99272  Cease and desist orders and fines.--

28         (1)  The office or department as appropriate may issue

29  a cease and desist order upon a person that violates any

30  provision of this part, any rule or order adopted by the

31  

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 1  commission, office, or department, or any written agreement

 2  entered into with the office or department.

 3         (2)  When the office or department finds that such an

 4  action presents an immediate danger to the public which

 5  requires an immediate final order, it may issue an emergency

 6  cease and desist order reciting with particularity the facts

 7  underlying such findings. The emergency cease and desist order

 8  is effective immediately upon service of a copy of the order

 9  on the respondent and remains effective for 90 days. If the

10  office or department begins nonemergency cease and desist

11  proceedings under subsection (1), the emergency cease and

12  desist order remains effective, absent an order by an

13  appellate court of competent jurisdiction pursuant to s.

14  120.68, until the conclusion of proceedings under ss. 120.569

15  and 120.57.

16         (3)  The office or department may impose and collect an

17  administrative fine not to exceed $10,000 for each nonwillful

18  violation and $25,000 for each willful violation of any

19  provision of this part.

20         Section 1059.  Section 626.99285, Florida Statutes, is

21  amended to read:

22         626.99285  Applicability of insurance code.--In

23  addition to other applicable provisions cited in the insurance

24  code, the office or department, as appropriate, has the

25  authority granted under ss. 624.310, 626.901, and 626.989 to

26  regulate viatical settlement providers, viatical settlement

27  brokers, viatical settlement sales agents, viatical settlement

28  contracts, viatical settlement purchase agreements, and

29  viatical settlement transactions.

30         Section 1060.  Section 626.99295, Florida Statutes, is

31  amended to read:

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 1         626.99295  Grace period.--An unlicensed viatical

 2  settlement provider or viatical settlement broker that was

 3  legally transacting business in this state on June 30, 2000,

 4  may continue to transact such business, in the absence of any

 5  orders by the office, department, or the former Department of

 6  Insurance to the contrary, until the office or department, as

 7  applicable, approves or disapproves the viatical settlement

 8  provider's application for licensure if the viatical

 9  settlement provider or viatical settlement broker filed files

10  with the former department an application for licensure no

11  later than August 1, 2000, and if the viatical settlement

12  provider or viatical settlement broker complies with all other

13  provisions of this act. Any form for which former department

14  approval was is required under this part must have been be

15  filed by August 1, 2000, and may continue to be used until

16  disapproved by the office or department.

17         Section 1061.  Subsection (2) of section 627.031,

18  Florida Statutes, is amended to read:

19         627.031  Purposes of this part; interpretation.--

20         (2)  It is the purpose of this part to protect

21  policyholders and the public against the adverse effects of

22  excessive, inadequate, or unfairly discriminatory insurance

23  rates, and to authorize the office department to regulate such

24  rates.  If at any time the office department has reason to

25  believe any such rate is excessive, inadequate, or unfairly

26  discriminatory under the law, it is directed to take the

27  necessary action to cause such rate to comply with the laws of

28  this state.

29         Section 1062.  Section 627.0612, Florida Statutes, is

30  amended to read:

31  

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 1         627.0612  Administrative proceedings in rating

 2  determinations.--In any proceeding to determine whether rates,

 3  rating plans, or other matters governed by this part comply

 4  with the law, the appellate court shall set aside a final

 5  order of the office department if the office department has

 6  violated s. 120.57(1)(k) by substituting its findings of fact

 7  for findings of an administrative law judge which were

 8  supported by competent substantial evidence.

 9         Section 1063.  Section 627.0613, Florida Statutes, is

10  amended to read:

11         627.0613  Consumer advocate.--The Chief Financial

12  Officer Insurance Commissioner must appoint a consumer

13  advocate who must represent the general public of the state

14  before the department and the office.  The consumer advocate

15  must report directly to the Chief Financial Officer Insurance

16  Commissioner, but is not otherwise under the authority of the

17  department or of any employee of the department.  The consumer

18  advocate has such powers as are necessary to carry out the

19  duties of the office of consumer advocate, including, but not

20  limited to, the powers to:

21         (1)  Recommend to the department or office, by

22  petition, the commencement of any proceeding or action; appear

23  in any proceeding or action before the department or office;

24  or appear in any proceeding before the Division of

25  Administrative Hearings relating to subject matter under the

26  jurisdiction of the department or office.

27         (2)  Have access to and use of all files, records, and

28  data of the department or office.

29         (3)  Examine rate and form filings submitted to the

30  office department, hire consultants as necessary to aid in the

31  review process, and recommend to the department or office any

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 1  position deemed by the consumer advocate to be in the public

 2  interest.

 3         (4)  Prepare an annual budget for presentation to the

 4  Legislature by the department, which budget must be adequate

 5  to carry out the duties of the office of consumer advocate.

 6         Section 1064.  Subsections (2), (3), and (6) of section

 7  627.062, Florida Statutes, are amended to read:

 8         627.062  Rate standards.--

 9         (2)  As to all such classes of insurance:

10         (a)  Insurers or rating organizations shall establish

11  and use rates, rating schedules, or rating manuals to allow

12  the insurer a reasonable rate of return on such classes of

13  insurance written in this state.  A copy of rates, rating

14  schedules, rating manuals, premium credits or discount

15  schedules, and surcharge schedules, and changes thereto, shall

16  be filed with the office department under one of the following

17  procedures:

18         1.  If the filing is made at least 90 days before the

19  proposed effective date and the filing is not implemented

20  during the office's department's review of the filing and any

21  proceeding and judicial review, then such filing shall be

22  considered a "file and use" filing.  In such case, the office

23  department shall finalize its review by issuance of a notice

24  of intent to approve or a notice of intent to disapprove

25  within 90 days after receipt of the filing. The notice of

26  intent to approve and the notice of intent to disapprove

27  constitute agency action for purposes of the Administrative

28  Procedure Act. Requests for supporting information, requests

29  for mathematical or mechanical corrections, or notification to

30  the insurer by the office department of its preliminary

31  findings shall not toll the 90-day period during any such

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 1  proceedings and subsequent judicial review. The rate shall be

 2  deemed approved if the office department does not issue a

 3  notice of intent to approve or a notice of intent to

 4  disapprove within 90 days after receipt of the filing.

 5         2.  If the filing is not made in accordance with the

 6  provisions of subparagraph 1., such filing shall be made as

 7  soon as practicable, but no later than 30 days after the

 8  effective date, and shall be considered a "use and file"

 9  filing.  An insurer making a "use and file" filing is

10  potentially subject to an order by the office department to

11  return to policyholders portions of rates found to be

12  excessive, as provided in paragraph (h).

13         (b)  Upon receiving a rate filing, the office

14  department shall review the rate filing to determine if a rate

15  is excessive, inadequate, or unfairly discriminatory.  In

16  making that determination, the office department shall, in

17  accordance with generally accepted and reasonable actuarial

18  techniques, consider the following factors:

19         1.  Past and prospective loss experience within and

20  without this state.

21         2.  Past and prospective expenses.

22         3.  The degree of competition among insurers for the

23  risk insured.

24         4.  Investment income reasonably expected by the

25  insurer, consistent with the insurer's investment practices,

26  from investable premiums anticipated in the filing, plus any

27  other expected income from currently invested assets

28  representing the amount expected on unearned premium reserves

29  and loss reserves.  The commission department may adopt

30  promulgate rules utilizing reasonable techniques of actuarial

31  science and economics to specify the manner in which insurers

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 1  shall calculate investment income attributable to such classes

 2  of insurance written in this state and the manner in which

 3  such investment income shall be used in the calculation of

 4  insurance rates.  Such manner shall contemplate allowances for

 5  an underwriting profit factor and full consideration of

 6  investment income which produce a reasonable rate of return;

 7  however, investment income from invested surplus shall not be

 8  considered. The profit and contingency factor as specified in

 9  the filing shall be utilized in computing excess profits in

10  conjunction with s. 627.0625.

11         5.  The reasonableness of the judgment reflected in the

12  filing.

13         6.  Dividends, savings, or unabsorbed premium deposits

14  allowed or returned to Florida policyholders, members, or

15  subscribers.

16         7.  The adequacy of loss reserves.

17         8.  The cost of reinsurance.

18         9.  Trend factors, including trends in actual losses

19  per insured unit for the insurer making the filing.

20         10.  Conflagration and catastrophe hazards, if

21  applicable.

22         11.  A reasonable margin for underwriting profit and

23  contingencies.

24         12.  The cost of medical services, if applicable.

25         13.  Other relevant factors which impact upon the

26  frequency or severity of claims or upon expenses.

27         (c)  In the case of fire insurance rates, consideration

28  shall be given to the availability of water supplies and the

29  experience of the fire insurance business during a period of

30  not less than the most recent 5-year period for which such

31  experience is available.

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 1         (d)  If conflagration or catastrophe hazards are given

 2  consideration by an insurer in its rates or rating plan,

 3  including surcharges and discounts, the insurer shall

 4  establish a reserve for that portion of the premium allocated

 5  to such hazard and shall maintain the premium in a catastrophe

 6  reserve.  Any removal of such premiums from the reserve for

 7  purposes other than paying claims associated with a

 8  catastrophe or purchasing reinsurance for catastrophes shall

 9  be subject to approval of the office department.  Any ceding

10  commission received by an insurer purchasing reinsurance for

11  catastrophes shall be placed in the catastrophe reserve.

12         (e)  After consideration of the rate factors provided

13  in paragraphs (b), (c), and (d), a rate may be found by the

14  office department to be excessive, inadequate, or unfairly

15  discriminatory based upon the following standards:

16         1.  Rates shall be deemed excessive if they are likely

17  to produce a profit from Florida business that is unreasonably

18  high in relation to the risk involved in the class of business

19  or if expenses are unreasonably high in relation to services

20  rendered.

21         2.  Rates shall be deemed excessive if, among other

22  things, the rate structure established by a stock insurance

23  company provides for replenishment of surpluses from premiums,

24  when the replenishment is attributable to investment losses.

25         3.  Rates shall be deemed inadequate if they are

26  clearly insufficient, together with the investment income

27  attributable to them, to sustain projected losses and expenses

28  in the class of business to which they apply.

29         4.  A rating plan, including discounts, credits, or

30  surcharges, shall be deemed unfairly discriminatory if it

31  fails to clearly and equitably reflect consideration of the

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 1  policyholder's participation in a risk management program

 2  adopted pursuant to s. 627.0625.

 3         5.  A rate shall be deemed inadequate as to the premium

 4  charged to a risk or group of risks if discounts or credits

 5  are allowed which exceed a reasonable reflection of expense

 6  savings and reasonably expected loss experience from the risk

 7  or group of risks.

 8         6.  A rate shall be deemed unfairly discriminatory as

 9  to a risk or group of risks if the application of premium

10  discounts, credits, or surcharges among such risks does not

11  bear a reasonable relationship to the expected loss and

12  expense experience among the various risks.

13         (f)  In reviewing a rate filing, the office department

14  may require the insurer to provide at the insurer's expense

15  all information necessary to evaluate the condition of the

16  company and the reasonableness of the filing according to the

17  criteria enumerated in this section.

18         (g)  The office department may at any time review a

19  rate, rating schedule, rating manual, or rate change; the

20  pertinent records of the insurer; and market conditions.  If

21  the office department finds on a preliminary basis that a rate

22  may be excessive, inadequate, or unfairly discriminatory, the

23  office department shall initiate proceedings to disapprove the

24  rate and shall so notify the insurer. However, the office

25  department may not disapprove as excessive any rate for which

26  it has given final approval or which has been deemed approved

27  for a period of 1 year after the effective date of the filing

28  unless the office department finds that a material

29  misrepresentation or material error was made by the insurer or

30  was contained in the filing.  Upon being so notified, the

31  insurer or rating organization shall, within 60 days, file

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 1  with the office department all information which, in the

 2  belief of the insurer or organization, proves the

 3  reasonableness, adequacy, and fairness of the rate or rate

 4  change.  The office department shall issue a notice of intent

 5  to approve or a notice of intent to disapprove pursuant to the

 6  procedures of paragraph (a) within 90 days after receipt of

 7  the insurer's initial response.  In such instances and in any

 8  administrative proceeding relating to the legality of the

 9  rate, the insurer or rating organization shall carry the

10  burden of proof by a preponderance of the evidence to show

11  that the rate is not excessive, inadequate, or unfairly

12  discriminatory.  After the office department notifies an

13  insurer that a rate may be excessive, inadequate, or unfairly

14  discriminatory, unless the office department withdraws the

15  notification, the insurer shall not alter the rate except to

16  conform with the office's department's notice until the

17  earlier of 120 days after the date the notification was

18  provided or 180 days after the date of the implementation of

19  the rate.  The office department may, subject to chapter 120,

20  disapprove without the 60-day notification any rate increase

21  filed by an insurer within the prohibited time period or

22  during the time that the legality of the increased rate is

23  being contested.

24         (h)  In the event the office department finds that a

25  rate or rate change is excessive, inadequate, or unfairly

26  discriminatory, the office department shall issue an order of

27  disapproval specifying that a new rate or rate schedule which

28  responds to the findings of the office department be filed by

29  the insurer.  The office department shall further order, for

30  any "use and file" filing made in accordance with subparagraph

31  (a)2., that premiums charged each policyholder constituting

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 1  the portion of the rate above that which was actuarially

 2  justified be returned to such policyholder in the form of a

 3  credit or refund. If the office department finds that an

 4  insurer's rate or rate change is inadequate, the new rate or

 5  rate schedule filed with the office department in response to

 6  such a finding shall be applicable only to new or renewal

 7  business of the insurer written on or after the effective date

 8  of the responsive filing.

 9         (i)  Except as otherwise specifically provided in this

10  chapter, the office department shall not prohibit any insurer,

11  including any residual market plan or joint underwriting

12  association, from paying acquisition costs based on the full

13  amount of premium, as defined in s. 627.403, applicable to any

14  policy, or prohibit any such insurer from including the full

15  amount of acquisition costs in a rate filing.

16  

17  The provisions of this subsection shall not apply to workers'

18  compensation and employer's liability insurance and to motor

19  vehicle insurance.

20         (3)(a)  For individual risks that are not rated in

21  accordance with the insurer's rates, rating schedules, rating

22  manuals, and underwriting rules filed with the office

23  department and which have been submitted to the insurer for

24  individual rating, the insurer must maintain documentation on

25  each risk subject to individual risk rating.  The

26  documentation must identify the named insured and specify the

27  characteristics and classification of the risk supporting the

28  reason for the risk being individually risk rated, including

29  any modifications to existing approved forms to be used on the

30  risk.  The insurer must maintain these records for a period of

31  at least 5 years after the effective date of the policy.

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 1         (b)  Individual risk rates and modifications to

 2  existing approved forms are not subject to this part or part

 3  II, except for paragraph (a) and ss. 627.402, 627.403,

 4  627.4035, 627.404, 627.405, 627.406, 627.407, 627.4085,

 5  627.409, 627.4132, 627.4133, 627.415, 627.416, 627.417,

 6  627.419, 627.425, 627.426, 627.4265, 627.427, and 627.428, but

 7  are subject to all other applicable provisions of this code

 8  and rules adopted thereunder.

 9         (c)  This subsection does not apply to private

10  passenger motor vehicle insurance.

11         (6)(a)  After any action with respect to a rate filing

12  that constitutes agency action for purposes of the

13  Administrative Procedure Act, an insurer may, in lieu of

14  demanding a hearing under s. 120.57, require arbitration of

15  the rate filing. Arbitration shall be conducted by a board of

16  arbitrators consisting of an arbitrator selected by the office

17  department, an arbitrator selected by the insurer, and an

18  arbitrator selected jointly by the other two arbitrators. Each

19  arbitrator must be certified by the American Arbitration

20  Association. A decision is valid only upon the affirmative

21  vote of at least two of the arbitrators. No arbitrator may be

22  an employee of any insurance regulator or regulatory body or

23  of any insurer, regardless of whether or not the employing

24  insurer does business in this state. The office department and

25  the insurer must treat the decision of the arbitrators as the

26  final approval of a rate filing. Costs of arbitration shall be

27  paid by the insurer.

28         (b)  Arbitration under this subsection shall be

29  conducted pursuant to the procedures specified in ss.

30  682.06-682.10. Either party may apply to the circuit court to

31  vacate or modify the decision pursuant to s. 682.13 or s.

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 1  682.14. The commission department shall adopt rules for

 2  arbitration under this subsection, which rules may not be

 3  inconsistent with the arbitration rules of the American

 4  Arbitration Association as of January 1, 1996.

 5         (c)  Upon initiation of the arbitration process, the

 6  insurer waives all rights to challenge the action of the

 7  office department under the Administrative Procedure Act or

 8  any other provision of law; however, such rights are restored

 9  to the insurer if the arbitrators fail to render a decision

10  within 90 days after initiation of the arbitration process.

11         Section 1065.  Subsection (3) of section 627.0625,

12  Florida Statutes, is amended to read:

13         627.0625  Commercial property and casualty risk

14  management plans.--

15         (3)  Each insurer or insurer group offering commercial

16  casualty insurance or commercial property insurance covering

17  risks located in this state shall develop and make available

18  to insureds guidelines for risk management plans.  The risk

19  management program shall include the following:

20         (a)  Safety measures, including, as applicable, the

21  following areas:

22         1.  Pollution and environmental hazards;

23         2.  Disease hazards;

24         3.  Accidental occurrences;

25         4.  Fire hazards and fire prevention and detection;

26         5.  Liability for acts from the course of business;

27         6.  Slip and fall hazards;

28         7.  Product injury; and

29         8.  Hazards unique to a particular class or category of

30  insureds.

31  

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 1         (b)  Training to insureds in safety management

 2  techniques.

 3         (c)  Safety management counseling services.

 4  

 5  There shall be no civil cause of action against any insurer or

 6  its agents or employees for acts or omissions in any way

 7  connected with the requirements of this subsection.  This

 8  shall not limit the authority for the office department to

 9  enforce the provisions of this subsection.

10         Section 1066.  Paragraphs (a), (b), and (c) of

11  subsection (2) and paragraph (c) of subsection (3) of section

12  627.0628, Florida Statutes, are amended to read:

13         627.0628  Florida Commission on Hurricane Loss

14  Projection Methodology.--

15         (2)  COMMISSION CREATED.--

16         (a)  There is created the Florida Commission on

17  Hurricane Loss Projection Methodology, which is assigned to

18  the State Board of Administration.  For the purposes of this

19  section, the term "commission" means the Florida Commission on

20  Hurricane Loss Projection Methodology. The commission shall be

21  administratively housed within the State Board of

22  Administration, but it shall independently exercise the powers

23  and duties specified in this section.

24         (b)  The commission shall consist of the following 11

25  members:

26         1.  The insurance consumer advocate.

27         2.  The senior employee of the State Board of

28  Administration responsible for operations Chief Operating

29  Officer of the Florida Hurricane Catastrophe Fund.

30  

31  

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 1         3.  The Executive Director of the Citizens Property

 2  Insurance Corporation Residential Property and Casualty Joint

 3  Underwriting Association.

 4         4.  The Director of the Division of Emergency

 5  Management of the Department of Community Affairs.

 6         5.  The actuary member of the Florida Hurricane

 7  Catastrophe Fund Advisory Council.

 8         6.  Six members appointed by the Chief Financial

 9  Officer Insurance Commissioner, as follows:

10         a.  An employee of the office Department of Insurance

11  who is an actuary responsible for property insurance rate

12  filings.

13         b.  An actuary who is employed full time by a property

14  and casualty insurer which was responsible for at least 1

15  percent of the aggregate statewide direct written premium for

16  homeowner's insurance in the calendar year preceding the

17  member's appointment to the commission.

18         c.  An expert in insurance finance who is a full time

19  member of the faculty of the State University System and who

20  has a background in actuarial science.

21         d.  An expert in statistics who is a full time member

22  of the faculty of the State University System and who has a

23  background in insurance.

24         e.  An expert in computer system design who is a full

25  time member of the faculty of the State University System.

26         f.  An expert in meteorology who is a full time member

27  of the faculty of the State University System and who

28  specializes in hurricanes.

29         (c)  Members designated under subparagraphs (b)1.-5.

30  shall serve on the commission as long as they maintain the

31  respective offices designated in subparagraphs (b)1.-5.

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 1  Members appointed by the Chief Financial Officer Insurance

 2  Commissioner under subparagraph (b)6. shall serve on the

 3  commission until the end of the term of office of the Chief

 4  Financial Officer Insurance Commissioner who appointed them,

 5  unless earlier removed by the Chief Financial Officer

 6  Insurance Commissioner for cause.  Vacancies on the commission

 7  shall be filled in the same manner as the original

 8  appointment.

 9         (3)  ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.--

10         (c)  With respect to a rate filing under s. 627.062, an

11  insurer may employ actuarial methods, principles, standards,

12  models, or output ranges found by the commission to be

13  accurate or reliable to determine hurricane loss factors for

14  use in a rate filing under s. 627.062, which findings and

15  factors are admissible and relevant in consideration of a rate

16  filing by the office department or in any arbitration or

17  administrative or judicial review.

18         Section 1067.  Paragraph (b) of subsection (2) and

19  subsections (5), (6), and (9) of section 627.0629, Florida

20  Statutes, are amended to read:

21         627.0629  Residential property insurance; rate

22  filings.--

23         (2)

24         (b)  A rate filing for residential property insurance

25  made more than 150 days after approval by the office

26  department of a building code rating factor plan submitted by

27  a statewide rating organization shall include positive and

28  negative rate factors that reflect the manner in which

29  building code enforcement in a particular jurisdiction

30  addresses risk of wind damage. The rate filing shall include

31  variations from standard rate factors on an individual basis

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 1  based on inspection of a particular structure by a licensed

 2  home inspector.  If an inspection is requested by the insured,

 3  the insurer may require the insured to pay the reasonable cost

 4  of the inspection.  This paragraph applies to structures

 5  constructed or renovated after the implementation of this

 6  paragraph.

 7         (5)  In order to provide an appropriate transition

 8  period, an insurer may, in its sole discretion, implement an

 9  approved rate filing for residential property insurance over a

10  period of years. An insurer electing to phase in its rate

11  filing must provide an informational notice to the office

12  department setting out its schedule for implementation of the

13  phased-in rate filing.

14         (6)  An insurer may not write a residential property

15  insurance policy without providing windstorm coverage or

16  hurricane coverage as defined in s. 627.4025. This subsection

17  does not apply with respect to risks located in an area

18  eligible for coverage under the high-risk account of the

19  Citizens Property Insurance Corporation pursuant to s.

20  627.351(6) Florida Windstorm Underwriting Association under s.

21  627.351(2).

22         (9)  EVALUATION OF RESIDENTIAL PROPERTY STRUCTURAL

23  SOUNDNESS.--

24         (a)  It is the intent of the Legislature to provide a

25  program whereby homeowners may obtain an evaluation of the

26  wind resistance of their homes with respect to preventing

27  damage from hurricanes, together with a recommendation of

28  reasonable steps that may be taken to upgrade their homes to

29  better withstand hurricane force winds.

30         (b)  To the extent that funds are provided for this

31  purpose in the General Appropriations Act, the Legislature

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 1  hereby authorizes the establishment of a program to be

 2  administered by the Citizens Property Insurance Corporation

 3  for homeowners insured in the high-risk account Florida

 4  Windstorm Underwriting Association.

 5         (c)  The program shall provide grants to homeowners,

 6  for the purpose of providing homeowner applicants with funds

 7  to conduct an evaluation of the integrity of their homes with

 8  respect to withstanding hurricane force winds, recommendations

 9  to retrofit the homes to better withstand damage from such

10  winds, and the estimated cost to make the recommended

11  retrofits.

12         (d)  The Department of Community Affairs shall

13  establish by rule standards to govern the quality of the

14  evaluation, the quality of the recommendations for

15  retrofitting, the eligibility of the persons conducting the

16  evaluation, and the selection of applicants under the program.

17  In establishing the rule, the Department of Community Affairs

18  shall consult with the advisory committee to minimize the

19  possibility of fraud or abuse in the evaluation and

20  retrofitting process, and to ensure that funds spent by

21  homeowners acting on the recommendations achieve positive

22  results.

23         (e)  The Citizens Property Insurance Corporation

24  Florida Windstorm Underwriting Association shall identify

25  areas of this state with the greatest wind risk to residential

26  properties and recommend annually to the Department of

27  Community Affairs priority target areas for such evaluations

28  and inclusion with the associated residential construction

29  mitigation program.

30         Section 1068.  Subsection (1), paragraph (b) of

31  subsection (2), paragraph (a) of subsection (3), and

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 1  subsections (6), (7), and (9) of section 627.0645, Florida

 2  Statutes, are amended to read:

 3         627.0645  Annual filings.--

 4         (1)  Each rating organization filing rates for, and

 5  each insurer writing, any line of property or casualty

 6  insurance to which this part applies, except:

 7         (a)  Workers' compensation and employer's liability

 8  insurance; or

 9         (b)  Commercial property and casualty insurance as

10  defined in s. 627.0625(1) other than commercial multiple line

11  and commercial motor vehicle,

12  

13  shall make an annual base rate filing for each such line with

14  the office department no later than 12 months after its

15  previous base rate filing, demonstrating that its rates are

16  not inadequate.

17         (2)

18         (b)  The office department, after receiving a request

19  to be exempted from the provisions of this section, may, for

20  good cause due to insignificant numbers of policies in force

21  or insignificant premium volume, exempt a company, by line of

22  coverage, from filing rates or rate certification as required

23  by this section.

24         (3)  The filing requirements of this section shall be

25  satisfied by one of the following methods:

26         (a)  A rate filing prepared by an actuary which

27  contains documentation demonstrating that the proposed rates

28  are not excessive, inadequate, or unfairly discriminatory

29  pursuant to the applicable rating laws and pursuant to rules

30  of the commission department.

31  

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 1         (6)  If at the time a filing is required under this

 2  section an insurer is in the process of completing a rate

 3  review, the insurer may apply to the office department for an

 4  extension of up to an additional 30 days in which to make the

 5  filing.  The request for extension must be received by the

 6  office department no later than the date the filing is due.

 7         (7)  Nothing in this section limits the office's

 8  department's authority to review rates at any time or to find

 9  that a rate or rate change is excessive, inadequate, or

10  unfairly discriminatory pursuant to s. 627.062.

11         (9)  If an insurer fails to meet the filing

12  requirements of this section and does not submit the filing

13  within 60 days after the date the filing is due, the office

14  department may, in addition to any other penalty authorized by

15  law, order the insurer to discontinue the issuance of policies

16  for the line of insurance for which the required filing was

17  not made until such time as the office department determines

18  that the required filing is properly submitted.

19         Section 1069.  Subsection (1) of section 627.06501,

20  Florida Statutes, is amended to read:

21         627.06501  Insurance discounts for certain persons

22  completing driver improvement course.--

23         (1)  Any rate, rating schedule, or rating manual for

24  the liability, personal injury protection, and collision

25  coverages of a motor vehicle insurance policy filed with the

26  office department may provide for an appropriate reduction in

27  premium charges as to such coverages when the principal

28  operator on the covered vehicle has successfully completed a

29  driver improvement course approved and certified by the

30  Department of Highway Safety and Motor Vehicles which is

31  effective in reducing crash or violation rates, or both, as

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 1  determined pursuant to s. 318.1451(5). Any discount, not to

 2  exceed 10 percent, used by an insurer is presumed to be

 3  appropriate unless credible data demonstrates otherwise.

 4         Section 1070.  Subsections (1) and (2), paragraph (b)

 5  of subsection (5), subsections (9), (10), and (11), and

 6  paragraph (b) of subsection (13) of section 627.0651, Florida

 7  Statutes, are amended to read:

 8         627.0651  Making and use of rates for motor vehicle

 9  insurance.--

10         (1)  Insurers shall establish and use rates, rating

11  schedules, or rating manuals to allow the insurer a reasonable

12  rate of return on motor vehicle insurance written in this

13  state.  A copy of rates, rating schedules, and rating manuals,

14  and changes therein, shall be filed with the office department

15  under one of the following procedures:

16         (a)  If the filing is made at least 60 days before the

17  proposed effective date and the filing is not implemented

18  during the office's department's review of the filing and any

19  proceeding and judicial review, such filing shall be

20  considered a "file and use" filing.  In such case, the office

21  department shall initiate proceedings to disapprove the rate

22  and so notify the insurer or shall finalize its review within

23  60 days after receipt of the filing.  Notification to the

24  insurer by the office department of its preliminary findings

25  shall toll the 60-day period during any such proceedings and

26  subsequent judicial review.  The rate shall be deemed approved

27  if the office department does not issue notice to the insurer

28  of its preliminary findings within 60 days after the filing.

29         (b)  If the filing is not made in accordance with the

30  provisions of paragraph (a), such filing shall be made as soon

31  as practicable, but no later than 30 days after the effective

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 1  date, and shall be considered a "use and file" filing.  An

 2  insurer making a "use and file" filing is potentially subject

 3  to an order by the office department to return to

 4  policyholders portions of rates found to be excessive, as

 5  provided in subsection (11).

 6         (2)  Upon receiving notice of a rate filing or rate

 7  change, the office department shall review the rate or rate

 8  change to determine if the rate is excessive, inadequate, or

 9  unfairly discriminatory.  In making that determination, the

10  office department shall in accordance with generally accepted

11  and reasonable actuarial techniques consider the following

12  factors:

13         (a)  Past and prospective loss experience within and

14  outside this state.

15         (b)  The past and prospective expenses.

16         (c)  The degree of competition among insurers for the

17  risk insured.

18         (d)  Investment income reasonably expected by the

19  insurer, consistent with the insurer's investment practices,

20  from investable premiums anticipated in the filing, plus any

21  other expected income from currently invested assets

22  representing the amount expected on unearned premium reserves

23  and loss reserves.  Such investment income shall not include

24  income from invested surplus.  The commission department may

25  adopt promulgate rules utilizing reasonable techniques of

26  actuarial science and economics to specify the manner in which

27  insurers shall calculate investment income attributable to

28  motor vehicle insurance policies written in this state and the

29  manner in which such investment income is used in the

30  calculation of insurance rates.  Such manner shall contemplate

31  the use of a positive underwriting profit allowance in the

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 1  rates that will be compatible with a reasonable rate of return

 2  plus provisions for contingencies. The total of the profit and

 3  contingency factor as specified in the filing shall be

 4  utilized in computing excess profits in conjunction with s.

 5  627.066. In adopting promulgating such rules, the commission

 6  department shall in all instances adhere to and implement the

 7  provisions of this paragraph.

 8         (e)  The reasonableness of the judgment reflected in

 9  the filing.

10         (f)  Dividends, savings, or unabsorbed premium deposits

11  allowed or returned to Florida policyholders, members, or

12  subscribers.

13         (g)  The cost of repairs to motor vehicles.

14         (h)  The cost of medical services, if applicable.

15         (i)  The adequacy of loss reserves.

16         (j)  The cost of reinsurance.

17         (k)  Trend factors, including trends in actual losses

18  per insured unit for the insurer making the filing.

19         (l)  Other relevant factors which impact upon the

20  frequency or severity of claims or upon expenses.

21         (5)

22         (b)  The office has Insurance Commissioner shall have

23  the responsibility to ensure that rates for private passenger

24  vehicle insurance are adequate.  To that end, the commission

25  department shall adopt promulgate rules and regulations

26  establishing standards defining inadequate rates on private

27  passenger vehicle insurance as defined in s. 627.041(8).  In

28  the event that the office department finds that a rate or rate

29  change is inadequate, the office department shall order that a

30  new rate or rate schedule be thereafter filed by the insurer

31  and shall further provide information as to the manner in

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 1  which noncompliance of the standards may be corrected.  When a

 2  violation of this provision occurs, the office department

 3  shall impose an administrative fine pursuant to s. 624.4211.

 4         (9)  In reviewing the rate or rate change filed, the

 5  office department may require the insurer to provide at the

 6  insurer's expense all information necessary to evaluate the

 7  condition of the company and the reasonableness of the filing

 8  according to the criteria enumerated herein.

 9         (10)  The office department may, at any time, review a

10  rate or rate change, the pertinent records of the insurer, and

11  market conditions; and, if the office department finds on a

12  preliminary basis that the rate or rate change may be

13  excessive, inadequate, or unfairly discriminatory, the office

14  department shall so notify the insurer.  However, the office

15  department may not disapprove as excessive any rate for which

16  it has given final approval or which has been deemed approved

17  for a period of 1 year after the effective date of the filing

18  unless the office department finds that a material

19  misrepresentation or material error was made by the insurer or

20  was contained in the filing.  Upon being so notified, the

21  insurer or rating organization shall, within 60 days, file

22  with the office department all information which, in the

23  belief of the insurer or organization, proves the

24  reasonableness, adequacy, and fairness of the rate or rate

25  change.  In such instances and in any administrative

26  proceeding relating to the legality of the rate, the insurer

27  or rating organization shall carry the burden of proof by a

28  preponderance of the evidence to show that the rate is not

29  excessive, inadequate, or unfairly discriminatory.  After the

30  office department notifies an insurer that a rate may be

31  excessive, inadequate, or unfairly discriminatory, unless the

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 1  office department withdraws the notification, the insurer

 2  shall not increase the rate until the earlier of 120 days

 3  after the date the notification was provided or 180 days after

 4  the date of the implementation of the rate.  The office

 5  department may, subject to chapter 120, disapprove without the

 6  60-day notification any rate increase filed by an insurer

 7  within the prohibited time period or during the time that the

 8  legality of the increased rate is being contested.

 9         (11)  In the event the office department finds that a

10  rate or rate change is excessive, inadequate, or unfairly

11  discriminatory, the office department shall issue an order of

12  disapproval specifying that a new rate or rate schedule which

13  responds to the findings of the office department be filed by

14  the insurer.  The office department shall further order for

15  any "use and file" filing made in accordance with paragraph

16  (1)(b), that premiums charged each policyholder constituting

17  the portion of the rate above that which was actuarially

18  justified be returned to such policyholder in the form of a

19  credit or refund. If the office department finds that an

20  insurer's rate or rate change is inadequate, the new rate or

21  rate schedule filed with the office department in response to

22  such a finding shall be applicable only to new or renewal

23  business of the insurer written on or after the effective date

24  of the responsive filing.

25         (13)

26         (b)  The submission of rates, rating schedules, and

27  rating manuals to the office department by a licensed rating

28  organization of which an insurer is a member or subscriber

29  will be sufficient compliance with this subsection for any

30  insurer maintaining membership or subscribership in such

31  organization, to the extent that the insurer uses the rates,

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 1  rating schedules, and rating manuals of such organization.

 2  All such information shall be available for public inspection,

 3  upon receipt by the office department, during usual business

 4  hours.

 5         Section 1071.  Subsection (1) of section 627.0652,

 6  Florida Statutes, is amended to read:

 7         627.0652  Insurance discounts for certain persons

 8  completing safety course.--

 9         (1)  Any rates, rating schedules, or rating manuals for

10  the liability, personal injury protection, and collision

11  coverages of a motor vehicle insurance policy filed with the

12  office department shall provide for an appropriate reduction

13  in premium charges as to such coverages when the principal

14  operator on the covered vehicle is an insured 55 years of age

15  or older who has successfully completed a motor vehicle

16  accident prevention course approved by the Department of

17  Highway Safety and Motor Vehicles.  Any discount used by an

18  insurer is presumed to be appropriate unless credible data

19  demonstrates otherwise.

20         Section 1072.  Section 627.0653, Florida Statutes, is

21  amended to read:

22         627.0653  Insurance discounts for specified motor

23  vehicle equipment.--

24         (1)  Any rates, rating schedules, or rating manuals for

25  the liability, personal injury protection, and collision

26  coverages of a motor vehicle insurance policy filed with the

27  office department shall provide a premium discount if the

28  insured vehicle is equipped with factory-installed, four-wheel

29  antilock brakes.

30         (2)  Each insurer writing motor vehicle comprehensive

31  coverage in this state shall include in its rating manual

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 1  discount provisions for comprehensive coverage which

 2  specifically relate to an antitheft device or vehicle recovery

 3  system utilized in the insured vehicle which are factory

 4  installed or approved by the office department.  The

 5  commission department shall adopt, by rule, procedures under

 6  which manufacturers, distributors, or sellers may apply to the

 7  office department for approval of non-factory-installed

 8  devices under this subsection.  The rules must include, at a

 9  minimum, the test results that must accompany the application

10  and the standards for approval.

11         (3)  Any rates, rating schedules, or rating manuals for

12  personal injury protection coverage and medical payments

13  coverage, if offered, of a motor vehicle insurance policy

14  filed with the office department shall provide a premium

15  discount if the insured vehicle is equipped with one or more

16  air bags which are factory installed.

17         (4)  The removal of a discount or credit does not

18  constitute the imposition of, or request for, additional

19  premium or a surcharge if the basis for the discount or credit

20  no longer exists or is substantially eliminated.

21         (5)  Each insurer writing motor vehicle comprehensive

22  coverage in this state may provide a premium discount for this

23  coverage if the insured vehicle has the complete

24  manufacturer's vehicle identification number permanently

25  etched on the windshield and all windows of the vehicle.  The

26  etching must be by a tool or process that does not destroy the

27  integrity of the glass or visibility for the operator of the

28  motor vehicle.  The identification numbers and letters must be

29  at least  1/4  inch in height.  A sticker may identify the

30  presence of this identification system.  The commission

31  

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 1  department may, by rule, set forth appropriate guidelines to

 2  implement this subsection.

 3         Section 1073.  Section 627.06535, Florida Statutes, is

 4  amended to read:

 5         627.06535  Electric vehicles; restrictions on imposing

 6  surcharges.--An insurer may not impose a surcharge on the

 7  premium for motor vehicle insurance written on an electric

 8  vehicle, as defined in s. 320.01, if the surcharge is based on

 9  a factor such as new technology, passenger payload,

10  weight-to-horsepower ratio, or types of materials, including

11  composite materials or aluminum, used to manufacture the

12  vehicle, unless the office Department of Insurance determines

13  from actuarial data submitted to it that the surcharge is

14  justified.

15         Section 1074.  Subsections (2), (7), (10), (11), and

16  (13) of section 627.066, Florida Statutes, are amended to

17  read:

18         627.066  Excessive profits for motor vehicle insurance

19  prohibited.--

20         (2)  Each Florida private passenger automobile insurer

21  group shall file with the office department, prior to July 1

22  of each year on forms prescribed by the commission department,

23  the following data for Florida private passenger automobile

24  business.  The data filed for the group shall be a

25  consolidation of the data of the individual insurers of the

26  group. The data shall include both voluntary and joint

27  underwriting association business, as follows:

28         (a)  Calendar-year total limits earned premium.

29         (b)  Accident-year incurred losses and loss adjustment

30  expenses.

31  

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 1         (c)  The administrative and selling expenses incurred

 2  in this state or allocated to this state for the calendar

 3  year.

 4         (d)  Policyholder dividends incurred during the

 5  applicable calendar year.

 6         (7)  If the insurer group has realized an excessive

 7  profit, the office department shall order a return of the

 8  excessive amounts after affording the insurer group an

 9  opportunity for hearing and otherwise complying with the

10  requirements of chapter 120.  Such excessive amounts shall be

11  refunded in all instances unless the insurer group

12  affirmatively demonstrates to the office department that the

13  refund of the excessive amounts will render a member of the

14  insurer group financially impaired or will render it insolvent

15  under the provisions of the Florida Insurance Code.

16         (10)(a)  Cash refunds to policyholders may be rounded

17  to the nearest dollar.

18         (b)  Data in required reports to the office department

19  may be rounded to the nearest dollar.

20         (c)  Rounding, if elected by the insurer group, shall

21  be applied consistently.

22         (11)(a)  Refunds shall be completed in one of the

23  following ways:

24         1.  If the insurer group elects to make a cash refund,

25  the refund shall be completed within 60 days of entry of a

26  final order indicating that excessive profits have been

27  realized.

28         2.  If the insurer group elects to make refunds in the

29  form of a credit to renewal policies, such credits shall be

30  applied to policy renewal premium notices which are forwarded

31  to insureds more than 60 calendar days after entry of a final

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 1  order indicating that excessive profits have been realized.

 2  If an insurer group has made this election but an insured

 3  thereafter cancels his or her policy or otherwise allows the

 4  policy to terminate, the insurer group shall make a cash

 5  refund not later than 60 days after termination of such

 6  coverage.

 7         (b)  Upon completion of the renewal credits or refund

 8  payments, the insurer group shall immediately certify to the

 9  office department that the refunds have been made.

10         (13)  Since it appears to the Legislature that private

11  passenger automobile insurer groups have realized excessive

12  profits during all or part of the years 1977, 1978, and 1979

13  and that such profits were realized in part due to statutory

14  changes for which rates were not adequately adjusted, it is

15  the desire and intent of the Legislature that the provisions

16  of this section, as amended by chapter 80-236, Laws of

17  Florida, shall apply retroactively to excessive profits

18  realized during the years 1977, 1978, and 1979. In the event

19  that such retroactive application is judicially determined to

20  be unconstitutional, it is the intent of the Legislature that

21  the act be given prospective application as stated

22  hereinafter.  Prior to July 1, 1982, the data required by this

23  section shall be submitted to the department for the years

24  1979, 1980, and 1981.  Excessive profits shall be calculated

25  in accordance with the provisions of this section.  However,

26  only the excessive profits realized by the insurer group in

27  1981 shall be refunded to policyholders, and such refunds

28  shall be made in accordance with this section. Prior to July

29  1, 1983, the data required by this section shall be submitted

30  to the department for the years 1980, 1981, and 1982.

31  Excessive profits shall be calculated in accordance with this

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 1  section; however, refunds shall only be made for excessive

 2  profits realized in the years 1981 and 1982.  Thereafter,

 3  excessive profits shall be calculated and refunded on the

 4  basis of 3 years as set forth in this section.

 5         Section 1075.  Subsection (4) of section 627.072,

 6  Florida Statutes, is amended to read:

 7         627.072  Making and use of rates.--

 8         (4)(a)  In the case of workers' compensation and

 9  employer's liability insurance, the office department shall

10  consider utilizing the following methodology in rate

11  determinations: Premiums, expenses, and expected claim costs

12  would be discounted to a common point of time, such as the

13  initial point of a policy year, in the determination of rates;

14  the cash-flow pattern of premiums, expenses, and claim costs

15  would be determined initially by using data from 8 to 10 of

16  the largest insurers writing workers' compensation insurance

17  in the state; such insurers may be selected for their

18  statistical ability to report the data on an accident-year

19  basis and in accordance with subparagraphs (b)1., 2., and 3.,

20  for at least 2 1/2  years; such a cash-flow pattern would be

21  modified when necessary in accordance with the data and

22  whenever a radical change in the payout pattern is expected in

23  the policy year under consideration.

24         (b)  If the methodology set forth in paragraph (a) is

25  utilized, to facilitate the determination of such a cash-flow

26  pattern methodology:

27         1.  Each insurer shall include in its statistical

28  reporting to the rating bureau and the office department the

29  accident year by calendar quarter data for paid-claim costs;

30         2.  Each insurer shall submit financial reports to the

31  rating bureau and the office department which shall include

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 1  total incurred claim amounts and paid-claim amounts by policy

 2  year and by injury types as of December 31 of each calendar

 3  year; and

 4         3.  Each insurer shall submit to the rating bureau and

 5  the office department paid-premium data on an individual risk

 6  basis in which risks are to be subdivided by premium size as

 7  follows:

 8  

 9  Number of Risks in

10    Premium Range                          Standard Premium Size

11  

12  ...(to be filled in by carrier)...                   $300--999

13  ...(to be filled in by carrier)...                1,000--4,999

14  ...(to be filled in by carrier)...               5,000--49,999

15  ...(to be filled in by carrier)...              50,000--99,999

16  ...(to be filled in by carrier)...             100,000 or more

17  Total:

18         Section 1076.  Section 627.091, Florida Statutes, is

19  amended to read:

20         627.091  Rate filings; workers' compensation and

21  employer's liability insurances.--

22         (1)  As to workers' compensation and employer's

23  liability insurances, every insurer shall file with the office

24  department every manual of classifications, rules, and rates,

25  every rating plan, and every modification of any of the

26  foregoing which it proposes to use. Every insurer is

27  authorized to include deductible provisions in its manual of

28  classifications, rules, and rates. Such deductibles shall in

29  all cases be in a form and manner which is consistent with the

30  underlying purpose of chapter 440.

31  

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 1         (2)  Every such filing shall state the proposed

 2  effective date thereof, and shall indicate the character and

 3  extent of the coverage contemplated.  When a filing is not

 4  accompanied by the information upon which the insurer supports

 5  the filing and the office department does not have sufficient

 6  information to determine whether the filing meets the

 7  applicable requirements of this part, it shall within 15 days

 8  after the date of filing require the insurer to furnish the

 9  information upon which it supports the filing.  The

10  information furnished in support of a filing may include:

11         (a)  The experience or judgment of the insurer or

12  rating organization making the filing;

13         (b)  Its interpretation of any statistical data it

14  relies upon;

15         (c)  The experience of other insurers or rating

16  organizations; or

17         (d)  Any other factors which the insurer or rating

18  organization deems relevant.

19         (3)  A filing and any supporting information shall be

20  open to public inspection as provided in s. 119.07(1).

21         (4)  An insurer may satisfy its obligation to make such

22  filings by becoming a member of, or a subscriber to, a

23  licensed rating organization which makes such filings and by

24  authorizing the office department to accept such filings in

25  its behalf; but nothing contained in this chapter shall be

26  construed as requiring any insurer to become a member or a

27  subscriber to any rating organization.

28         (5)  Pursuant to the provisions of s. 624.3161, the

29  office department may examine the underlying statistical data

30  used in such filings.

31  

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 1         (6)  Whenever the committee of a recognized rating

 2  organization with responsibility for workers' compensation and

 3  employer's liability insurance rates in this state meets to

 4  discuss the necessity for, or a request for, Florida rate

 5  increases or decreases, the determination of Florida rates,

 6  the rates to be requested, and any other matters pertaining

 7  specifically and directly to such Florida rates, such meetings

 8  shall be held in this state and shall be subject to s.

 9  286.011. The committee of such a rating organization shall

10  provide at least 3 weeks' prior notice of such meetings to the

11  office department and shall provide at least 14 days' prior

12  notice of such meetings to the public by publication in the

13  Florida Administrative Weekly.

14         Section 1077.  Section 627.0915, Florida Statutes, is

15  amended to read:

16         627.0915  Rate filings; workers' compensation,

17  drug-free workplace, and safe employers.--The office

18  Department of Insurance shall approve rating plans for

19  workers' compensation insurance that give specific

20  identifiable consideration in the setting of rates to

21  employers that either implement a drug-free workplace program

22  pursuant to rules adopted by the commission Department of

23  Insurance or implement a safety program pursuant to provisions

24  of the rating plan or implement both a drug-free workplace

25  program and a safety program. The plans must be actuarially

26  sound and must state the savings anticipated to result from

27  such drug-testing and safety programs.

28         Section 1078.  Section 627.0916, Florida Statutes, is

29  amended to read:

30         627.0916  Agricultural horse farms.--Notwithstanding

31  any other provision of this chapter to the contrary, any

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 1  rates, rating schedules, or rating manuals for workers'

 2  compensation and employer's liability insurance filed with the

 3  office Department of Insurance shall provide for the rates of

 4  an agricultural horse farm engaged in breeding or training to

 5  be separated into the following three rate classifications and

 6  the premium paid shall be applied proportionately according to

 7  payroll: breeding activity involving stallions; breeding

 8  activity not involving stallions, including but not limited to

 9  boarding and foaling; and training.

10         Section 1079.  Section 627.092, Florida Statutes, is

11  amended to read:

12         627.092  Workers' Compensation Administrator.--There is

13  created within the office Division of Insurer Services of the

14  Department of Insurance the position of Workers' Compensation

15  Administrator to monitor carrier practices in the field of

16  workers' compensation.

17         Section 1080.  Section 627.096, Florida Statutes, is

18  amended to read:

19         627.096  Workers' Compensation Rating Bureau.--

20         (1)  There is created within the office department a

21  Workers' Compensation Rating Bureau, which shall make an

22  investigation and study of all insurers authorized to issue

23  workers' compensation and employer's liability coverage in

24  this state. Such bureau shall study the data, statistics,

25  schedules, or other information as it may deem necessary to

26  assist and advise the office department in its review of

27  filings made by or on behalf of workers' compensation and

28  employer's liability insurers. The commission may adopt

29  department shall have the authority to promulgate rules

30  requiring all workers' compensation and employer's liability

31  insurers to submit to the rating bureau any data, statistics,

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 1  schedules, and other information deemed necessary to the

 2  rating bureau's study and advisement.

 3         (2)  The acquisition by the Department of Management

 4  Services of data processing software, hardware, and services

 5  necessary to carry out the provisions of this act for the

 6  department or office Treasurer's Management Information Center

 7  of the Department of Insurance shall be exempt from the

 8  provisions of part I of chapter 287.

 9         Section 1081.  Section 627.101, Florida Statutes, is

10  amended to read:

11         627.101  When filing becomes effective; workers'

12  compensation and employer's liability insurances.--

13         (1)  The office department shall review filings as to

14  workers' compensation and employer's liability insurances as

15  soon as reasonably possible after they have been made in order

16  to determine whether they meet the applicable requirements of

17  this part. If the office department determines that part of a

18  rate filing does not meet the applicable requirements of this

19  part, it may reject so much of the filing as does not meet

20  these requirements, and approve the remainder of the filing.

21         (2)  The office department shall specifically approve

22  the filing before it becomes effective, unless the office

23  department has concluded it to be in the public interest to

24  hold a public hearing to determine whether the filing meets

25  the requirements of this chapter and has given notice of such

26  hearing to the insurer or rating organization that made the

27  filing, and in which case the effectiveness of the filing

28  shall be subject to the further order of the office department

29  made as provided in s. 627.111.  If the office department

30  specifically disapproves the filing, the provisions of

31  subsection (4) shall apply.

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 1         (3)  An insurer or rating organization may, at the time

 2  it makes a filing with the office department, request a public

 3  hearing thereon. In such event, the office department shall

 4  give notice of the hearing.

 5         (4)  If the office department disapproves a filing, it

 6  shall promptly give notice of such disapproval to the insurer

 7  or rating organization that made the filing, stating the

 8  respects in which it finds that the filing does not meet the

 9  requirements of this chapter. If the office department

10  approves a filing, it shall give prompt notice thereof to the

11  insurer or rating organization that made the filing, and in

12  which case the filing shall become effective upon such

13  approval or upon such subsequent date as may be satisfactory

14  to the office department and the insurer or rating

15  organization that made the filing.

16         Section 1082.  Section 627.111, Florida Statutes, is

17  amended to read:

18         627.111  Effective date of filing.--

19         (1)  If, pursuant to s. 627.101(2), the office

20  department determines to hold a public hearing as to a filing,

21  or it holds such a public hearing pursuant to request therefor

22  under s. 627.101(3), it shall give written notice thereof to

23  the rating organization or insurer that made the filing and

24  shall hold such hearing within 30 days, and not less than 10

25  days prior to the date of the hearing, it shall give written

26  notice of the hearing to the insurer or rating organization

27  that made the filing. The office department may also, in its

28  discretion, give advance public notice of such hearing by

29  publication of notice in one or more daily newspapers of

30  general circulation in this state.

31  

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 1         (2)  If the order of the office department disapproves

 2  the filing, the filing shall not become effective during the

 3  effectiveness of such order. If the order of the office

 4  department approves the filing, the filing shall become

 5  effective upon the date of the order or upon such subsequent

 6  date as may be satisfactory to the insurer or rating

 7  organization that made the filing.

 8         Section 1083.  Section 627.141, Florida Statutes, is

 9  amended to read:

10         627.141  Subsequent disapproval of filing; workers'

11  compensation and employer's liability insurances.--If at any

12  time after a filing has been approved by it or has otherwise

13  become effective the office department finds that the filing

14  no longer meets the requirements of this chapter, it shall

15  issue an order specifying in what respects it finds that such

16  filing fails to meet such requirements and stating when,

17  within a reasonable period thereafter, such filing shall be

18  deemed no longer effective.  The order shall not affect any

19  insurance contract or policy made or issued prior to the

20  expiration of the period set forth in the order.

21         Section 1084.  Subsection (1) of section 627.151,

22  Florida Statutes, is amended to read:

23         627.151  Basis of approval or disapproval of workers'

24  compensation or employer's liability insurance filing; scope

25  of disapproval power.--

26         (1)  In determining at any time whether to approve or

27  disapprove a filing as to workers' compensation or employer's

28  liability insurance, or to permit the filing otherwise to

29  become effective, the office department shall give

30  consideration only to the applicable standards and factors

31  referred to in ss. 627.062 and 627.072.

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 1         Section 1085.  Subsection (1) of section 627.171,

 2  Florida Statutes, is amended to read:

 3         627.171  Excess rates.--

 4         (1)  With written consent of the insured signed prior

 5  to the policy inception date and filed with the insurer, the

 6  insurer may use a rate in excess of the otherwise applicable

 7  filed rate on any specific risk.  The signed consent form must

 8  include the filed rate as well as the excess rate for the risk

 9  insured and a copy of the form must be maintained by the

10  insurer for 3 years and be available for review by the office

11  department.

12         Section 1086.  Paragraph (f) of subsection (2) of

13  section 627.192, Florida Statutes, is amended to read:

14         627.192  Workers' compensation insurance; employee

15  leasing arrangements.--

16         (2)  For purposes of the Florida Insurance Code:

17         (f)  "Premium subject to dispute" means that the

18  insured has provided a written notice of dispute to the

19  insurer or service carrier, has initiated any applicable

20  proceeding for resolving such disputes as prescribed by law or

21  rating organization procedures approved by the office

22  department, or has initiated litigation regarding the premium

23  dispute. The insured must have detailed the specific areas of

24  dispute and provided an estimate of the premium the insured

25  believes to be correct. The insured must have paid any

26  undisputed portion of the bill.

27         Section 1087.  Section 627.211, Florida Statutes, is

28  amended to read:

29         627.211  Deviations; workers' compensation and

30  employer's liability insurances.--

31  

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 1         (1)  Every member or subscriber to a rating

 2  organization shall, as to workers' compensation or employer's

 3  liability insurance, adhere to the filings made on its behalf

 4  by such organization; except that any such insurer may make

 5  written application to the office department for permission to

 6  file a uniform percentage decrease or increase to be applied

 7  to the premiums produced by the rating system so filed for a

 8  kind of insurance, for a class of insurance which is found by

 9  the office department to be a proper rating unit for the

10  application of such uniform percentage decrease or increase,

11  or for a subdivision of workers' compensation or employer's

12  liability insurance:

13         (a)  Comprised of a group of manual classifications

14  which is treated as a separate unit for ratemaking purposes;

15  or

16         (b)  For which separate expense provisions are included

17  in the filings of the rating organization.

18  

19  Such application shall specify the basis for the modification

20  and shall be accompanied by the data upon which the applicant

21  relies.  A copy of the application and data shall be sent

22  simultaneously to the rating organization.

23         (2)  Every member or subscriber to a rating

24  organization may, as to workers' compensation and employer's

25  liability insurance, file a plan or plans to use deviations

26  that vary according to factors present in each insured's

27  individual risk.  The insurer that files for the deviations

28  provided in this subsection shall file the qualifications for

29  the plans, schedules of rating factors, and the maximum

30  deviation factors which shall be subject to the approval of

31  the office department pursuant to s. 627.091. The actual

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 1  deviation which shall be used for each insured that qualifies

 2  under this subsection may not exceed the maximum filed

 3  deviation under that plan and shall be based on the merits of

 4  each insured's individual risk as determined by using

 5  schedules of rating factors which shall be applied uniformly.

 6  Insurers shall maintain statistical data in accordance with

 7  the schedule of rating factors.  Such data shall be available

 8  to support the continued use of such varying deviations.

 9         (3)  In considering an application for the deviation,

10  the office department shall give consideration to the

11  applicable principles for ratemaking as set forth in ss.

12  627.062 and 627.072, the financial condition of the insurer,

13  and the impact of the deviation on the current market

14  conditions including the composition of the market, the

15  stability of rates, and the level of competition in the

16  market.  In evaluating the financial condition of the insurer,

17  the office department may consider: (1) the insurer's audited

18  financial statements and whether the statements provide

19  unqualified opinions or contain significant qualifications or

20  "subject to" provisions; (2) any independent or other

21  actuarial certification of loss reserves; (3) whether workers'

22  compensation and employer's liability reserves are above the

23  midpoint or best estimate of the actuary's reserve range

24  estimate; (4) the adequacy of the proposed rate;  (5)

25  historical experience demonstrating the profitability of the

26  insurer;  (6) the existence of excess or other reinsurance

27  that contains a sufficiently low attachment point and maximums

28  that provide adequate protection to the insurer; and (7) other

29  factors considered relevant to the financial condition of the

30  insurer by the office department. The office department shall

31  approve the deviation if it finds it to be justified, it would

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 1  not endanger the financial condition of the insurer, it would

 2  not adversely affect the current market conditions including

 3  the composition of the market, the stability of rates, and the

 4  level of competition in the market, and that the deviation

 5  would not constitute predatory pricing.  It shall disapprove

 6  the deviation if it finds that the resulting premiums would be

 7  excessive, inadequate, or unfairly discriminatory, would

 8  endanger the financial condition of the insurer, or would

 9  adversely affect current market conditions including the

10  composition of the marketplace, the stability of rates, and

11  the level of competition in the market, or would result in

12  predatory pricing.  The insurer may not use a deviation unless

13  the deviation is specifically approved by the office

14  department.

15         (4)  Each deviation permitted to be filed shall be

16  effective for a period of 1 year unless terminated, extended,

17  or modified with the approval of the office department. If at

18  any time after a deviation has been approved the office

19  department finds that the deviation no longer meets the

20  requirements of this code, it shall notify the insurer in what

21  respects it finds that the deviation fails to meet such

22  requirements and specify when, within a reasonable period

23  thereafter, the deviation shall be deemed no longer effective.

24  The notice shall not affect any insurance contract or policy

25  made or issued prior to the expiration of the period set forth

26  in the notice.

27         (5)  For purposes of this section, the office

28  department, when considering the experience of any insurer,

29  shall consider the experience of any predecessor insurer when

30  the business and the liabilities of the predecessor insurer

31  were assumed by the insurer pursuant to an order of the office

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 1  department which approves the assumption of the business and

 2  the liabilities.

 3         Section 1088.  Section 627.212, Florida Statutes, is

 4  amended to read:

 5         627.212  Workplace safety program surcharge.--The

 6  office department shall approve a rating plan for workers'

 7  compensation coverage insurance that provides for carriers

 8  voluntarily to impose a surcharge of no more than 10 percent

 9  on the premium of a policyholder or fund member if that

10  policyholder or fund member has been identified by the

11  department of Labor and Employment Security as having been

12  required to implement a safety program and having failed to

13  establish or maintain, either in whole or in part, a safety

14  program. The department division shall adopt rules prescribing

15  the criteria for the employee safety programs.

16         Section 1089.  Paragraph (a) of subsection (1),

17  subsection (9), paragraph (b) of subsection (11), and

18  paragraph (b) of subsection (12) of section 627.215, Florida

19  Statutes, are amended to read:

20         627.215  Excessive profits for workers' compensation,

21  employer's liability, commercial property, and commercial

22  casualty insurance prohibited.--

23         (1)(a)  Each insurer group writing workers'

24  compensation and employer's liability insurance as defined in

25  s. 624.605(1)(c), commercial property insurance as defined in

26  s. 627.0625, commercial umbrella liability insurance as

27  defined in s. 627.0625, or commercial casualty insurance as

28  defined in s. 627.0625 shall file with the office department

29  prior to July 1 of each year, on a form prescribed by the

30  commission department, the following data for the component

31  types of such insurance as provided in the form:

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 1         1.  Calendar-year earned premium.

 2         2.  Accident-year incurred losses and loss adjustment

 3  expenses.

 4         3.  The administrative and selling expenses incurred in

 5  this state or allocated to this state for the calendar year.

 6         4.  Policyholder dividends applicable to the calendar

 7  year.

 8  

 9  Nothing herein is intended to prohibit an insurer from filing

10  on a calendar-year basis.

11         (9)  If the insurer group has realized an excessive

12  profit, the office department shall order a return of the

13  excessive amounts after affording the insurer group an

14  opportunity for hearing and otherwise complying with the

15  requirements of chapter 120. Such excessive amounts shall be

16  refunded in all instances unless the insurer group

17  affirmatively demonstrates to the office department that the

18  refund of the excessive amounts will render a member of the

19  insurer group financially impaired or will render it insolvent

20  under the provisions of the Florida Insurance Code.

21         (11)

22         (b)  Data in required reports to the office department

23  may be rounded to the nearest dollar.

24         (12)

25         (b)  Upon completion of the renewal credits or refund

26  payments, the insurer group shall immediately certify to the

27  office department that the refunds have been made.

28         Section 1090.  Section 627.221, Florida Statutes, is

29  amended to read:

30         627.221  Rating organizations; licensing; fee.--

31  

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 1         (1)  A person, whether located within or outside this

 2  state, may make application to the office department for a

 3  license as a rating organization. As to property or inland

 4  marine insurance, the application shall be for such kinds of

 5  insurance or subdivisions thereof or classes of risk or a part

 6  or combination thereof as are specified in the application. As

 7  to casualty and surety insurances, the application shall be

 8  for such kinds of insurance or subdivisions thereof as are

 9  specified in the application. The applicant shall file with

10  its application:

11         (a)  A copy of its constitution, its articles of

12  agreement or association or its certificate of incorporation,

13  and of its bylaws, rules, and regulations governing the

14  conduct of its business;

15         (b)  A list of its members and subscribers;

16         (c)  The name and address of a resident of this state

17  upon whom notices or orders of the office department or

18  process affecting such rating organization may be served; and

19         (d)  A statement of its qualifications as a rating

20  organization.

21  

22  If the office department finds that the applicant is

23  competent, trustworthy, and otherwise qualified to act as a

24  rating organization and that its constitution, articles of

25  agreement or association or certificate of incorporation, and

26  its bylaws, rules, and regulations governing the conduct of

27  its business conform to the requirements of law, it shall

28  issue a license specifying (in the case of a casualty or

29  surety rating organization) the kinds of insurance or

30  subdivisions thereof, or (in the case of a property insurance

31  rating organization) the kinds of insurance or subdivisions

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 1  thereof or classes of risk or a part or combination thereof,

 2  for which the applicant is authorized to act as a rating

 3  organization.

 4         (2)  Licenses issued pursuant to this section shall

 5  expire on the September 30 next following date of issuance and

 6  shall be subject to annual renewal.

 7         (3)  The fee for the license shall be in the amount

 8  specified therefor in s. 624.501. This fee, when collected,

 9  shall be deposited to the credit of the Insurance

10  Commissioner's Regulatory Trust Fund.

11         Section 1091.  Section 627.231, Florida Statutes, is

12  amended to read:

13         627.231  Subscribers to rating organizations.--

14         (1)  Subject to rules and regulations which have been

15  approved by the office department as reasonable, each rating

16  organization shall permit any insurer, not a member, to

17  subscribe to its rating services.  As to property and marine

18  rating organizations, an insurer shall be so permitted to

19  subscribe to rating services for any kind of insurance,

20  subdivision thereof, or class of risk or a part or combination

21  thereof for which the rating organization is authorized so to

22  act. As to casualty and surety rating organizations, an

23  insurer shall be so permitted to subscribe to rating services

24  for any kind of insurance or subdivision thereof for which the

25  rating organization is authorized so to act.  The rating

26  organization shall give notice to subscribers of proposed

27  changes in such rules and regulations.

28         (2)  The reasonableness of any rule or regulation in

29  its application to subscribers, or the refusal of any rating

30  organization to admit an insurer as a subscriber, shall, at

31  the request of any subscriber or any such insurer, be reviewed

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 1  by the office department. If the office department finds that

 2  such rule or regulation is unreasonable in its application to

 3  subscribers, it shall order that such rule or regulation shall

 4  not be applicable to subscribers. If the rating organization

 5  fails to grant or reject an insurer's application for

 6  subscribership within 30 days after it was made, the insurer

 7  may request a review by the office department as if the

 8  application had been rejected. If the office department finds

 9  that the insurer has been refused admittance to the rating

10  organization as a subscriber without justification, it shall

11  order the rating organization to admit the insurer as a

12  subscriber.  If it finds that the action of the rating

13  organization was justified, it shall make an order affirming

14  its action.

15         (3)  Each rating organization shall furnish its rating

16  services without discrimination to its members and

17  subscribers.

18         Section 1092.  Section 627.241, Florida Statutes, is

19  amended to read:

20         627.241  Notice of changes.--Every rating organization

21  shall notify the office department promptly of every change

22  in:

23         (1)  Its constitution, its articles of agreement or

24  association, or its certificate of incorporation, and its

25  bylaws, rules and regulations governing the conduct of its

26  business;

27         (2)  Its list of members and subscribers; and

28         (3)  The name and address of the resident of this state

29  designated by it upon whom notices or orders of the office

30  department or process affecting such rating organization may

31  be served.

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 1         Section 1093.  Section 627.281, Florida Statutes, is

 2  amended to read:

 3         627.281  Appeal from rating organization; workers'

 4  compensation and employer's liability insurance filings.--

 5         (1)  Any member or subscriber to a rating organization

 6  may appeal to the office department from the action or

 7  decision of such rating organization in approving or rejecting

 8  any proposed change in or addition to the workers'

 9  compensation or employer's liability insurance filings of such

10  rating organization, and the office department shall issue an

11  order approving the decision of such rating organization or

12  directing it to give further consideration to such proposal.

13  If such appeal is from the action or decision of the rating

14  organization in rejecting a proposed addition to its filings,

15  the office department may, in the event it finds that such

16  action or decision was unreasonable, issue an order directing

17  the rating organization to make an addition to its filings, on

18  behalf of its members and subscribers, in a manner consistent

19  with its findings, within a reasonable time after the issuance

20  of such order.

21         (2)  If such appeal is based upon the failure of the

22  rating organization to make a filing on behalf of such member

23  or subscriber which is based on a system of expense provisions

24  which differs, in accordance with the right granted in s.

25  627.072(2), from the system of expense provisions included in

26  a filing made by the rating organization, the office

27  department shall, if it grants the appeal, order the rating

28  organization to make the requested filing for use by the

29  appellant. In deciding such appeal, the office department

30  shall apply the applicable standards set forth in ss. 627.062

31  and 627.072.

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 1         Section 1094.  Subsection (2) of section 627.291,

 2  Florida Statutes, is amended to read:

 3         627.291  Information to be furnished insureds; appeal

 4  by insureds; workers' compensation and employer's liability

 5  insurances.--

 6         (2)  As to workers' compensation and employer's

 7  liability insurances, every rating organization and every

 8  insurer which makes its own rates shall provide within this

 9  state reasonable means whereby any person aggrieved by the

10  application of its rating system may be heard, in person or by

11  his or her authorized representative, on his or her written

12  request to review the manner in which such rating system has

13  been applied in connection with the insurance afforded him or

14  her.  If the rating organization or insurer fails to grant or

15  rejects such request within 30 days after it is made, the

16  applicant may proceed in the same manner as if his or her

17  application had been rejected.  Any party affected by the

18  action of such rating organization or insurer on such request

19  may, within 30 days after written notice of such action,

20  appeal to the office department, which may affirm or reverse

21  such action.

22         Section 1095.  Section 627.301, Florida Statutes, is

23  amended to read:

24         627.301  Advisory organizations.--

25         (1)  No advisory organization shall conduct its

26  operations in this state unless and until it has filed with

27  the office department:

28         (a)  A copy of its constitution, articles of

29  incorporation, articles of agreement or of association, and

30  bylaws or rules and regulations governing its activities, all

31  duly certified by the custodian of the originals thereof;

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 1         (b)  A list of its members and subscribers; and

 2         (c)  The name and address of a resident of this state

 3  upon whom notices or orders of the office department or

 4  process may be served.

 5         (2)  Every such advisory organization shall notify the

 6  office department promptly of every change in:

 7         (a)  Its constitution;

 8         (b)  Its articles of incorporation, agreement, or

 9  association;

10         (c)  Its bylaws, rules and regulations governing the

11  conduct of its business;

12         (d)  The list of members and subscribers; and

13         (e)  The name and address of the resident of this state

14  designated by it upon whom notices or orders of the office

15  department or process affecting such organization may be

16  served.

17         (3)  No such advisory organization shall engage in any

18  unfair or unreasonable practice with respect to such

19  activities.

20         Section 1096.  Subsections (2) and (3) and paragraphs

21  (a), (b), (c), (e), (f), and (g) of subsection (4) of section

22  627.311, Florida Statutes, are amended to read:

23         627.311  Joint underwriters and joint reinsurers.--

24         (2)  If the office department finds that any activity

25  or practice of any such group, association, or other

26  organization is unfair or unreasonable or otherwise

27  inconsistent with the provisions of this chapter, it may issue

28  a written order specifying in what respects such activity or

29  practice is unfair or unreasonable or otherwise inconsistent

30  with the provisions of this chapter, and requiring the

31  discontinuance of such activity or practice.

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 1         (3)  The office department may, after consultation with

 2  insurers licensed to write automobile insurance in this state,

 3  approve a joint underwriting plan for purposes of equitable

 4  apportionment or sharing among insurers of automobile

 5  liability insurance and other motor vehicle insurance, as an

 6  alternate to the plan required in s. 627.351(1). All insurers

 7  authorized to write automobile insurance in this state shall

 8  subscribe to the plan and participate therein. The plan shall

 9  be subject to continuous review by the office department which

10  may at any time disapprove the entire plan or any part thereof

11  if it determines that conditions have changed since prior

12  approval and that in view of the purposes of the plan changes

13  are warranted. Any disapproval by the office department shall

14  be subject to the provisions of chapter 120.  If adopted, the

15  plan and the association created under the plan:

16         (a)  Must be subject to all provisions of s.

17  627.351(1), except apportionment of applicants.

18         (b)  May provide for one or more designated insurers,

19  able and willing to provide policy and claims service, to act

20  on behalf of all other insurers to provide insurance for

21  applicants who are in good faith entitled to, but unable to,

22  procure insurance through the voluntary insurance market at

23  standard rates.

24         (c)  Must provide that designated insurers will issue

25  policies of insurance and provide policyholder and claims

26  service on behalf of all insurers for the joint underwriting

27  association.

28         (d)  Must provide for the equitable apportionment among

29  insurers of losses and expenses incurred.

30         (e)  Must provide that the joint underwriting

31  association will operate subject to the supervision and

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 1  approval of a board of governors consisting of 11 individuals,

 2  including 1 who will be elected as chair. Five members of the

 3  board must be appointed by the Chief Financial Officer

 4  Insurance Commissioner. Two of the Chief Financial Officer's

 5  commissioner's appointees must be chosen from the insurance

 6  industry.  Any board member appointed by the Chief Financial

 7  Officer Insurance Commissioner may be removed and replaced by

 8  her or him at any time without cause. Six members of the board

 9  must be appointed by the participating insurers, two of whom

10  must be from the insurance agents' associations. All board

11  members, including the chair, must be appointed to serve for

12  2-year terms beginning annually on a date designated by the

13  plan.

14         (f)  Must provide that an agent appointed to a

15  servicing carrier must be a licensed general lines agent of an

16  insurer which is authorized to write automobile liability and

17  physical damage insurance in the state and which is actively

18  writing such coverage in the county in which the agent is

19  located, or the immediately adjoining counties, or an agent

20  who places a volume of other property and casualty insurance

21  in an amount equal to the premium volume placed with the

22  Florida Joint Underwriting Association. The office department

23  may, however, determine that an agent may be appointed to a

24  servicing carrier if, after public hearing, the office

25  department finds that consumers in the agent's operating area

26  would not have adequate and reasonable access to the purchase

27  of automobile insurance if the agent were not appointed to a

28  servicing carrier.

29         (g)  Must make available noncancelable coverage as

30  provided in s. 627.7275(2).

31  

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 1         (h)  Must provide for the furnishing of a list of

 2  insureds and their mailing addresses upon the request of a

 3  member of the association or an insurance agent licensed to

 4  place business with an association member.  The list must

 5  indicate whether the insured is currently receiving a good

 6  driver discount from the association. The plan may charge a

 7  reasonable fee to cover the cost incurred in providing the

 8  list.

 9         (i)  Must not provide a renewal credit or discount or

10  any other inducement designed to retain a risk.

11         (j)  Must not provide any other good driver credit or

12  discount that is not actuarially sound.  In addition to other

13  criteria that the plan may specify, to be eligible for a good

14  driver credit, an insured must not have any criminal traffic

15  violations within the most recent 36-month period preceding

16  the date the discount is received.

17         (k)  Shall have no liability, and no cause of action of

18  any nature shall arise against, any member insurer or its

19  agents or employees, agents or employees of the association,

20  members of the board of governors of the association, the

21  Chief Financial Officer, or the office department or its

22  representatives, for any action taken by them in the

23  performance of their duties or responsibilities under this

24  subsection. Such immunity does not apply to actions for or

25  arising out of breach of any contract or agreement pertaining

26  to insurance, or any willful tort.

27         (l)1.  Shall be subject to the public records

28  requirements of chapter 119 and the public meeting

29  requirements of s. 286.011.  However, the following records of

30  the Florida Automobile Joint Underwriting Association are

31  

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 1  confidential and exempt from s. 119.07(1) and s. 24(a), Art. I

 2  of the State Constitution:

 3         a.  Underwriting files, except that a policyholder or

 4  an applicant shall have access to his or her own underwriting

 5  files.

 6         b.  Claims files, until termination of all litigation

 7  and settlement of all claims arising out of the same incident,

 8  although portions of the claims files may remain exempt, as

 9  otherwise provided by law. Confidential and exempt claims file

10  records may be released to other governmental agencies upon

11  written request and demonstration of need; such records held

12  by the receiving agency remain confidential and exempt as

13  provided by this paragraph.

14         c.  Records obtained or generated by an internal

15  auditor pursuant to a routine audit, until the audit is

16  completed or, if the audit is conducted as part of an

17  investigation, until the investigation is closed or ceases to

18  be active.  An investigation is considered "active" while the

19  investigation is being conducted with a reasonable, good faith

20  belief that it could lead to the filing of administrative,

21  civil, or criminal proceedings.

22         d.  Matters reasonably encompassed in privileged

23  attorney-client communications.

24         e.  Proprietary information licensed to the association

25  under contract when the contract provides for the

26  confidentiality of such proprietary information.

27         f.  All information relating to the medical condition

28  or medical status of an association employee which is not

29  relevant to the employee's capacity to perform his or her

30  duties, except as otherwise provided in this paragraph.

31  Information which is exempt shall include, but is not limited

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 1  to, information relating to workers' compensation, insurance

 2  benefits, and retirement or disability benefits.

 3         g.  All records relative to an employee's participation

 4  in an employee assistance program designed to assist any

 5  employee who has a behavioral or medical disorder, substance

 6  abuse problem, or emotional difficulty which affects the

 7  employee's job performance, except as otherwise provided in s.

 8  112.0455(11).

 9         h.  Information relating to negotiations for financing,

10  reinsurance, depopulation, or contractual services, until the

11  conclusion of the negotiations.

12         i.  Minutes of closed meetings regarding underwriting

13  files, and minutes of closed meetings regarding an open claims

14  file until termination of all litigation and settlement of all

15  claims with regard to that claim, except that information

16  otherwise confidential or exempt by law must be redacted.

17  

18  When an authorized insurer is considering underwriting a risk

19  insured by the association, relevant underwriting files and

20  confidential claims files may be released to the insurer

21  provided the insurer agrees in writing, notarized and under

22  oath, to maintain the confidentiality of such files.  When a

23  file is transferred to an insurer, that file is no longer a

24  public record because it is not held by an agency subject to

25  the provisions of the public records law. The association may

26  make the following information obtained from underwriting

27  files and confidential claims files available to licensed

28  general lines insurance agents:  name, address, and telephone

29  number of the automobile owner or insured; location of the

30  risk; rating information; loss history; and policy type.  The

31  

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 1  receiving licensed general lines insurance agent must retain

 2  the confidentiality of the information received.

 3         2.  Portions of meetings of the Florida Automobile

 4  Joint Underwriting Association during which confidential

 5  underwriting files or confidential open claims files are

 6  discussed are exempt from the provisions of s. 286.011 and s.

 7  24(b), Art. I of the State Constitution.  All portions of

 8  association meetings which are closed to the public shall be

 9  recorded by a court reporter.  The court reporter shall record

10  the times of commencement and termination of the meeting, all

11  discussion and proceedings, the names of all persons present

12  at any time, and the names of all persons speaking.  No

13  portion of any closed meeting shall be off the record.

14  Subject to the provisions of this paragraph and s.

15  119.07(2)(a), the court reporter's notes of any closed meeting

16  shall be retained by the association for a minimum of 5 years.

17  A copy of the transcript, less any exempt matters, of any

18  closed meeting during which claims are discussed shall become

19  public as to individual claims after settlement of the claim.

20  

21  This paragraph is subject to the Open Government Sunset Review

22  Act of 1995 in accordance with s. 119.15, and shall stand

23  repealed on October 2, 2003, unless reviewed and saved from

24  repeal through reenactment by the Legislature.

25         (4)(a)  Effective upon this act becoming a law, The

26  office department shall, after consultation with insurers,

27  approve a joint underwriting plan of insurers which shall

28  operate as a nonprofit entity. For the purposes of this

29  subsection, the term "insurer" includes group self-insurance

30  funds authorized by s. 624.4621, commercial self-insurance

31  funds authorized by s. 624.462, assessable mutual insurers

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 1  authorized under s. 628.6011, and insurers licensed to write

 2  workers' compensation and employer's liability insurance in

 3  this state. The purpose of the plan is to provide workers'

 4  compensation and employer's liability insurance to applicants

 5  who are required by law to maintain workers' compensation and

 6  employer's liability insurance and who are in good faith

 7  entitled to but who are unable to purchase such insurance

 8  through the voluntary market. The joint underwriting plan

 9  shall issue policies beginning January 1, 1994. The plan must

10  have actuarially sound rates that assure that the plan is

11  self-supporting.

12         (b)  The operation of the plan is subject to the

13  supervision of a 13-member board of governors. The board of

14  governors shall be comprised of:

15         1.  Five of the 20 domestic insurers, as defined in s.

16  624.06(1), having the largest voluntary direct premiums

17  written in this state for workers' compensation and employer's

18  liability insurance, which shall be elected by those 20

19  domestic insurers;

20         2.  Five of the 20 foreign insurers as defined in s.

21  624.06(2) having the largest voluntary direct premiums written

22  in this state for workers' compensation and employer's

23  liability insurance, which shall be elected by those 20

24  foreign insurers;

25         3.  One person, who shall serve as the chair, appointed

26  by the Chief Financial Officer Insurance Commissioner;

27         4.  One person appointed by the largest property and

28  casualty insurance agents' association in this state; and

29         5.  The consumer advocate appointed under s. 627.0613

30  or the consumer advocate's designee.

31  

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 1  Each board member shall serve a 4-year term and may serve

 2  consecutive terms. No board member shall be an insurer which

 3  provides service to the plan or which has an affiliate which

 4  provides services to the plan or which is serviced by a

 5  service company or third-party administrator which provides

 6  services to the plan or which has an affiliate which provides

 7  services to the plan. The minutes, audits, and procedures of

 8  the board of governors are subject to chapter 119.

 9         (c)  The operation of the plan shall be governed by a

10  plan of operation that is prepared at the direction of the

11  board of governors. The plan of operation may be changed at

12  any time by the board of governors or upon request of the

13  office department. The plan of operation and all changes

14  thereto are subject to the approval of the office department.

15  The plan of operation shall:

16         1.  Authorize the board to engage in the activities

17  necessary to implement this subsection, including, but not

18  limited to, borrowing money.

19         2.  Develop criteria for eligibility for coverage by

20  the plan, including, but not limited to, documented rejection

21  by at least two insurers which reasonably assures that

22  insureds covered under the plan are unable to acquire coverage

23  in the voluntary market. Any insured may voluntarily elect to

24  accept coverage from an insurer for a premium equal to or

25  greater than the plan premium if the insurer writing the

26  coverage adheres to the provisions of s. 627.171.

27         3.  Require notice from the agent to the insured at the

28  time of the application for coverage that the application is

29  for coverage with the plan and that coverage may be available

30  through an insurer, group self-insurers' fund, commercial

31  

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 1  self-insurance fund, or assessable mutual insurer through

 2  another agent at a lower cost.

 3         4.  Establish programs to encourage insurers to provide

 4  coverage to applicants of the plan in the voluntary market and

 5  to insureds of the plan, including, but not limited to:

 6         a.  Establishing procedures for an insurer to use in

 7  notifying the plan of the insurer's desire to provide coverage

 8  to applicants to the plan or existing insureds of the plan and

 9  in describing the types of risks in which the insurer is

10  interested. The description of the desired risks must be on a

11  form developed by the plan.

12         b.  Developing forms and procedures that provide an

13  insurer with the information necessary to determine whether

14  the insurer wants to write particular applicants to the plan

15  or insureds of the plan.

16         c.  Developing procedures for notice to the plan and

17  the applicant to the plan or insured of the plan that an

18  insurer will insure the applicant or the insured of the plan,

19  and notice of the cost of the coverage offered; and developing

20  procedures for the selection of an insuring entity by the

21  applicant or insured of the plan.

22         d.  Provide for a market-assistance plan to assist in

23  the placement of employers. All applications for coverage in

24  the plan received 45 days before the effective date for

25  coverage shall be processed through the market-assistance

26  plan. A market-assistance plan specifically designed to serve

27  the needs of small good policyholders as defined by the board

28  must be finalized by January 1, 1994.

29         5.  Provide for policy and claims services to the

30  insureds of the plan of the nature and quality provided for

31  insureds in the voluntary market.

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 1         6.  Provide for the review of applications for coverage

 2  with the plan for reasonableness and accuracy, using any

 3  available historic information regarding the insured.

 4         7.  Provide for procedures for auditing insureds of the

 5  plan which are based on reasonable business judgment and are

 6  designed to maximize the likelihood that the plan will collect

 7  the appropriate premiums.

 8         8.  Authorize the plan to terminate the coverage of and

 9  refuse future coverage for any insured that submits a

10  fraudulent application to the plan or provides fraudulent or

11  grossly erroneous records to the plan or to any service

12  provider of the plan in conjunction with the activities of the

13  plan.

14         9.  Establish service standards for agents who submit

15  business to the plan.

16         10.  Establish criteria and procedures to prohibit any

17  agent who does not adhere to the established service standards

18  from placing business with the plan or receiving, directly or

19  indirectly, any commissions for business placed with the plan.

20         11.  Provide for the establishment of reasonable safety

21  programs for all insureds in the plan.

22         12.  Authorize the plan to terminate the coverage of

23  and refuse future coverage to any insured who fails to pay

24  premiums or surcharges when due; who, at the time of

25  application, is delinquent in payments of workers'

26  compensation or employer's liability insurance premiums or

27  surcharges owed to an insurer, group self-insurers' fund,

28  commercial self-insurance fund, or assessable mutual insurer

29  licensed to write such coverage in this state; or who refuses

30  to substantially comply with any safety programs recommended

31  by the plan.

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 1         13.  Authorize the board of governors to provide the

 2  services required by the plan through staff employed by the

 3  plan, through reasonably compensated service providers who

 4  contract with the plan to provide services as specified by the

 5  board of governors, or through a combination of employees and

 6  service providers.

 7         14.  Provide for service standards for service

 8  providers, methods of determining adherence to those service

 9  standards, incentives and disincentives for service, and

10  procedures for terminating contracts for service providers

11  that fail to adhere to service standards.

12         15.  Provide procedures for selecting service providers

13  and standards for qualification as a service provider that

14  reasonably assure that any service provider selected will

15  continue to operate as an ongoing concern and is capable of

16  providing the specified services in the manner required.

17         16.  Provide for reasonable accounting and

18  data-reporting practices.

19         17.  Provide for annual review of costs associated with

20  the administration and servicing of the policies issued by the

21  plan to determine alternatives by which costs can be reduced.

22         18.  Authorize the acquisition of such excess insurance

23  or reinsurance as is consistent with the purposes of the plan.

24         19.  Provide for an annual report to the office

25  department on a date specified by the office department and

26  containing such information as the office department

27  reasonably requires.

28         20.  Establish multiple rating plans for various

29  classifications of risk which reflect risk of loss, hazard

30  grade, actual losses, size of premium, and compliance with

31  loss control. At least one of such plans must be a

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 1  preferred-rating plan to accommodate small-premium

 2  policyholders with good experience as defined in

 3  sub-subparagraph 22.a.

 4         21.  Establish agent commission schedules.

 5         22.  Establish three subplans as follows:

 6         a.  Subplan "A" must include those insureds whose

 7  annual premium does not exceed $2,500 and who have neither

 8  incurred any lost-time claims nor incurred medical-only claims

 9  exceeding 50 percent of their premium for the immediate 2

10  years.

11         b.  Subplan "B" must include insureds that are

12  employers identified by the board of governors as high-risk

13  employers due solely to the nature of the operations being

14  performed by those insureds and for whom no market exists in

15  the voluntary market, and whose experience modifications are

16  less than 1.00.

17         c.  Subplan "C" must include all other insureds within

18  the plan.

19         (e)  The plan shall establish and use its rates and

20  rating plans, and the plan may establish and use changes in

21  rating plans at any time, but no more frequently than two

22  times per any rating class for any calendar year. By December

23  1, 1993, and December 1 of each year thereafter, the board

24  shall establish and use actuarially sound rates for use by the

25  plan to assure that the plan is self-funding while those rates

26  are in effect. Such rates and rating plans must be filed with

27  the office department within 30 calendar days after their

28  effective dates, and shall be considered a "use and file"

29  filing. Any disapproval by the office department must have an

30  effective date that is at least 60 days from the date of

31  disapproval of the rates and rating plan and must have

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 1  prospective effect only. The plan may not be subject to any

 2  order by the office department to return to policyholders any

 3  portion of the rates disapproved by the office department. The

 4  office department may not disapprove any rates or rating plans

 5  unless it demonstrates that such rates and rating plans are

 6  excessive, inadequate, or unfairly discriminatory.

 7         (f)  No later than June 1 of each year, the plan shall

 8  obtain an independent actuarial certification of the results

 9  of the operations of the plan for prior years, and shall

10  furnish a copy of the certification to the office department.

11  If, after the effective date of the plan, the projected

12  ultimate incurred losses and expenses and dividends for prior

13  years exceed collected premiums, accrued net investment

14  income, and prior assessments for prior years, the

15  certification is subject to review and approval by the office

16  department before it becomes final.

17         (g)  Whenever a deficit exists, the plan shall, within

18  90 days, provide the office department with a program to

19  eliminate the deficit within a reasonable time. The deficit

20  may be funded through increased premiums charged to insureds

21  of the plan for subsequent years, through the use of

22  policyholder surplus attributable to any year, and through

23  assessments on insureds in the plan if the plan uses

24  assessable policies.

25         Section 1097.  Section 627.3111, Florida Statutes, is

26  amended to read:

27         627.3111  Public records exemption.--All bank account

28  numbers and debit, charge, and credit card numbers, and all

29  other personal financial and health information of a consumer

30  held by the department or office of Insurance or their its

31  service providers or agents, relating to a consumer's

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 1  complaint or inquiry regarding a matter or activity regulated

 2  under the Florida Insurance Code, are confidential and exempt

 3  from s. 119.07(1) and s. 24(a), Art. I of the State

 4  Constitution. For the purpose of this section, the term

 5  "consumer" includes but is not limited to a prospective

 6  purchaser, purchaser, or beneficiary of, or applicant for, any

 7  product or service regulated under the Florida Insurance Code,

 8  and a family member or dependent of a consumer, a subscriber

 9  under a group policy, or a policyholder. This information

10  shall be redacted from records that contain nonexempt

11  information prior to disclosure.  This exemption applies to

12  information made confidential and exempt by this section held

13  by the department or office of Insurance or their its service

14  providers or agents before, on, or after the effective date of

15  this exemption. Such confidential and exempt information may

16  be disclosed to another governmental entity, if disclosure is

17  necessary for the receiving entity to perform its duties and

18  responsibilities, and may be disclosed to the National

19  Association of Insurance Commissioners. The receiving

20  governmental entity and the association must maintain the

21  confidential and exempt status of such information. The

22  information made confidential and exempt by this section may

23  be used in a criminal, civil, or administrative proceeding so

24  long as the confidential and exempt status of such information

25  is maintained. This exemption does not include the name and

26  address of an inquirer or complainant to the department or

27  office or the name of an insurer or other regulated entity

28  which is the subject of the inquiry or complaint. This section

29  is subject to the Open Government Sunset Review Act of 1995 in

30  accordance with s. 119.15 and shall stand repealed on October

31  

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 1  2, 2007, unless reviewed and saved from repeal through

 2  reenactment by the Legislature.

 3         Section 1098.  Subsection (6) of section 627.314,

 4  Florida Statutes, is amended to read:

 5         627.314  Concerted action by two or more insurers.--

 6         (6)  Notwithstanding any other provisions of this part,

 7  insurers shall not participate directly or indirectly in the

 8  deliberations or decisions of rating organizations on private

 9  passenger automobile insurance.  However, such rating

10  organizations shall, upon request of individual insurers, be

11  required to furnish at reasonable cost the rate indications

12  resulting from the loss and expense statistics gathered by

13  them. Individual insurers may modify the indications to

14  reflect their individual experience in determining their own

15  rates. Such rates shall be filed with the office department

16  for public inspection whenever requested and shall be

17  available for public announcement only by the press, office

18  department, or insurer.

19         Section 1099.  Section 627.318, Florida Statutes, is

20  amended to read:

21         627.318  Records.--Every insurer, rating organization,

22  and advisory organization and every group, association, or

23  other organization of insurers which engages in joint

24  underwriting or joint reinsurance shall maintain reasonable

25  records, of the type and kind reasonably adapted to its method

26  of operation, of its experience or the experience of its

27  members and of the data, statistics, or information collected

28  or used by it in connection with the rates, rating plans,

29  rating systems, underwriting rules, policy or bond forms,

30  surveys, or inspections made or used by it, so that such

31  records will be available at all reasonable times to enable

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 1  the office department to determine whether such organization,

 2  insurer, group, or association, and, in the case of an insurer

 3  or rating organization, every rate, rating plan, and rating

 4  system made or used by it, complies with the provisions of

 5  this part applicable to it.  The maintenance of such records

 6  in the office of a licensed rating organization of which an

 7  insurer is a member or subscriber will be sufficient

 8  compliance with this section for any such insurer maintaining

 9  membership or subscribership in such organization, to the

10  extent that the insurer uses the rates, rating plans, rating

11  systems, or underwriting rules of such organization. Such

12  records shall be maintained in an office within this state or

13  shall be made available for examination or inspection within

14  this state by the department at any time upon reasonable

15  notice.

16         Section 1100.  Section 627.331, Florida Statutes, is

17  amended to read:

18         627.331  Recording and reporting of loss, expense, and

19  claims experience; rating information.--

20         (1)  The commission department may promulgate rules and

21  statistical plans which shall thereafter be used by each

22  insurer in the recording and reporting of its loss, expense,

23  and claims experience, in order that the experience of all

24  insurers may be made available at least annually in such form

25  and detail as may be necessary to aid the office department in

26  determining whether the insurer's activities comply with the

27  applicable standards of this code.

28         (2)  In promulgating such rules and plans, the

29  commission department shall give due consideration to the

30  rating systems in use in this state and, in order that such

31  rules and plans may be as uniform as is practicable among the

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 1  several states, to the rules and to the form of the plans used

 2  for such rating systems in other states.  No insurer shall be

 3  required to record or report its loss experience on a

 4  classification basis that is inconsistent with the rating

 5  system used by it, except for motor vehicle insurance as

 6  otherwise provided by law.

 7         (3)  The office department may designate one or more

 8  rating organizations or other agencies to assist it in

 9  gathering such experience and making compilations thereof; and

10  such compilations shall be made available, subject to

11  reasonable rules adopted promulgated by the commission

12  department, to insurers and rating organizations.

13         Section 1101.  Subsection (1), paragraphs (a) and (c)

14  of subsection (3), paragraphs (a), (c), and (d) of subsection

15  (4), and subsections (5) and (6) of section 627.351, Florida

16  Statutes, are amended, and paragraph (f) is added to

17  subsection (2) of that section to read:

18         627.351  Insurance risk apportionment plans.--

19         (1)  MOTOR VEHICLE INSURANCE RISK

20  APPORTIONMENT.--Agreements may be made among casualty and

21  surety insurers with respect to the equitable apportionment

22  among them of insurance which may be afforded applicants who

23  are in good faith entitled to, but are unable to, procure such

24  insurance through ordinary methods, and such insurers may

25  agree among themselves on the use of reasonable rate

26  modifications for such insurance. Such agreements and rate

27  modifications shall be subject to the approval of the office

28  department. The office department shall, after consultation

29  with the insurers licensed to write automobile liability

30  insurance in this state, adopt a reasonable plan or plans for

31  the equitable apportionment among such insurers of applicants

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 1  for such insurance who are in good faith entitled to, but are

 2  unable to, procure such insurance through ordinary methods,

 3  and, when such plan has been adopted, all such insurers shall

 4  subscribe thereto and shall participate therein. Such plan or

 5  plans shall include rules for classification of risks and

 6  rates therefor. The plan or plans shall make available

 7  noncancelable coverage as provided in s. 627.7275(2).  Any

 8  insured placed with the plan shall be notified of the fact

 9  that insurance coverage is being afforded through the plan and

10  not through the private market, and such notification shall be

11  given in writing within 10 days of such placement.  To assure

12  that plan rates are made adequate to pay claims and expenses,

13  insurers shall develop a means of obtaining loss and expense

14  experience at least annually, and the plan shall file such

15  experience, when available, with the office department in

16  sufficient detail to make a determination of rate adequacy.

17  Prior to the filing of such experience with the office

18  department, the plan shall poll each member insurer as to the

19  need for an actuary who is a member of the Casualty Actuarial

20  Society and who is not affiliated with the plan's statistical

21  agent to certify the plan's rate adequacy. If a majority of

22  those insurers responding indicate a need for such

23  certification, the plan shall include the certification as

24  part of its experience filing.  Such experience shall be filed

25  with the office department not more than 9 months following

26  the end of the annual statistical period under review,

27  together with a rate filing based on said experience. The

28  office department shall initiate proceedings to disapprove the

29  rate and so notify the plan or shall finalize its review

30  within 60 days of receipt of the filing. Notification to the

31  plan by the office department of its preliminary findings,

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 1  which include a point of entry to the plan pursuant to chapter

 2  120, shall toll the 60-day period during any such proceedings

 3  and subsequent judicial review. The rate shall be deemed

 4  approved if the office department does not issue notice to the

 5  plan of its preliminary findings within 60 days of the filing.

 6  In addition to provisions for claims and expenses, the

 7  ratemaking formula shall include a factor for projected claims

 8  trending and 5 percent for contingencies. In no instance shall

 9  the formula include a renewal discount for plan insureds.

10  However, the plan shall reunderwrite each insured on an annual

11  basis, based upon all applicable rating factors approved by

12  the office department. Trend factors shall not be found to be

13  inappropriate if not in excess of trend factors normally used

14  in the development of residual market rates by the appropriate

15  licensed rating organization.  Each application for coverage

16  in the plan shall include, in boldfaced 12-point type

17  immediately preceding the applicant's signature, the following

18  statement:

19  

20         "THIS INSURANCE IS BEING AFFORDED THROUGH THE

21         FLORIDA JOINT UNDERWRITING ASSOCIATION AND NOT

22         THROUGH THE PRIVATE MARKET. PLEASE BE ADVISED

23         THAT COVERAGE WITH A PRIVATE INSURER MAY BE

24         AVAILABLE FROM ANOTHER AGENT AT A LOWER COST.

25         AGENT AND COMPANY LISTINGS ARE AVAILABLE IN THE

26         LOCAL YELLOW PAGES."

27  

28  The plan shall annually report to the office

29  department the number and percentage of plan insureds

30  who are not surcharged due to their driving record.

31         (2)  WINDSTORM INSURANCE RISK APPORTIONMENT.--

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 1         (f)  As used in this subsection, the term "department"

 2  means the former Department of Insurance.

 3         (3)  POLITICAL SUBDIVISION; CASUALTY INSURANCE RISK

 4  APPORTIONMENT.--

 5         (a)  The office department shall, after consultation

 6  with the casualty insurers licensed in this state, adopt a

 7  plan or plans for the equitable apportionment among them of

 8  casualty insurance coverage which may be afforded political

 9  subdivisions which are in good faith entitled to, but are

10  unable to, procure such coverage through the voluntary market

11  at standard rates or through a statutorily approved plan

12  authorized by the office department. The office department may

13  adopt a joint underwriting plan which shall provide for one or

14  more designated insurers able and willing to provide

15  policyholder and claims service, including the issuance of

16  insurance policies, to act on behalf of all other insurers

17  required to participate in the joint underwriting plan. Any

18  joint underwriting plan adopted shall provide for the

19  equitable apportionment of any profits realized, or of losses

20  and expenses incurred, among participating insurers. The plan

21  shall include, but shall not be limited to:

22         1.  Rules for the classification of risks and rates

23  which reflect the past loss experience and prospective loss

24  experience in different geographic areas.

25         2.  A rating plan which reasonably reflects the prior

26  claims experience of the insureds.

27         3.  Excess coverage by insurers if the office Insurance

28  Commissioner, in its his or her discretion, requires such

29  coverage by insurers participating in the joint underwriting

30  plan.

31  

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 1         (c)  Any deficit sustained under the plan shall first

 2  be recovered through a premium contingency assessment.

 3  Concurrently, the rates for insureds shall be adjusted for the

 4  next year so as to be actuarially sound in conformance with

 5  rules adopted by of the commission department.

 6         (4)  MEDICAL MALPRACTICE RISK APPORTIONMENT.--

 7         (a)  The office department shall, after consultation

 8  with insurers as set forth in paragraph (b), adopt a joint

 9  underwriting plan as set forth in paragraph (d).

10         (c)  The Joint Underwriting Association shall operate

11  subject to the supervision and approval of a board of

12  governors consisting of representatives of five of the

13  insurers participating in the Joint Underwriting Association,

14  an attorney to be named by The Florida Bar, a physician to be

15  named by the Florida Medical Association, a dentist to be

16  named by the Florida Dental Association, and a hospital

17  representative to be named by the Florida Hospital

18  Association.  The board of governors shall choose, during the

19  first meeting of the board after June 30 of each year, one of

20  its members to serve as chair of the board and another member

21  to serve as vice chair of the board.  There shall be no

22  liability on the part of, and no cause of action of any nature

23  shall arise against, any member insurer, self-insurer, or its

24  agents or employees, the Joint Underwriting Association or its

25  agents or employees, members of the board of governors, or the

26  office department or its representatives for any action taken

27  by them in the performance of their powers and duties under

28  this subsection.

29         (d)  The plan shall provide coverage for claims arising

30  out of the rendering of, or failure to render, medical care or

31  services and, in the case of health care facilities, coverage

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 1  for bodily injury or property damage to the person or property

 2  of any patient arising out of the insured's activities, in

 3  appropriate policy forms for all health care providers as

 4  defined in paragraph (h).  The plan shall include, but shall

 5  not be limited to:

 6         1.  Classifications of risks and rates which reflect

 7  past and prospective loss and expense experience in different

 8  areas of practice and in different geographical areas.  To

 9  assure that plan rates are adequate to pay claims and

10  expenses, the Joint Underwriting Association shall develop a

11  means of obtaining loss and expense experience; and the plan

12  shall file such experience, when available, with the office

13  department in sufficient detail to make a determination of

14  rate adequacy. Within 60 days after a rate filing, the office

15  department shall approve such rates or rate revisions as are

16  fully supported by the filing. In addition to provisions for

17  claims and expenses, the ratemaking formula may include a

18  factor for projected claims trending and a margin for

19  contingencies. The use of trend factors shall not be found to

20  be inappropriate.

21         2.  A rating plan which reasonably recognizes the prior

22  claims experience of insureds.

23         3.  Provisions as to rates for:

24         a.  Insureds who are retired or semiretired.

25         b.  The estates of deceased insureds.

26         c.  Part-time professionals.

27         4.  Protection in an amount not to exceed $250,000 per

28  claim, $750,000 annual aggregate for health care providers

29  other than hospitals and in an amount not to exceed $1.5

30  million per claim, $5 million annual aggregate for hospitals.

31  Such coverage for health care providers other than hospitals

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 1  shall be available as primary coverage and as excess coverage

 2  for the layer of coverage between the primary coverage and the

 3  total limits of $250,000 per claim, $750,000 annual aggregate.

 4  The plan shall also provide tail coverage in these amounts to

 5  insureds whose claims-made coverage with another insurer or

 6  trust has or will be terminated.  Such tail coverage shall

 7  provide coverage for incidents that occurred during the

 8  claims-made policy period for which a claim is made after the

 9  policy period.

10         5.  A risk management program for insureds of the

11  association.  This program shall include, but not be limited

12  to: investigation and analysis of frequency, severity, and

13  causes of adverse or untoward medical injuries; development of

14  measures to control these injuries; systematic reporting of

15  medical incidents; investigation and analysis of patient

16  complaints; and auditing of association members to assure

17  implementation of this program. The plan may refuse to insure

18  any insured who refuses or fails to comply with the risk

19  management program implemented by the association.  Prior to

20  cancellation or refusal to renew an insured, the association

21  shall provide the insured 60 days' notice of intent to cancel

22  or nonrenew and shall further notify the insured of any action

23  which must be taken to be in compliance with the risk

24  management program.

25         (5)  PROPERTY AND CASUALTY INSURANCE RISK

26  APPORTIONMENT.--The commission department shall adopt by rule

27  a joint underwriting plan to equitably apportion among

28  insurers authorized in this state to write property insurance

29  as defined in s. 624.604 or casualty insurance as defined in

30  s. 624.605, the underwriting of one or more classes of

31  property insurance or casualty insurance, except for the types

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 1  of insurance that are included within property insurance or

 2  casualty insurance for which an equitable apportionment plan,

 3  assigned risk plan, or joint underwriting plan is authorized

 4  under s. 627.311 or subsection (1), subsection (2), subsection

 5  (3), subsection (4), or subsection (5) and except for risks

 6  eligible for flood insurance written through the federal flood

 7  insurance program to persons with risks eligible under

 8  subparagraph (a)1. and who are in good faith entitled to, but

 9  are unable to, obtain such property or casualty insurance

10  coverage, including excess coverage, through the voluntary

11  market. For purposes of this subsection, an adequate level of

12  coverage means that coverage which is required by state law or

13  by responsible or prudent business practices. The Joint

14  Underwriting Association shall not be required to provide

15  coverage for any type of risk for which there are no insurers

16  providing similar coverage in this state. The office

17  department may designate one or more participating insurers

18  who agree to provide policyholder and claims service,

19  including the issuance of policies, on behalf of the

20  participating insurers.

21         (a)  The plan shall provide:

22         1.  A means of establishing eligibility of a risk for

23  obtaining insurance through the plan, which provides that:

24         a.  A risk shall be eligible for such property

25  insurance or casualty insurance as is required by Florida law

26  if the insurance is unavailable in the voluntary market,

27  including the market assistance program and the surplus lines

28  market.

29         b.  A commercial risk not eligible under

30  sub-subparagraph a. shall be eligible for property or casualty

31  insurance if:

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 1         (I)  The insurance is unavailable in the voluntary

 2  market, including the market assistance plan and the surplus

 3  lines market;

 4         (II)  Failure to secure the insurance would

 5  substantially impair the ability of the entity to conduct its

 6  affairs; and

 7         (III)  The risk is not determined by the Risk

 8  Underwriting Committee to be uninsurable.

 9         c.  In the event the Federal Government terminates the

10  Federal Crime Insurance Program established under 44 C.F.R.

11  ss. 80-83, Florida commercial and residential risks previously

12  insured under the federal program shall be eligible under the

13  plan.

14         d.(I)  In the event a risk is eligible under this

15  paragraph and in the event the market assistance plan receives

16  a minimum of 100 applications for coverage within a 3-month

17  period, or 200 applications for coverage within a 1-year

18  period or less, for a given class of risk contained in the

19  classification system defined in the plan of operation of the

20  Joint Underwriting Association, and unless the market

21  assistance plan provides a quotation for at least 80 percent

22  of such applicants, such classification shall immediately be

23  eligible for coverage in the Joint Underwriting Association.

24         (II)  Any market assistance plan application which is

25  rejected because an individual risk is so hazardous as to be

26  practically uninsurable, considering whether the likelihood of

27  a loss for such a risk is substantially higher than for other

28  risks of the same class due to individual risk

29  characteristics, prior loss experience, unwillingness to

30  cooperate with a prior insurer, physical characteristics and

31  physical location shall not be included in the minimum

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 1  percentage calculation provided above. In the event that there

 2  is any legal or administrative challenge to a determination by

 3  the office department that the conditions of this subparagraph

 4  have been met for eligibility for coverage in the Joint

 5  Underwriting Association for a given classification, any

 6  eligible risk may obtain coverage during the pendency of any

 7  such challenge.

 8         e.  In order to qualify as a quotation for the purpose

 9  of meeting the minimum percentage calculation in this

10  subparagraph, the quoted premium must meet the following

11  criteria:

12         (I)  In the case of an admitted carrier, the quoted

13  premium must not exceed the premium available for a given

14  classification currently in use by the Joint Underwriting

15  Association or the premium developed by using the rates and

16  rating plans on file with the office department by the quoting

17  insurer, whichever is greater.

18         (II)  In the case of an authorized surplus lines

19  insurer, the quoted premium must not exceed the premium

20  available for a given classification currently in use by the

21  Joint Underwriting Association by more than 25 percent, after

22  consideration of any individual risk surcharge or credit.

23         f.  Any agent who falsely certifies the unavailability

24  of coverage as provided by sub-subparagraphs a. and b., is

25  subject to the penalties provided in s. 626.611.

26         2.  A means for the equitable apportionment of profits

27  or losses and expenses among participating insurers.

28         3.  Rules for the classification of risks and rates

29  which reflect the past and prospective loss experience.

30         4.  A rating plan which reasonably reflects the prior

31  claims experience of the insureds. Such rating plan shall

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 1  include at least two levels of rates for risks that have

 2  favorable loss experience and risks that have unfavorable loss

 3  experience, as established by the plan.

 4         5.  Reasonable limits to available amounts of

 5  insurance. Such limits may not be less than the amounts of

 6  insurance required of eligible risks by Florida law.

 7         6.  Risk management requirements for insurance where

 8  such requirements are reasonable and are expected to reduce

 9  losses.

10         7.  Deductibles as may be necessary to meet the needs

11  of insureds.

12         8.  Policy forms which are consistent with the forms in

13  use by the majority of the insurers providing coverage in the

14  voluntary market for the coverage requested by the applicant.

15         9.  A means to remove risks from the plan once such

16  risks no longer meet the eligibility requirements of this

17  paragraph. For this purpose, the plan shall include the

18  following requirements: At each 6-month interval after the

19  activation of any class of insureds, the board of governors or

20  its designated committee shall review the number of

21  applications to the market assistance plan for that class. If,

22  based on these latest numbers, at least 90 percent of such

23  applications have been provided a quotation, the Joint

24  Underwriting Association shall cease underwriting new

25  applications for such class within 30 days, and notification

26  of this decision shall be sent to the office Insurance

27  Commissioner, the major agents' associations, and the board of

28  directors of the market assistance plan. A quotation for the

29  purpose of this subparagraph shall meet the same criteria for

30  a quotation as provided in sub-subparagraph 1.e

31  sub-subparagraph d. All policies which were previously written

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 1  for that class shall continue in force until their normal

 2  expiration date, at which time, subject to the required timely

 3  notification of nonrenewal by the Joint Underwriting

 4  Association, the insured may then elect to reapply to the

 5  Joint Underwriting Association according to the requirements

 6  of eligibility. If, upon reapplication, those previously

 7  insured Joint Underwriting Association risks meet the

 8  eligibility requirements, the Joint Underwriting Association

 9  shall provide the coverage requested.

10         10.  A means for providing credits to insurers against

11  any deficit assessment levied pursuant to paragraph (c), for

12  risks voluntarily written through the market assistance plan

13  by such insurers.

14         11.  That the Joint Underwriting Association shall

15  operate subject to the supervision and approval of a board of

16  governors consisting of 13 individuals appointed by the Chief

17  Financial Officer Insurance Commissioner, and shall have an

18  executive or underwriting committee. At least four of the

19  members shall be representatives of insurance trade

20  associations as follows: one member from the American

21  Insurance Association, one member from the Alliance of

22  American Insurers, one member from the National Association of

23  Independent Insurers, and one member from an unaffiliated

24  insurer writing coverage on a national basis. Two

25  representatives shall be from two of the statewide agents'

26  associations. Each board member shall be appointed to serve

27  for 2-year terms beginning on a date designated by the plan

28  and shall serve at the pleasure of the Chief Financial Officer

29  commissioner. Members may be reappointed for subsequent terms.

30         (b)  Rates used by the Joint Underwriting Association

31  shall be actuarially sound. To the extent applicable, the rate

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 1  standards set forth in s. 627.062 shall be considered by the

 2  office department in establishing rates to be used by the

 3  joint underwriting plan. The initial rate level shall be

 4  determined using the rates, rules, rating plans, and

 5  classifications contained in the most current Insurance

 6  Services Office (ISO) filing with the office department or the

 7  filing of other licensed rating organizations with an

 8  additional increment of 25 percent of premium. For any type of

 9  coverage or classification which lends itself to manual rating

10  for which the Insurance Services Office or another licensed

11  rating organization does not file or publish a rate, the Joint

12  Underwriting Association shall file and use an initial rate

13  based on the average current market rate. The initial rate

14  level for the rate plan shall also be subject to an experience

15  and schedule rating plan which may produce a maximum of 25

16  percent debits or credits. For any risk which does not lend

17  itself to manual rating and for which no rate has been

18  promulgated under the rate plan, the board shall develop and

19  file with the office commissioner, subject to its his or her

20  approval, appropriate criteria and factors for rating the

21  individual risk. Such criteria and factors shall include, but

22  not be limited to, loss rating plans, composite rating plans,

23  and unique and unusual risk rating plans. The initial rates

24  required under this paragraph shall be adjusted in conformity

25  with future filings by the Insurance Services Office with the

26  office department and shall remain in effect until such time

27  as the Joint Underwriting Association has sufficient data as

28  to independently justify an actuarially sound change in such

29  rates.

30         (c)1.  In the event an underwriting deficit exists for

31  any policy year the plan is in effect, any surplus which has

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 1  accrued from previous years and is not projected within

 2  reasonable actuarial certainty to be needed for payment for

 3  claims in the year the surplus arose shall be used to offset

 4  the deficit to the extent available.

 5         2.  As to any remaining deficit, the board of governors

 6  of the Joint Underwriting Association shall levy and collect

 7  an assessment in an amount sufficient to offset such deficit.

 8  Such assessment shall be levied against the insurers

 9  participating in the plan during the year giving rise to the

10  assessment. Any assessments against insurers for the lines of

11  property and casualty insurance issued to commercial risks

12  shall be recovered from the participating insurers in the

13  proportion that the net direct premium of each insurer for

14  commercial risks written during the preceding calendar year

15  bears to the aggregate net direct premium written for

16  commercial risks by all members of the plan for the lines of

17  insurance included in the plan. Any assessments against

18  insurers for the lines of property and casualty insurance

19  issued to personal risks eligible under sub-subparagraph

20  (a)1.a. or sub-subparagraph (a)1.c. shall be recovered from

21  the participating insurers in the proportion that the net

22  direct premium of each insurer for personal risks written

23  during the preceding calendar year bears to the aggregate net

24  direct premium written for personal risks by all members of

25  the plan for the lines of insurance included in the plan.

26         3.  The board shall take all reasonable and prudent

27  steps necessary to collect the amount of assessment due from

28  each participating insurer and policyholder, including, if

29  prudent, filing suit to collect such assessment. If the board

30  is unable to collect an assessment from any insurer, the

31  uncollected assessments shall be levied as an additional

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 1  assessment against the participating insurers and any

 2  participating insurer required to pay an additional assessment

 3  as a result of such failure to pay shall have a cause of

 4  action against such nonpaying insurer.

 5         4.  Any funds or entitlements that the state may be

 6  eligible to receive by virtue of the Federal Government's

 7  termination of the Federal Crime Insurance Program referenced

 8  in sub-subparagraph (a)1.c. may be used under the plan to

 9  offset any subsequent underwriting deficits that may occur

10  from risks previously insured with the Federal Crime Insurance

11  Program.

12         5.  Assessments shall be included as an appropriate

13  factor in the making of rates as provided in s. 627.3512.

14         6.a.  The Legislature finds that the potential for

15  unlimited assessments under this paragraph may induce insurers

16  to attempt to reduce their writings in the voluntary market,

17  and that such actions would worsen the availability problems

18  that the association was created to remedy. It is the intent

19  of the Legislature that insurers remain fully responsible for

20  covering any deficits of the association; however, it is also

21  the intent of the Legislature to provide a means by which

22  assessment liabilities may be amortized over a period of

23  years.

24         b.  The total amount of deficit assessments under this

25  paragraph with respect to any year may not exceed 10 percent

26  of the statewide total gross written premium for all insurers

27  for the coverages referred to in the introductory language of

28  this subsection for the prior year, except that if the deficit

29  with respect to any plan year exceeds such amount and bonds

30  are issued under sub-subparagraph c. to defray the deficit,

31  the total amount of assessments with respect to such deficit

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 1  may not in any year exceed 10 percent of the deficit, or such

 2  lesser percentage as is sufficient to retire the bonds as

 3  determined by the board, and shall continue annually until the

 4  bonds are retired.

 5         c.  The governing body of any unit of local government,

 6  any residents or businesses of which are insured by the

 7  association, may issue bonds as defined in s. 125.013 or s.

 8  166.101 from time to time to fund an assistance program, in

 9  conjunction with the association, for the purpose of defraying

10  deficits of the association. Revenue bonds may not be issued

11  until validated pursuant to chapter 75, unless a state of

12  emergency is declared by executive order or proclamation of

13  the Governor pursuant to s. 252.36 making such findings as are

14  necessary to determine that it is in the best interests of,

15  and necessary for, the protection of the public health,

16  safety, and general welfare of residents of this state and the

17  protection and preservation of the economic stability of

18  insurers operating in this state, and declaring it an

19  essential public purpose to permit certain municipalities or

20  counties to issue such bonds as will provide relief to

21  claimants and policyholders of the joint underwriting

22  association and insurers responsible for apportionment of

23  association losses. The unit of local government shall enter

24  into such contracts with the association as are necessary to

25  carry out this paragraph. Any bonds issued under this

26  sub-subparagraph shall be payable from and secured by moneys

27  received by the association from assessments under this

28  paragraph, and assigned and pledged to or on behalf of the

29  unit of local government for the benefit of the holders of

30  such bonds. The funds, credit, property, and taxing power of

31  the state or of the unit of local government shall not be

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 1  pledged for the payment of such bonds. If any of the bonds

 2  remain unsold 60 days after issuance, the office department

 3  shall require all insurers subject to assessment to purchase

 4  the bonds, which shall be treated as admitted assets; each

 5  insurer shall be required to purchase that percentage of the

 6  unsold portion of the bond issue that equals the insurer's

 7  relative share of assessment liability under this subsection.

 8  An insurer shall not be required to purchase the bonds to the

 9  extent that the office department determines that the purchase

10  would endanger or impair the solvency of the insurer.

11         7.  The plan shall provide for the deferment, in whole

12  or in part, of the assessment of an insurer if the office

13  department finds that payment of the assessment would endanger

14  or impair the solvency of the insurer. In the event an

15  assessment against an insurer is deferred in whole or in part,

16  the amount by which such assessment is deferred may be

17  assessed against the other member insurers in a manner

18  consistent with the basis for assessments set forth in

19  subparagraph 2.

20         (d)  Upon adoption of the plan, all insurers authorized

21  in this state to underwrite property or casualty insurance

22  shall participate in the plan.

23         (e)  A Risk Underwriting Committee of the Joint

24  Underwriting Association composed of three members experienced

25  in evaluating insurance risks is created to review risks

26  rejected by the voluntary market for which application is made

27  for insurance through the joint underwriting plan. The

28  committee shall consist of a representative of the market

29  assistance plan created under s. 627.3515, a member selected

30  by the insurers participating in the Joint Underwriting

31  Association, and a member named by the Chief Financial Officer

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 1  Insurance Commissioner. The Risk Underwriting Committee shall

 2  appoint such advisory committees as are provided for in the

 3  plan and are necessary to conduct its functions. The salaries

 4  and expenses of the members of the Risk Underwriting Committee

 5  and its advisory committees shall be paid by the joint

 6  underwriting plan. The plan approved by the office department

 7  shall establish criteria and procedures for use by the Risk

 8  Underwriting Committee for determining whether an individual

 9  risk is so hazardous as to be uninsurable. In making this

10  determination and in establishing the criteria and procedures,

11  the following shall be considered:

12         1.  Whether the likelihood of a loss for the individual

13  risk is substantially higher than for other risks of the same

14  class; and

15         2.  Whether the uncertainty associated with the

16  individual risk is such that an appropriate premium cannot be

17  determined.

18  

19  The acceptance or rejection of a risk by the underwriting

20  committee shall be construed as the private placement of

21  insurance, and the provisions of chapter 120 shall not apply.

22         (f)  There shall be no liability on the part of, and no

23  cause of action of any nature shall arise against, any member

24  insurer or its agents or employees, the Florida Property and

25  Casualty Joint Underwriting Association or its agents or

26  employees, members of the board of governors, the Chief

27  Financial Officer, or the office department or its

28  representatives for any action taken by them in the

29  performance of their duties under this subsection. Such

30  immunity does not apply to actions for breach of any contract

31  

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 1  or agreement pertaining to insurance, or any other willful

 2  tort.

 3         (6)  CITIZENS PROPERTY INSURANCE CORPORATION.--

 4         (a)1.  The Legislature finds that actual and threatened

 5  catastrophic losses to property in this state from hurricanes

 6  have caused insurers to be unwilling or unable to provide

 7  property insurance coverage to the extent sought and needed.

 8  It is in the public interest and a public purpose to assist in

 9  assuring that property in the state is insured so as to

10  facilitate the remediation, reconstruction, and replacement of

11  damaged or destroyed property in order to reduce or avoid the

12  negative effects otherwise resulting to the public health,

13  safety, and welfare; to the economy of the state; and to the

14  revenues of the state and local governments needed to provide

15  for the public welfare. It is necessary, therefore, to provide

16  property insurance to applicants who are in good faith

17  entitled to procure insurance through the voluntary market but

18  are unable to do so. The Legislature intends by this

19  subsection that property insurance be provided and that it

20  continues, as long as necessary, through an entity organized

21  to achieve efficiencies and economies, all toward the

22  achievement of the foregoing public purposes. Because it is

23  essential for the corporation to have the maximum financial

24  resources to pay claims following a catastrophic hurricane, it

25  is the intent of the Legislature that the income of the

26  corporation be exempt from federal income taxation and that

27  interest on the debt obligations issued by the corporation be

28  exempt from federal income taxation.

29         2.  The Residential Property and Casualty Joint

30  Underwriting Association originally created by this statute

31  shall be known, as of July 1, 2002, as the Citizens Property

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 1  Insurance Corporation. The corporation shall provide insurance

 2  for residential and commercial property, for applicants who

 3  are in good faith entitled, but are unable, to procure

 4  insurance through the voluntary market. The corporation shall

 5  operate pursuant to a plan of operation approved by order of

 6  the office department. The plan is subject to continuous

 7  review by the office department. The office department may, by

 8  order, withdraw approval of all or part of a plan if the

 9  office department determines that conditions have changed

10  since approval was granted and that the purposes of the plan

11  require changes in the plan.  For the purposes of this

12  subsection, residential coverage includes both personal lines

13  residential coverage, which consists of the type of coverage

14  provided by homeowner's, mobile home owner's, dwelling,

15  tenant's, condominium unit owner's, and similar policies, and

16  commercial lines residential coverage, which consists of the

17  type of coverage provided by condominium association,

18  apartment building, and similar policies.

19         (b)1.  All insurers authorized to write one or more

20  subject lines of business in this state are subject to

21  assessment by the corporation and, for the purposes of this

22  subsection, are referred to collectively as "assessable

23  insurers." Insurers writing one or more subject lines of

24  business in this state pursuant to part VIII of chapter 626

25  are not assessable insurers, but insureds who procure one or

26  more subject lines of business in this state pursuant to part

27  VIII of chapter 626 are subject to assessment by the

28  corporation and are referred to collectively as "assessable

29  insureds." An authorized insurer's assessment liability shall

30  begin on the first day of the calendar year following the year

31  in which the insurer was issued a certificate of authority to

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 1  transact insurance for subject lines of business in this state

 2  and shall terminate 1 year after the end of the first calendar

 3  year during which the insurer no longer holds a certificate of

 4  authority to transact insurance for subject lines of business

 5  in this state.

 6         2.a.  All revenues, assets, liabilities, losses, and

 7  expenses of the corporation shall be divided into three

 8  separate accounts as follows:

 9         (I)  A personal lines account for personal residential

10  policies issued by the corporation or issued by the

11  Residential Property and Casualty Joint Underwriting

12  Association and renewed by the corporation that provide

13  comprehensive, multiperil coverage on risks that are not

14  located in areas eligible for coverage in the Florida

15  Windstorm Underwriting Association as those areas were defined

16  on January 1, 2002 and for such policies that do not provide

17  coverage for the peril of wind on risks that are located in

18  such areas;

19         (II)  A commercial lines account for commercial

20  residential policies issued by the corporation or issued by

21  the Residential Property and Casualty Joint Underwriting

22  Association and renewed by the corporation that provide

23  coverage for basic property perils on risks that are not

24  located in areas eligible for coverage in the Florida

25  Windstorm Underwriting Association as those areas were defined

26  on January 1, 2002, and for such policies that do not provide

27  coverage for the peril of wind on risks that are located in

28  such areas; and

29         (III)  A high-risk account for personal residential

30  policies and commercial residential and commercial

31  nonresidential property policies issued by the corporation or

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 1  transferred to the corporation that provide coverage for the

 2  peril of wind on risks that are located in areas eligible for

 3  coverage in the Florida Windstorm Underwriting Association as

 4  those areas were defined on January 1, 2002. The high-risk

 5  account must also include quota share primary insurance under

 6  subparagraph (c)2. The area eligible for coverage under the

 7  high-risk account also includes the area within Port

 8  Canaveral, which is bordered on the south by the City of Cape

 9  Canaveral, bordered on the west by the Banana River, and

10  bordered on the north by Federal Government property. The

11  office department may remove territory from the area eligible

12  for wind-only and quota share coverage if, after a public

13  hearing, the office department finds that authorized insurers

14  in the voluntary market are willing and able to write

15  sufficient amounts of personal and commercial residential

16  coverage for all perils in the territory, including coverage

17  for the peril of wind, such that risks covered by wind-only

18  policies in the removed territory could be issued a policy by

19  the corporation in either the personal lines or commercial

20  lines account without a significant increase in the

21  corporation's probable maximum loss in such account. Removal

22  of territory from the area eligible for wind-only or quota

23  share coverage does not alter the assignment of wind coverage

24  written in such areas to the high-risk account.

25         b.  The three separate accounts must be maintained as

26  long as financing obligations entered into by the Florida

27  Windstorm Underwriting Association or Residential Property and

28  Casualty Joint Underwriting Association are outstanding, in

29  accordance with the terms of the corresponding financing

30  documents. When the financing obligations are no longer

31  outstanding, in accordance with the terms of the corresponding

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 1  financing documents, the corporation may use a single account

 2  for all revenues, assets, liabilities, losses, and expenses of

 3  the corporation.

 4         c.  Creditors of the Residential Property and Casualty

 5  Joint Underwriting Association shall have a claim against, and

 6  recourse to, the accounts referred to in sub-sub-subparagraphs

 7  a.(I) and (II) and shall have no claim against, or recourse

 8  to, the account referred to in sub-sub-subparagraph a.(III).

 9  Creditors of the Florida Windstorm Underwriting Association

10  shall have a claim against, and recourse to, the account

11  referred to in sub-sub-subparagraph a.(III) and shall have no

12  claim against, or recourse to, the accounts referred to in

13  sub-sub-subparagraphs a.(I) and (II).

14         d.  Revenues, assets, liabilities, losses, and expenses

15  not attributable to particular accounts shall be prorated

16  among the accounts.

17         e.  The Legislature finds that the revenues of the

18  corporation are revenues that are necessary to meet the

19  requirements set forth in documents authorizing the issuance

20  of bonds under this subsection.

21         f.  No part of the income of the corporation may inure

22  to the benefit of any private person.

23         3.  With respect to a deficit in an account:

24         a.  When the deficit incurred in a particular calendar

25  year is not greater than 10 percent of the aggregate statewide

26  direct written premium for the subject lines of business for

27  the prior calendar year, the entire deficit shall be recovered

28  through regular assessments of assessable insurers under

29  paragraph (g) and assessable insureds.

30         b.  When the deficit incurred in a particular calendar

31  year exceeds 10 percent of the aggregate statewide direct

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 1  written premium for the subject lines of business for the

 2  prior calendar year, the corporation shall levy regular

 3  assessments on assessable insurers under paragraph (g) and on

 4  assessable insureds in an amount equal to the greater of 10

 5  percent of the deficit or 10 percent of the aggregate

 6  statewide direct written premium for the subject lines of

 7  business for the prior calendar year. Any remaining deficit

 8  shall be recovered through emergency assessments under

 9  sub-subparagraph d.

10         c.  Each assessable insurer's share of the amount being

11  assessed under sub-subparagraph a. or sub-subparagraph b.

12  shall be in the proportion that the assessable insurer's

13  direct written premium for the subject lines of business for

14  the year preceding the assessment bears to the aggregate

15  statewide direct written premium for the subject lines of

16  business for that year. The assessment percentage applicable

17  to each assessable insured is the ratio of the amount being

18  assessed under sub-subparagraph a. or sub-subparagraph b. to

19  the aggregate statewide direct written premium for the subject

20  lines of business for the prior year. Assessments levied by

21  the corporation on assessable insurers under sub-subparagraphs

22  a. and b. shall be paid as required by the corporation's plan

23  of operation and paragraph (g). Assessments levied by the

24  corporation on assessable insureds under sub-subparagraphs a.

25  and b. shall be collected by the surplus lines agent at the

26  time the surplus lines agent collects the surplus lines tax

27  required by s. 626.932 and shall be paid to the Florida

28  Surplus Lines Service Office at the time the surplus lines

29  agent pays the surplus lines tax to the Florida Surplus Lines

30  Service Office. Upon receipt of regular assessments from

31  surplus lines agents, the Florida Surplus Lines Service Office

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 1  shall transfer the assessments directly to the corporation as

 2  determined by the corporation.

 3         d.  Upon a determination by the board of governors that

 4  a deficit in an account exceeds the amount that will be

 5  recovered through regular assessments under sub-subparagraph

 6  a. or sub-subparagraph b., the board shall levy, after

 7  verification by the office department, emergency assessments,

 8  for as many years as necessary to cover the deficits, to be

 9  collected by assessable insurers and the corporation and

10  collected from assessable insureds upon issuance or renewal of

11  policies for subject lines of business, excluding National

12  Flood Insurance policies. The amount of the emergency

13  assessment collected in a particular year shall be a uniform

14  percentage of that year's direct written premium for subject

15  lines of business and all accounts of the corporation,

16  excluding National Flood Insurance Program policy premiums, as

17  annually determined by the board and verified by the office

18  department. The office department shall verify the arithmetic

19  calculations involved in the board's determination within 30

20  days after receipt of the information on which the

21  determination was based. Notwithstanding any other provision

22  of law, the corporation and each assessable insurer that

23  writes subject lines of business shall collect emergency

24  assessments from its policyholders without such obligation

25  being affected by any credit, limitation, exemption, or

26  deferment. Emergency assessments levied by the corporation on

27  assessable insureds shall be collected by the surplus lines

28  agent at the time the surplus lines agent collects the surplus

29  lines tax required by s. 626.932 and shall be paid to the

30  Florida Surplus Lines Service Office at the time the surplus

31  lines agent pays the surplus lines tax to the Florida Surplus

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 1  Lines Service Office. The emergency assessments so collected

 2  shall be transferred directly to the corporation on a periodic

 3  basis as determined by the corporation and shall be held by

 4  the corporation solely in the applicable account. The

 5  aggregate amount of emergency assessments levied for an

 6  account under this sub-subparagraph in any calendar year may

 7  not exceed the greater of 10 percent of the amount needed to

 8  cover the original deficit, plus interest, fees, commissions,

 9  required reserves, and other costs associated with financing

10  of the original deficit, or 10 percent of the aggregate

11  statewide direct written premium for subject lines of business

12  and for all accounts of the corporation for the prior year,

13  plus interest, fees, commissions, required reserves, and other

14  costs associated with financing the original deficit.

15         e.  The corporation may pledge the proceeds of

16  assessments, projected recoveries from the Florida Hurricane

17  Catastrophe Fund, other insurance and reinsurance

18  recoverables, market equalization surcharges and other

19  surcharges, and other funds available to the corporation as

20  the source of revenue for and to secure bonds issued under

21  paragraph (g), bonds or other indebtedness issued under

22  subparagraph (c)3., or lines of credit or other financing

23  mechanisms issued or created under this subsection, or to

24  retire any other debt incurred as a result of deficits or

25  events giving rise to deficits, or in any other way that the

26  board determines will efficiently recover such deficits. The

27  purpose of the lines of credit or other financing mechanisms

28  is to provide additional resources to assist the corporation

29  in covering claims and expenses attributable to a catastrophe.

30  As used in this subsection, the term "assessments" includes

31  regular assessments under sub-subparagraph a.,

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 1  sub-subparagraph b., or subparagraph (g)1. and emergency

 2  assessments under sub-subparagraph d. Emergency assessments

 3  collected under sub-subparagraph d. are not part of an

 4  insurer's rates, are not premium, and are not subject to

 5  premium tax, fees, or commissions; however, failure to pay the

 6  emergency assessment shall be treated as failure to pay

 7  premium. The emergency assessments under sub-subparagraph d.

 8  shall continue as long as any bonds issued or other

 9  indebtedness incurred with respect to a deficit for which the

10  assessment was imposed remain outstanding, unless adequate

11  provision has been made for the payment of such bonds or other

12  indebtedness pursuant to the documents governing such bonds or

13  other indebtedness.

14         f.  As used in this subsection, the term "subject lines

15  of business" means insurance written by assessable insurers or

16  procured by assessable insureds on real or personal property,

17  as defined in s. 624.604, including insurance for fire,

18  industrial fire, allied lines, farmowners multiperil,

19  homeowners multiperil, commercial multiperil, and mobile

20  homes, and including liability coverage on all such insurance,

21  but excluding inland marine as defined in s. 624.607(3) and

22  excluding vehicle insurance as defined in s. 624.605(1) other

23  than insurance on mobile homes used as permanent dwellings.

24         g.  The Florida Surplus Lines Service Office shall

25  determine annually the aggregate statewide written premium in

26  subject lines of business procured by assessable insureds and

27  shall report that information to the corporation in a form and

28  at a time the corporation specifies to ensure that the

29  corporation can meet the requirements of this subsection and

30  the corporation's financing obligations.

31  

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 1         h.  The Florida Surplus Lines Service Office shall

 2  verify the proper application by surplus lines agents of

 3  assessment percentages for regular assessments and emergency

 4  assessments levied under this subparagraph on assessable

 5  insureds and shall assist the corporation in ensuring the

 6  accurate, timely collection and payment of assessments by

 7  surplus lines agents as required by the corporation.

 8         (c)  The plan of operation of the corporation:

 9         1.  Must provide for adoption of residential property

10  and casualty insurance policy forms and commercial residential

11  and nonresidential property insurance forms, which forms must

12  be approved by the office department prior to use. The

13  corporation shall adopt the following policy forms:

14         a.  Standard personal lines policy forms that are

15  comprehensive multiperil policies providing full coverage of a

16  residential property equivalent to the coverage provided in

17  the private insurance market under an HO-3, HO-4, or HO-6

18  policy.

19         b.  Basic personal lines policy forms that are policies

20  similar to an HO-8 policy or a dwelling fire policy that

21  provide coverage meeting the requirements of the secondary

22  mortgage market, but which coverage is more limited than the

23  coverage under a standard policy.

24         c.  Commercial lines residential policy forms that are

25  generally similar to the basic perils of full coverage

26  obtainable for commercial residential structures in the

27  admitted voluntary market.

28         d.  Personal lines and commercial lines residential

29  property insurance forms that cover the peril of wind only.

30  The forms are applicable only to residential properties

31  

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 1  located in areas eligible for coverage under the high-risk

 2  account referred to in sub-subparagraph (b)2.a.

 3         e.  Commercial lines nonresidential property insurance

 4  forms that cover the peril of wind only.  The forms are

 5  applicable only to nonresidential properties located in areas

 6  eligible for coverage under the high-risk account referred to

 7  in sub-subparagraph (b)2.a.

 8         2.a.  Must provide that the corporation adopt a program

 9  in which the corporation and authorized insurers enter into

10  quota share primary insurance agreements for hurricane

11  coverage, as defined in s. 627.4025(2)(a), for eligible risks,

12  and adopt property insurance forms for eligible risks which

13  cover the peril of wind only. As used in this subsection, the

14  term:

15         (I)  "Quota share primary insurance" means an

16  arrangement in which the primary hurricane coverage of an

17  eligible risk is provided in specified percentages by the

18  corporation and an authorized insurer. The corporation and

19  authorized insurer are each solely responsible for a specified

20  percentage of hurricane coverage of an eligible risk as set

21  forth in a quota share primary insurance agreement between the

22  corporation and an authorized insurer and the insurance

23  contract. The responsibility of the corporation or authorized

24  insurer to pay its specified percentage of hurricane losses of

25  an eligible risk, as set forth in the quota share primary

26  insurance agreement, may not be altered by the inability of

27  the other party to the agreement to pay its specified

28  percentage of hurricane losses. Eligible risks that are

29  provided hurricane coverage through a quota share primary

30  insurance arrangement must be provided policy forms that set

31  forth the obligations of the corporation and authorized

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 1  insurer under the arrangement, clearly specify the percentages

 2  of quota share primary insurance provided by the corporation

 3  and authorized insurer, and conspicuously and clearly state

 4  that neither the authorized insurer nor the corporation may be

 5  held responsible beyond its specified percentage of coverage

 6  of hurricane losses.

 7         (II)  "Eligible risks" means personal lines residential

 8  and commercial lines residential risks that meet the

 9  underwriting criteria of the corporation and are located in

10  areas that were eligible for coverage by the Florida Windstorm

11  Underwriting Association on January 1, 2002.

12         b.  The corporation may enter into quota share primary

13  insurance agreements with authorized insurers at corporation

14  coverage levels of 90 percent and 50 percent.

15         c.  If the corporation determines that additional

16  coverage levels are necessary to maximize participation in

17  quota share primary insurance agreements by authorized

18  insurers, the corporation may establish additional coverage

19  levels. However, the corporation's quota share primary

20  insurance coverage level may not exceed 90 percent.

21         d.  Any quota share primary insurance agreement entered

22  into between an authorized insurer and the corporation must

23  provide for a uniform specified percentage of coverage of

24  hurricane losses, by county or territory as set forth by the

25  corporation board, for all eligible risks of the authorized

26  insurer covered under the quota share primary insurance

27  agreement.

28         e.  Any quota share primary insurance agreement entered

29  into between an authorized insurer and the corporation is

30  subject to review and approval by the office department.

31  However, such agreement shall be authorized only as to

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 1  insurance contracts entered into between an authorized insurer

 2  and an insured who is already insured by the corporation for

 3  wind coverage.

 4         f.  For all eligible risks covered under quota share

 5  primary insurance agreements, the exposure and coverage levels

 6  for both the corporation and authorized insurers shall be

 7  reported by the corporation to the Florida Hurricane

 8  Catastrophe Fund. For all policies of eligible risks covered

 9  under quota share primary insurance agreements, the

10  corporation and the authorized insurer shall maintain complete

11  and accurate records for the purpose of exposure and loss

12  reimbursement audits as required by Florida Hurricane

13  Catastrophe Fund rules. The corporation and the authorized

14  insurer shall each maintain duplicate copies of policy

15  declaration pages and supporting claims documents.

16         g.  The corporation board shall establish in its plan

17  of operation standards for quota share agreements which ensure

18  that there is no discriminatory application among insurers as

19  to the terms of quota share agreements, pricing of quota share

20  agreements, incentive provisions if any, and consideration

21  paid for servicing policies or adjusting claims.

22         h.  The quota share primary insurance agreement between

23  the corporation and an authorized insurer must set forth the

24  specific terms under which coverage is provided, including,

25  but not limited to, the sale and servicing of policies issued

26  under the agreement by the insurance agent of the authorized

27  insurer producing the business, the reporting of information

28  concerning eligible risks, the payment of premium to the

29  corporation, and arrangements for the adjustment and payment

30  of hurricane claims incurred on eligible risks by the claims

31  adjuster and personnel of the authorized insurer. Entering

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 1  into a quota sharing insurance agreement between the

 2  corporation and an authorized insurer shall be voluntary and

 3  at the discretion of the authorized insurer.

 4         3.  May provide that the corporation may employ or

 5  otherwise contract with individuals or other entities to

 6  provide administrative or professional services that may be

 7  appropriate to effectuate the plan. The corporation shall have

 8  the power to borrow funds, by issuing bonds or by incurring

 9  other indebtedness, and shall have other powers reasonably

10  necessary to effectuate the requirements of this subsection.

11  The corporation may, but is not required to, seek judicial

12  validation of its bonds or other indebtedness under chapter

13  75. The corporation may issue bonds or incur other

14  indebtedness, or have bonds issued on its behalf by a unit of

15  local government pursuant to subparagraph (g)2., in the

16  absence of a hurricane or other weather-related event, upon a

17  determination by the corporation, subject to approval by the

18  office department, that such action would enable it to

19  efficiently meet the financial obligations of the corporation

20  and that such financings are reasonably necessary to

21  effectuate the requirements of this subsection. The

22  corporation is authorized to take all actions needed to

23  facilitate tax-free status for any such bonds or indebtedness,

24  including formation of trusts or other affiliated entities.

25  The corporation shall have the authority to pledge

26  assessments, projected recoveries from the Florida Hurricane

27  Catastrophe Fund, other reinsurance recoverables, market

28  equalization and other surcharges, and other funds available

29  to the corporation as security for bonds or other

30  indebtedness. In recognition of s. 10, Art. I of the State

31  Constitution, prohibiting the impairment of obligations of

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 1  contracts, it is the intent of the Legislature that no action

 2  be taken whose purpose is to impair any bond indenture or

 3  financing agreement or any revenue source committed by

 4  contract to such bond or other indebtedness.

 5         4.a.  Must require that the corporation operate subject

 6  to the supervision and approval of a board of governors

 7  consisting of 7 individuals who are residents of this state,

 8  from different geographical areas of this state, appointed by

 9  the Chief Financial Officer Treasurer. The Chief Financial

10  Officer Treasurer shall designate one of the appointees as

11  chair. All board members serve at the pleasure of the Chief

12  Financial Officer Treasurer. All board members, including the

13  chair, must be appointed to serve for 3-year terms beginning

14  annually on a date designated by the plan. Any board vacancy

15  shall be filled for the unexpired term by the Chief Financial

16  Officer Treasurer. The Chief Financial Officer Treasurer shall

17  appoint a technical advisory group to provide information and

18  advice to the board of governors in connection with the

19  board's duties under this subsection. The executive director

20  and senior managers of the corporation shall be engaged by the

21  Chief Financial Officer Treasurer and serve at the pleasure of

22  the Chief Financial Officer Treasurer. The executive director

23  is responsible for employing other staff as the corporation

24  may require, subject to review and concurrence by the Office

25  of the Chief Financial Officer Treasurer.

26         b.  To ensure the effective and efficient

27  implementation of this subsection, the Treasurer shall appoint

28  the board of governors by July 1, 2002. The board of governors

29  shall work in conjunction with the Residential Property

30  Insurance Market Coordinating Council to address appropriate

31  organizational, operational, and financial matters relating to

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 1  the corporation. In addition, after consultation with the

 2  Residential Property Insurance Market Coordinating Council,

 3  the bond trustees and rating agencies, the Treasurer may

 4  postpone for a period not to exceed 180 days after the

 5  effective date, the implementation of the corporation or the

 6  implementation of one or more of the provisions relating to

 7  transfer of Florida Windstorm Underwriting Association

 8  policies, obligations, rights, assets, and liabilities into

 9  the high-risk accounts and such other provisions that may be

10  affected thereby if the Treasurer determines that postponement

11  is necessary:

12         (I)  Due to emergency conditions;

13         (II)  To ensure the effective and efficient

14  implementation of the corporation's operations; or

15         (III)  To maintain existing financing arrangements

16  without a material adverse effect on the creditors of the

17  Residential Property and Casualty Joint Underwriting

18  Association or the Florida Windstorm Underwriting Association.

19         5.  Must provide a procedure for determining the

20  eligibility of a risk for coverage, as follows:

21         a.  Subject to the provisions of s. 627.3517, with

22  respect to personal lines residential risks, if the risk is

23  offered coverage from an authorized insurer at the insurer's

24  approved rate under either a standard policy including wind

25  coverage or, if consistent with the insurer's underwriting

26  rules as filed with the office department, a basic policy

27  including wind coverage, the risk is not eligible for any

28  policy issued by the corporation association. If the risk is

29  not able to obtain any such offer, the risk is eligible for

30  either a standard policy including wind coverage or a basic

31  policy including wind coverage issued by the corporation

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 1  association; however, if the risk could not be insured under a

 2  standard policy including wind coverage regardless of market

 3  conditions, the risk shall be eligible for a basic policy

 4  including wind coverage unless rejected under subparagraph 8.

 5  The corporation association shall determine the type of policy

 6  to be provided on the basis of objective standards specified

 7  in the underwriting manual and based on generally accepted

 8  underwriting practices.

 9         (I)  If the risk accepts an offer of coverage through

10  the market assistance plan or an offer of coverage through a

11  mechanism established by the corporation association before a

12  policy is issued to the risk by the corporation association or

13  during the first 30 days of coverage by the corporation

14  association, and the producing agent who submitted the

15  application to the plan or to the corporation association is

16  not currently appointed by the insurer, the insurer shall:

17         (A)  Pay to the producing agent of record of the

18  policy, for the first year, an amount that is the greater of

19  the insurer's usual and customary commission for the type of

20  policy written or a fee equal to the usual and customary

21  commission of the corporation association; or

22         (B)  Offer to allow the producing agent of record of

23  the policy to continue servicing the policy for a period of

24  not less than 1 year and offer to pay the agent the greater of

25  the insurer's or the corporation's association's usual and

26  customary commission for the type of policy written.

27  

28  If the producing agent is unwilling or unable to accept

29  appointment, the new insurer shall pay the agent in accordance

30  with sub-sub-sub-subparagraph (A).

31  

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 1         (II)  When the corporation association enters into a

 2  contractual agreement for a take-out plan, the producing agent

 3  of record of the corporation association policy is entitled to

 4  retain any unearned commission on the policy, and the insurer

 5  shall:

 6         (A)  Pay to the producing agent of record of the

 7  corporation association policy, for the first year, an amount

 8  that is the greater of the insurer's usual and customary

 9  commission for the type of policy written or a fee equal to

10  the usual and customary commission of the corporation

11  association; or

12         (B)  Offer to allow the producing agent of record of

13  the corporation association policy to continue servicing the

14  policy for a period of not less than 1 year and offer to pay

15  the agent the greater of the insurer's or the corporation's

16  association's usual and customary commission for the type of

17  policy written.

18  

19  If the producing agent is unwilling or unable to accept

20  appointment, the new insurer shall pay the agent in accordance

21  with sub-sub-sub-subparagraph (A).

22         b.  With respect to commercial lines residential risks,

23  if the risk is offered coverage under a policy including wind

24  coverage from an authorized insurer at its approved rate, the

25  risk is not eligible for any policy issued by the corporation

26  association. If the risk is not able to obtain any such offer,

27  the risk is eligible for a policy including wind coverage

28  issued by the corporation association.

29         (I)  If the risk accepts an offer of coverage through

30  the market assistance plan or an offer of coverage through a

31  mechanism established by the corporation association before a

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 1  policy is issued to the risk by the corporation association or

 2  during the first 30 days of coverage by the corporation

 3  association, and the producing agent who submitted the

 4  application to the plan or the corporation association is not

 5  currently appointed by the insurer, the insurer shall:

 6         (A)  Pay to the producing agent of record of the

 7  policy, for the first year, an amount that is the greater of

 8  the insurer's usual and customary commission for the type of

 9  policy written or a fee equal to the usual and customary

10  commission of the corporation association; or

11         (B)  Offer to allow the producing agent of record of

12  the policy to continue servicing the policy for a period of

13  not less than 1 year and offer to pay the agent the greater of

14  the insurer's or the corporation's association's usual and

15  customary commission for the type of policy written.

16  

17  If the producing agent is unwilling or unable to accept

18  appointment, the new insurer shall pay the agent in accordance

19  with sub-sub-sub-subparagraph (A).

20         (II)  When the corporation association enters into a

21  contractual agreement for a take-out plan, the producing agent

22  of record of the corporation association policy is entitled to

23  retain any unearned commission on the policy, and the insurer

24  shall:

25         (A)  Pay to the producing agent of record of the

26  corporation association policy, for the first year, an amount

27  that is the greater of the insurer's usual and customary

28  commission for the type of policy written or a fee equal to

29  the usual and customary commission of the corporation

30  association; or

31  

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 1         (B)  Offer to allow the producing agent of record of

 2  the corporation association policy to continue servicing the

 3  policy for a period of not less than 1 year and offer to pay

 4  the agent the greater of the insurer's or the corporation's

 5  association's usual and customary commission for the type of

 6  policy written.

 7  

 8  If the producing agent is unwilling or unable to accept

 9  appointment, the new insurer shall pay the agent in accordance

10  with sub-sub-sub-subparagraph (A).

11         c.  This subparagraph does not require the association

12  to provide wind coverage or hurricane coverage in any area in

13  which such coverage is available through the Florida Windstorm

14  Underwriting Association.

15         6.  Must include rules for classifications of risks and

16  rates therefor.

17         7.  Must provide that if premium and investment income

18  for an account attributable to a particular calendar year are

19  in excess of projected losses and expenses for the account

20  attributable to that year, such excess shall be held in

21  surplus in the account. Such surplus shall be available to

22  defray deficits in that account as to future years and shall

23  be used for that purpose prior to assessing assessable

24  insurers and assessable insureds as to any calendar year.

25         8.  Must provide objective criteria and procedures to

26  be uniformly applied for all applicants in determining whether

27  an individual risk is so hazardous as to be uninsurable. In

28  making this determination and in establishing the criteria and

29  procedures, the following shall be considered:

30  

31  

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 1         a.  Whether the likelihood of a loss for the individual

 2  risk is substantially higher than for other risks of the same

 3  class; and

 4         b.  Whether the uncertainty associated with the

 5  individual risk is such that an appropriate premium cannot be

 6  determined.

 7  

 8  The acceptance or rejection of a risk by the corporation shall

 9  be construed as the private placement of insurance, and the

10  provisions of chapter 120 shall not apply.

11         9.  Must provide that the corporation shall make its

12  best efforts to procure catastrophe reinsurance at reasonable

13  rates, as determined by the board of governors.

14         10.  Must provide that in the event of regular deficit

15  assessments under sub-subparagraph (b)3.a. or sub-subparagraph

16  (b)3.b., in the personal lines account, the commercial lines

17  residential account, or the high-risk account, the corporation

18  shall levy upon corporation policyholders in its next rate

19  filing, or by a separate rate filing solely for this purpose,

20  a market equalization surcharge arising from a regular

21  assessment in such account in a percentage equal to the total

22  amount of such regular assessments divided by the aggregate

23  statewide direct written premium for subject lines of business

24  for the prior calendar year. Market equalization surcharges

25  under this subparagraph are not considered premium and are not

26  subject to commissions, fees, or premium taxes; however,

27  failure to pay a market equalization surcharge shall be

28  treated as failure to pay premium.

29         11.  The policies issued by the corporation must

30  provide that, if the corporation or the market assistance plan

31  obtains an offer from an authorized insurer to cover the risk

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 1  at its approved rates, the risk is no longer eligible for

 2  renewal through the corporation.

 3         12.  Corporation policies and applications must include

 4  a notice that the corporation policy could, under this

 5  section, be replaced with a policy issued by an authorized

 6  insurer that does not provide coverage identical to the

 7  coverage provided by the corporation. The notice shall also

 8  specify that acceptance of corporation coverage creates a

 9  conclusive presumption that the applicant or policyholder is

10  aware of this potential.

11         13.  May establish, subject to approval by the office

12  department, different eligibility requirements and operational

13  procedures for any line or type of coverage for any specified

14  county or area if the board determines that such changes to

15  the eligibility requirements and operational procedures are

16  justified due to the voluntary market being sufficiently

17  stable and competitive in such area or for such line or type

18  of coverage and that consumers who, in good faith, are unable

19  to obtain insurance through the voluntary market through

20  ordinary methods would continue to have access to coverage

21  from the corporation. When coverage is sought in connection

22  with a real property transfer, such requirements and

23  procedures shall not provide for an effective date of coverage

24  later than the date of the closing of the transfer as

25  established by the transferor, the transferee, and, if

26  applicable, the lender.

27         14.  Must provide that, with respect to the high-risk

28  account, any assessable insurer with a surplus as to

29  policyholders of $25 million or less writing 25 percent or

30  more of its total countrywide property insurance premiums in

31  this state may petition the office department, within the

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 1  first 90 days of each calendar year, to qualify as a limited

 2  apportionment company. In no event shall a limited

 3  apportionment company be required to participate in the

 4  portion of any assessment, within the high-risk account,

 5  pursuant to sub-subparagraph (b)3.a. or sub-subparagraph

 6  (b)3.b. in the aggregate which exceeds $50 million after

 7  payment of available high-risk account funds in any calendar

 8  year. However, a limited apportionment company shall collect

 9  from its policyholders any emergency assessment imposed under

10  sub-subparagraph (b)3.d. The plan shall provide that, if the

11  office department determines that any regular assessment will

12  result in an impairment of the surplus of a limited

13  apportionment company, the office department may direct that

14  all or part of such assessment be deferred as provided in

15  subparagraph (g)4. However, there shall be no limitation or

16  deferment of an emergency assessment to be collected from

17  policyholders under sub-subparagraph (b)3.d.

18         15.  Must provide that the corporation appoint as its

19  licensed agents only those agents who also hold an appointment

20  as defined in s. 626.104 with an insurer who at the time of

21  the agent's initial appointment by the corporation is

22  authorized to write and is actually writing personal lines

23  residential property coverage, commercial residential property

24  coverage, or commercial nonresidential property coverage

25  within the state.

26         (d)1.  It is the intent of the Legislature that the

27  rates for coverage provided by the corporation be actuarially

28  sound and not competitive with approved rates charged in the

29  admitted voluntary market, so that the corporation functions

30  as a residual market mechanism to provide insurance only when

31  the insurance cannot be procured in the voluntary market.

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 1  Rates shall include an appropriate catastrophe loading factor

 2  that reflects the actual catastrophic exposure of the

 3  corporation.

 4         2.  For each county, the average rates of the

 5  corporation for each line of business for personal lines

 6  residential policies excluding rates for wind-only policies

 7  shall be no lower than the average rates charged by the

 8  insurer that had the highest average rate in that county among

 9  the 20 insurers with the greatest total direct written premium

10  in the state for that line of business in the preceding year,

11  except that with respect to mobile home coverages, the average

12  rates of the corporation shall be no lower than the average

13  rates charged by the insurer that had the highest average rate

14  in that county among the 5 insurers with the greatest total

15  written premium for mobile home owner's policies in the state

16  in the preceding year.

17         3.  Rates for personal lines residential wind-only

18  policies must be actuarially sound and not competitive with

19  approved rates charged by authorized insurers. However, for

20  personal lines residential wind-only policies issued or

21  renewed between July 1, 2002, and June 30, 2003, the maximum

22  premium increase must be no greater than 10 percent of the

23  Florida Windstorm Underwriting Association premium for that

24  policy in effect on June 30, 2002, as adjusted for coverage

25  changes and seasonal occupancy surcharges. The personal lines

26  residential wind-only rates for the corporation effective July

27  1, 2003, must be based on a rate filing by the corporation

28  which establishes rates which are actuarially sound and not

29  competitive with approved rates charged by authorized

30  insurers.  Corporation rate manuals shall include a rate

31  surcharge for seasonal occupancy.  To ensure that personal

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 1  lines residential wind-only rates effective on or after July

 2  1, 2003, are not competitive with approved rates charged by

 3  authorized insurers, the office department, by March 1 of each

 4  year, shall provide the corporation, for each county in which

 5  there are geographical areas in which personal lines

 6  residential wind-only policies may be issued, the average

 7  rates charged by the insurer that had the highest average rate

 8  in that county for wind coverage in that insurer's rating

 9  territories which most closely approximate the geographical

10  area in that county in which personal lines residential

11  wind-only policies may be written by the corporation.  The

12  average rates provided must be from an insurer among the 20

13  insurers with the greatest total direct written premium in the

14  state for personal lines residential property insurance for

15  the preceding year.  With respect to mobile homes, the five

16  insurers with the greatest total written premium for that line

17  of business in the preceding year shall be used. The

18  corporation shall certify to the office department that its

19  average personal lines residential wind-only rates are no

20  lower in each county than the average rates provided by the

21  office department. The commission may department is authorized

22  to adopt rules to establish reporting requirements to obtain

23  the necessary wind-only rate information from insurers to

24  implement this provision.

25         4.  Rates for commercial lines coverage shall not be

26  subject to the requirements of subparagraph 2., but shall be

27  subject to all other requirements of this paragraph and s.

28  627.062.

29         5.  Nothing in this paragraph shall require or allow

30  the corporation to adopt a rate that is inadequate under s.

31  627.062.

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 1         6.  The corporation shall make a rate filing at least

 2  once a year, but no more often than quarterly.

 3         7.  In addition to the rates otherwise determined

 4  pursuant to this paragraph, the corporation shall impose and

 5  collect an amount equal to the premium tax provided for in s.

 6  624.509 to augment the financial resources of the corporation.

 7         (e)  If coverage in an account is deactivated pursuant

 8  to paragraph (f), coverage through the corporation shall be

 9  reactivated by order of the office department only under one

10  of the following circumstances:

11         1.  If the market assistance plan receives a minimum of

12  100 applications for coverage within a 3-month period, or 200

13  applications for coverage within a 1-year period or less for

14  residential coverage, unless the market assistance plan

15  provides a quotation from admitted carriers at their filed

16  rates for at least 90 percent of such applicants. Any market

17  assistance plan application that is rejected because an

18  individual risk is so hazardous as to be uninsurable using the

19  criteria specified in subparagraph (c)8. shall not be included

20  in the minimum percentage calculation provided herein. In the

21  event that there is a legal or administrative challenge to a

22  determination by the office department that the conditions of

23  this subparagraph have been met for eligibility for coverage

24  in the corporation, any eligible risk may obtain coverage

25  during the pendency of such challenge.

26         2.  In response to a state of emergency declared by the

27  Governor under s. 252.36, the office department may activate

28  coverage by order for the period of the emergency upon a

29  finding by the office department that the emergency

30  significantly affects the availability of residential property

31  insurance.

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 1         (f)1.  The corporation shall file with the office

 2  department quarterly statements of financial condition, an

 3  annual statement of financial condition, and audited financial

 4  statements in the manner prescribed by law. In addition, the

 5  corporation shall report to the office department monthly on

 6  the types, premium, exposure, and distribution by county of

 7  its policies in force, and shall submit other reports as the

 8  office department requires to carry out its oversight of the

 9  corporation.

10         2.  The activities of the corporation shall be reviewed

11  at least annually by the office department to determine

12  whether coverage shall be deactivated in an account on the

13  basis that the conditions giving rise to its activation no

14  longer exist.

15         (g)1.  The corporation shall certify to the office

16  department its needs for annual assessments as to a particular

17  calendar year, and for any interim assessments that it deems

18  to be necessary to sustain operations as to a particular year

19  pending the receipt of annual assessments. Upon verification,

20  the office department shall approve such certification, and

21  the corporation shall levy such annual or interim assessments.

22  Such assessments shall be prorated as provided in paragraph

23  (b). The corporation shall take all reasonable and prudent

24  steps necessary to collect the amount of assessment due from

25  each assessable insurer, including, if prudent, filing suit to

26  collect such assessment. If the corporation is unable to

27  collect an assessment from any assessable insurer, the

28  uncollected assessments shall be levied as an additional

29  assessment against the assessable insurers and any assessable

30  insurer required to pay an additional assessment as a result

31  of such failure to pay shall have a cause of action against

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 1  such nonpaying assessable insurer. Assessments shall be

 2  included as an appropriate factor in the making of rates. The

 3  failure of a surplus lines agent to collect and remit any

 4  regular or emergency assessment levied by the corporation is

 5  considered to be a violation of s. 626.936 and subjects the

 6  surplus lines agent to the penalties provided in that section.

 7         2.  The governing body of any unit of local government,

 8  any residents of which are insured by the corporation, may

 9  issue bonds as defined in s. 125.013 or s. 166.101 from time

10  to time to fund an assistance program, in conjunction with the

11  corporation, for the purpose of defraying deficits of the

12  corporation. In order to avoid needless and indiscriminate

13  proliferation, duplication, and fragmentation of such

14  assistance programs, any unit of local government, any

15  residents of which are insured by the corporation, may provide

16  for the payment of losses, regardless of whether or not the

17  losses occurred within or outside of the territorial

18  jurisdiction of the local government. Revenue bonds under this

19  subparagraph may not be issued until validated pursuant to

20  chapter 75, unless a state of emergency is declared by

21  executive order or proclamation of the Governor pursuant to s.

22  252.36 making such findings as are necessary to determine that

23  it is in the best interests of, and necessary for, the

24  protection of the public health, safety, and general welfare

25  of residents of this state and declaring it an essential

26  public purpose to permit certain municipalities or counties to

27  issue such bonds as will permit relief to claimants and

28  policyholders of the corporation. Any such unit of local

29  government may enter into such contracts with the corporation

30  and with any other entity created pursuant to this subsection

31  as are necessary to carry out this paragraph. Any bonds issued

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 1  under this subparagraph shall be payable from and secured by

 2  moneys received by the corporation from emergency assessments

 3  under sub-subparagraph (b)3.d., and assigned and pledged to or

 4  on behalf of the unit of local government for the benefit of

 5  the holders of such bonds.  The funds, credit, property, and

 6  taxing power of the state or of the unit of local government

 7  shall not be pledged for the payment of such bonds. If any of

 8  the bonds remain unsold 60 days after issuance, the office

 9  department shall require all insurers subject to assessment to

10  purchase the bonds, which shall be treated as admitted assets;

11  each insurer shall be required to purchase that percentage of

12  the unsold portion of the bond issue that equals the insurer's

13  relative share of assessment liability under this subsection.

14  An insurer shall not be required to purchase the bonds to the

15  extent that the office department determines that the purchase

16  would endanger or impair the solvency of the insurer.

17         3.a.  The corporation shall adopt one or more programs

18  subject to approval by the office department for the reduction

19  of both new and renewal writings in the corporation. The

20  corporation may consider any prudent and not unfairly

21  discriminatory approach to reducing corporation writings, and

22  may adopt a credit against assessment liability or other

23  liability that provides an incentive for insurers to take

24  risks out of the corporation and to keep risks out of the

25  corporation by maintaining or increasing voluntary writings in

26  counties or areas in which corporation risks are highly

27  concentrated and a program to provide a formula under which an

28  insurer voluntarily taking risks out of the corporation by

29  maintaining or increasing voluntary writings will be relieved

30  wholly or partially from assessments under sub-subparagraphs

31  (b)3.a. and b. When the corporation enters into a contractual

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 1  agreement for a take-out plan, the producing agent of record

 2  of the corporation policy is entitled to retain any unearned

 3  commission on such policy, and the insurer shall either:

 4         (I)  Pay to the producing agent of record of the

 5  policy, for the first year, an amount which is the greater of

 6  the insurer's usual and customary commission for the type of

 7  policy written or a policy fee equal to the usual and

 8  customary commission of the corporation; or

 9         (II)  Offer to allow the producing agent of record of

10  the policy to continue servicing the policy for a period of

11  not less than 1 year and offer to pay the agent the insurer's

12  usual and customary commission for the type of policy written.

13  If the producing agent is unwilling or unable to accept

14  appointment by the new insurer, the new insurer shall pay the

15  agent in accordance with sub-sub-subparagraph (I).

16         b.  Any credit or exemption from regular assessments

17  adopted under this subparagraph shall last no longer than the

18  3 years following the cancellation or expiration of the policy

19  by the corporation. With the approval of the office

20  department, the board may extend such credits for an

21  additional year if the insurer guarantees an additional year

22  of renewability for all policies removed from the corporation,

23  or for 2 additional years if the insurer guarantees 2

24  additional years of renewability for all policies so removed.

25         c.  There shall be no credit, limitation, exemption, or

26  deferment from emergency assessments to be collected from

27  policyholders pursuant to sub-subparagraph (b)3.d.

28         4.  The plan shall provide for the deferment, in whole

29  or in part, of the assessment of an assessable insurer, other

30  than an emergency assessment collected from policyholders

31  pursuant to sub-subparagraph (b)3.d., if the office department

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 1  finds that payment of the assessment would endanger or impair

 2  the solvency of the insurer. In the event an assessment

 3  against an assessable insurer is deferred in whole or in part,

 4  the amount by which such assessment is deferred may be

 5  assessed against the other assessable insurers in a manner

 6  consistent with the basis for assessments set forth in

 7  paragraph (b).

 8         (h)  Nothing in this subsection shall be construed to

 9  preclude the issuance of residential property insurance

10  coverage pursuant to part VIII of chapter 626.

11         (i)  There shall be no liability on the part of, and no

12  cause of action of any nature shall arise against, any

13  assessable insurer or its agents or employees, the corporation

14  or its agents or employees, members of the board of governors

15  or their respective designees at a board meeting, corporation

16  committee members, or the office department or its

17  representatives, for any action taken by them in the

18  performance of their duties or responsibilities under this

19  subsection. Such immunity does not apply to:

20         1.  Any of the foregoing persons or entities for any

21  willful tort;

22         2.  The corporation or its producing agents for breach

23  of any contract or agreement pertaining to insurance coverage;

24         3.  The corporation with respect to issuance or payment

25  of debt; or

26         4.  Any assessable insurer with respect to any action

27  to enforce an assessable insurer's obligations to the

28  corporation under this subsection.

29         (j)  For the purposes of s. 199.183(1), the corporation

30  shall be considered a political subdivision of the state and

31  shall be exempt from the corporate income tax. The premiums,

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 1  assessments, investment income, and other revenue of the

 2  corporation are funds received for providing property

 3  insurance coverage as required by this subsection, paying

 4  claims for Florida citizens insured by the corporation,

 5  securing and repaying debt obligations issued by the

 6  corporation, and conducting all other activities of the

 7  corporation, and shall not be considered taxes, fees,

 8  licenses, or charges for services imposed by the Legislature

 9  on individuals, businesses, or agencies outside state

10  government. Bonds and other debt obligations issued by or on

11  behalf of the corporation are not to be considered "state

12  bonds" within the meaning of s. 215.58(8) s. 215.58(10). The

13  corporation is not subject to the procurement provisions of

14  chapter 287, and policies and decisions of the corporation

15  relating to incurring debt, levying of assessments and the

16  sale, issuance, continuation, terms and claims under

17  corporation policies, and all services relating thereto, are

18  not subject to the provisions of chapter 120. The corporation

19  is not required to obtain or to hold a certificate of

20  authority issued by the office department, nor is it required

21  to participate as a member insurer of the Florida Insurance

22  Guaranty Association. However, the corporation is required to

23  pay, in the same manner as an authorized insurer, assessments

24  pledged by the Florida Insurance Guaranty Association to

25  secure bonds issued or other indebtedness incurred to pay

26  covered claims arising from insurer insolvencies caused by, or

27  proximately related to, hurricane losses. It is the intent of

28  the Legislature that the tax exemptions provided in this

29  paragraph will augment the financial resources of the

30  corporation to better enable the corporation to fulfill its

31  public purposes. Any bonds issued by the corporation, their

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 1  transfer, and the income therefrom, including any profit made

 2  on the sale thereof, shall at all times be free from taxation

 3  of every kind by the state and any political subdivision or

 4  local unit or other instrumentality thereof; however, this

 5  exemption does not apply to any tax imposed by chapter 220

 6  chapter 200 on interest, income, or profits on debt

 7  obligations owned by corporations other than the corporation.

 8         (k)  Upon a determination by the office department that

 9  the conditions giving rise to the establishment and activation

10  of the corporation no longer exist, the corporation is

11  dissolved. Upon dissolution, the assets of the corporation

12  association shall be applied first to pay all debts,

13  liabilities, and obligations of the corporation, including the

14  establishment of reasonable reserves for any contingent

15  liabilities or obligations, and all remaining assets of the

16  corporation shall become property of the state and be

17  deposited in the Florida Hurricane Catastrophe Fund. However,

18  no dissolution shall take effect as long as the corporation

19  has bonds or other financial obligations outstanding unless

20  adequate provision has been made for the payment of the bonds

21  or other financial obligations pursuant to the documents

22  authorizing the issuance of the bonds or other financial

23  obligations.

24         (l)1.  Effective July 1, 2002, policies of the

25  Residential Property and Casualty Joint Underwriting

26  Association shall become policies of the corporation. All

27  obligations, rights, assets and liabilities of the Residential

28  Property and Casualty Joint Underwriting Association,

29  including bonds, note and debt obligations, and the financing

30  documents pertaining to them become those of the corporation

31  as of July 1, 2002. The corporation is not required to issue

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 1  endorsements or certificates of assumption to insureds during

 2  the remaining term of in-force transferred policies.

 3         2.  Effective July 1, 2002, policies of the Florida

 4  Windstorm Underwriting Association are transferred to the

 5  corporation and shall become policies of the corporation. All

 6  obligations, rights, assets, and liabilities of the Florida

 7  Windstorm Underwriting Association, including bonds, note, and

 8  debt obligations, and the financing documents pertaining to

 9  them are transferred to and assumed by the corporation on July

10  1, 2002. The corporation is not required to issue endorsement

11  or certificates of assumption to insureds during the remaining

12  term of in-force transferred policies.

13         3.  The Florida Windstorm Underwriting Association and

14  the Residential Property and Casualty Joint Underwriting

15  Association shall take all actions as may be proper to further

16  evidence the transfers and shall provide the documents and

17  instruments of further assurance as may reasonably be

18  requested by the corporation for that purpose. The corporation

19  shall execute assumptions and instruments as the trustees or

20  other parties to the financing documents of the Florida

21  Windstorm Underwriting Association or the Residential Property

22  and Casualty Joint Underwriting Association may reasonably

23  request to further evidence the transfers and assumptions,

24  which transfers and assumptions, however, are effective on the

25  date provided under this paragraph whether or not, and

26  regardless of the date on which, the assumptions or

27  instruments are executed by the corporation. Subject to the

28  relevant financing documents pertaining to their outstanding

29  bonds, notes, indebtedness, or other financing obligations,

30  the moneys, investments, receivables, choses in action, and

31  other intangibles of the Florida Windstorm Underwriting

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 1  Association shall be credited to the high-risk account of the

 2  corporation, and those of the personal lines residential

 3  coverage account and the commercial lines residential coverage

 4  account of the Residential Property and Casualty Joint

 5  Underwriting Association shall be credited to the personal

 6  lines account and the commercial lines account, respectively,

 7  of the corporation.

 8         4.  Effective July 1, 2002, a new applicant for

 9  property insurance coverage who would otherwise have been

10  eligible for coverage in the Florida Windstorm Underwriting

11  Association is eligible for coverage from the corporation as

12  provided in this subsection.

13         5.  The transfer of all policies, obligations, rights,

14  assets, and liabilities from the Florida Windstorm

15  Underwriting Association to the corporation and the renaming

16  of the Residential Property and Casualty Joint Underwriting

17  Association as the corporation shall in no way affect the

18  coverage with respect to covered policies as defined in s.

19  215.555(2)(c) provided to these entities by the Florida

20  Hurricane Catastrophe Fund. The coverage provided by the

21  Florida Hurricane Catastrophe Fund to the Florida Windstorm

22  Underwriting Association based on its exposures as of June 30,

23  2002, and each June 30 thereafter shall be redesignated as

24  coverage for the high-risk account of the corporation.

25  Notwithstanding any other provision of law, the coverage

26  provided by the Florida Hurricane Catastrophe Fund to the

27  Residential Property and Casualty Joint Underwriting

28  Association based on its exposures as of June 30, 2002, and

29  each June 30 thereafter shall be transferred to the personal

30  lines account and the commercial lines account of the

31  corporation. Notwithstanding any other provision of law, the

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 1  high-risk account shall be treated, for all Florida Hurricane

 2  Catastrophe Fund purposes, as if it were a separate

 3  participating insurer with its own exposures, reimbursement

 4  premium, and loss reimbursement. Likewise, the personal lines

 5  and commercial lines accounts shall be viewed together, for

 6  all Florida Hurricane Catastrophe Fund purposes, as if the two

 7  accounts were one and represent a single, separate

 8  participating insurer with its own exposures, reimbursement

 9  premium, and loss reimbursement. The coverage provided by the

10  Florida Hurricane Catastrophe Fund to the corporation shall

11  constitute and operate as a full transfer of coverage from the

12  Florida Windstorm Underwriting Association and Residential

13  Property and Casualty Joint Underwriting to the corporation.

14         (m)  Notwithstanding any other provision of law:

15         1.  The pledge or sale of, the lien upon, and the

16  security interest in any rights, revenues, or other assets of

17  the corporation created or purported to be created pursuant to

18  any financing documents to secure any bonds or other

19  indebtedness of the corporation shall be and remain valid and

20  enforceable, notwithstanding the commencement of and during

21  the continuation of, and after, any rehabilitation,

22  insolvency, liquidation, bankruptcy, receivership,

23  conservatorship, reorganization, or similar proceeding against

24  the corporation under the laws of this state.

25         2.  No such proceeding shall relieve the corporation of

26  its obligation, or otherwise affect its ability to perform its

27  obligation, to continue to collect, or levy and collect,

28  assessments, market equalization or other surcharges under

29  subparagraph (c)10., or any other rights, revenues, or other

30  assets of the corporation pledged pursuant to any financing

31  documents.

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 1         3.  Each such pledge or sale of, lien upon, and

 2  security interest in, including the priority of such pledge,

 3  lien, or security interest, any such assessments, market

 4  equalization or other surcharges, or other rights, revenues,

 5  or other assets which are collected, or levied and collected,

 6  after the commencement of and during the pendency of, or

 7  after, any such proceeding shall continue unaffected by such

 8  proceeding.  As used in this subsection, the term "financing

 9  documents" means any agreement or agreements, instrument or

10  instruments, or other document or documents now existing or

11  hereafter created evidencing any bonds or other indebtedness

12  of the corporation or pursuant to which any such bonds or

13  other indebtedness has been or may be issued and pursuant to

14  which any rights, revenues, or other assets of the corporation

15  are pledged or sold to secure the repayment of such bonds or

16  indebtedness, together with the payment of interest on such

17  bonds or such indebtedness, or the payment of any other

18  obligation or financial product, as defined in the plan of

19  operation of the corporation related to such bonds or

20  indebtedness.

21         4.  Any such pledge or sale of assessments, revenues,

22  contract rights, or other rights or assets of the corporation

23  shall constitute a lien and security interest, or sale, as the

24  case may be, that is immediately effective and attaches to

25  such assessments, revenues, or contract rights or other rights

26  or assets, whether or not imposed or collected at the time the

27  pledge or sale is made.  Any such pledge or sale is effective,

28  valid, binding, and enforceable against the corporation or

29  other entity making such pledge or sale, and valid and binding

30  against and superior to any competing claims or obligations

31  owed to any other person or entity, including policyholders in

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 1  this state, asserting rights in any such assessments,

 2  revenues, or contract rights or other rights or assets to the

 3  extent set forth in and in accordance with the terms of the

 4  pledge or sale contained in the applicable financing

 5  documents, whether or not any such person or entity has notice

 6  of such pledge or sale and without the need for any physical

 7  delivery, recordation, filing, or other action.

 8         (n)1.  The following records of the corporation are

 9  confidential and exempt from the provisions of s. 119.07(1)

10  and s. 24(a), Art. I of the State Constitution:

11         a.  Underwriting files, except that a policyholder or

12  an applicant shall have access to his or her own underwriting

13  files.

14         b.  Claims files, until termination of all litigation

15  and settlement of all claims arising out of the same incident,

16  although portions of the claims files may remain exempt, as

17  otherwise provided by law. Confidential and exempt claims file

18  records may be released to other governmental agencies upon

19  written request and demonstration of need; such records held

20  by the receiving agency remain confidential and exempt as

21  provided for herein.

22         c.  Records obtained or generated by an internal

23  auditor pursuant to a routine audit, until the audit is

24  completed, or if the audit is conducted as part of an

25  investigation, until the investigation is closed or ceases to

26  be active.  An investigation is considered "active" while the

27  investigation is being conducted with a reasonable, good faith

28  belief that it could lead to the filing of administrative,

29  civil, or criminal proceedings.

30         d.  Matters reasonably encompassed in privileged

31  attorney-client communications.

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 1         e.  Proprietary information licensed to the corporation

 2  under contract and the contract provides for the

 3  confidentiality of such proprietary information.

 4         f.  All information relating to the medical condition

 5  or medical status of a corporation employee which is not

 6  relevant to the employee's capacity to perform his or her

 7  duties, except as otherwise provided in this paragraph.

 8  Information which is exempt shall include, but is not limited

 9  to, information relating to workers' compensation, insurance

10  benefits, and retirement or disability benefits.

11         g.  Upon an employee's entrance into the employee

12  assistance program, a program to assist any employee who has a

13  behavioral or medical disorder, substance abuse problem, or

14  emotional difficulty which affects the employee's job

15  performance, all records relative to that participation shall

16  be confidential and exempt from the provisions of s. 119.07(1)

17  and s. 24(a), Art. I of the State Constitution, except as

18  otherwise provided in s. 112.0455(11).

19         h.  Information relating to negotiations for financing,

20  reinsurance, depopulation, or contractual services, until the

21  conclusion of the negotiations.

22         i.  Minutes of closed meetings regarding underwriting

23  files, and minutes of closed meetings regarding an open claims

24  file until termination of all litigation and settlement of all

25  claims with regard to that claim, except that information

26  otherwise confidential or exempt by law will be redacted.

27  

28  When an authorized insurer is considering underwriting a risk

29  insured by the corporation, relevant underwriting files and

30  confidential claims files may be released to the insurer

31  provided the insurer agrees in writing, notarized and under

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 1  oath, to maintain the confidentiality of such files.  When a

 2  file is transferred to an insurer that file is no longer a

 3  public record because it is not held by an agency subject to

 4  the provisions of the public records law. Underwriting files

 5  and confidential claims files may also be released to staff of

 6  and the board of governors of the market assistance plan

 7  established pursuant to s. 627.3515, who must retain the

 8  confidentiality of such files, except such files may be

 9  released to authorized insurers that are considering assuming

10  the risks to which the files apply, provided the insurer

11  agrees in writing, notarized and under oath, to maintain the

12  confidentiality of such files.  Finally, the corporation or

13  the board or staff of the market assistance plan may make the

14  following information obtained from underwriting files and

15  confidential claims files available to licensed general lines

16  insurance agents: name, address, and telephone number of the

17  residential property owner or insured; location of the risk;

18  rating information; loss history; and policy type.  The

19  receiving licensed general lines insurance agent must retain

20  the confidentiality of the information received.

21         2.  Portions of meetings of the corporation are exempt

22  from the provisions of s. 286.011 and s. 24(b), Art. I of the

23  State Constitution wherein confidential underwriting files or

24  confidential open claims files are discussed.  All portions of

25  corporation meetings which are closed to the public shall be

26  recorded by a court reporter. The court reporter shall record

27  the times of commencement and termination of the meeting, all

28  discussion and proceedings, the names of all persons present

29  at any time, and the names of all persons speaking.  No

30  portion of any closed meeting shall be off the record.

31  Subject to the provisions hereof and s. 119.07(2)(a), the

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 1  court reporter's notes of any closed meeting shall be retained

 2  by the corporation for a minimum of 5 years. A copy of the

 3  transcript, less any exempt matters, of any closed meeting

 4  wherein claims are discussed shall become public as to

 5  individual claims after settlement of the claim.

 6         (o)  It is the intent of the Legislature that the

 7  amendments to this subsection enacted in 2002 should, over

 8  time, reduce the probable maximum windstorm losses in the

 9  residual markets and should reduce the potential assessments

10  to be levied on property insurers and policyholders statewide.

11  In furtherance of this intent:

12         1.  The board shall, on or before February 1 of each

13  year, provide a report to the President of the Senate and the

14  Speaker of the House of Representatives showing the reduction

15  or increase in the 100-year probable maximum loss attributable

16  to wind-only coverages and the quota share program under this

17  subsection combined, as compared to the benchmark 100-year

18  probable maximum loss of the Florida Windstorm Underwriting

19  Association.  For purposes of this paragraph, the benchmark

20  100-year probable maximum loss of the Florida Windstorm

21  Underwriting Association shall be the calculation dated

22  February 2001 and based on November 30, 2000, exposures.  In

23  order to ensure comparability of data, the board shall use the

24  same methods for calculating its probable maximum loss as were

25  used to calculate the benchmark probable maximum loss.

26         2.  Beginning February 1, 2007, if the report under

27  subparagraph 1. for any year indicates that the 100-year

28  probable maximum loss attributable to wind-only coverages and

29  the quota share program combined does not reflect a reduction

30  of at least 25 percent from the benchmark, the board shall

31  reduce the boundaries of the high-risk area eligible for

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 1  wind-only coverages under this subsection in a manner

 2  calculated to reduce such probable maximum loss to an amount

 3  at least 25 percent below the benchmark.

 4         3.  Beginning February 1, 2012, if the report under

 5  subparagraph 1. for any year indicates that the 100-year

 6  probable maximum loss attributable to wind-only coverages and

 7  the quota share program combined does not reflect a reduction

 8  of at least 50 percent from the benchmark, the boundaries of

 9  the high-risk area eligible for wind-only coverages under this

10  subsection shall be reduced by the elimination of any area

11  that is not seaward of a line 1,000 feet inland from the

12  Intracoastal Waterway.

13         (p)  In enacting the provisions of this section, the

14  Legislature recognizes that both the Florida Windstorm

15  Underwriting Association and the Residential Property and

16  Casualty Joint Underwriting Association have entered into

17  financing arrangements that obligate each entity to service

18  its debts and maintain the capacity to repay funds secured

19  under these financing arrangements. It is the intent of the

20  Legislature that nothing in this section be construed to

21  compromise, diminish, or interfere with the rights of

22  creditors under such financing arrangements. It is further the

23  intent of the Legislature to preserve the obligations of the

24  Florida Windstorm Underwriting Association and Residential

25  Property and Casualty Joint Underwriting Association with

26  regard to outstanding financing arrangements, with such

27  obligations passing entirely and unchanged to the corporation

28  and, specifically, to the applicable account of the

29  corporation. So long as any bonds, notes, indebtedness, or

30  other financing obligations of the Florida Windstorm

31  Underwriting Association or the Residential Property and

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 1  Casualty Joint Underwriting Association are outstanding, under

 2  the terms of the financing documents pertaining to them, the

 3  governing board of the corporation shall have and shall

 4  exercise the authority to levy, charge, collect, and receive

 5  all premiums, assessments, surcharges, charges, revenues, and

 6  receipts that the associations had authority to levy, charge,

 7  collect, or receive under the provisions of subsection (2) and

 8  this subsection, respectively, as they existed on January 1,

 9  2002, to provide moneys, without exercise of the authority

10  provided by this subsection, in at least the amounts, and by

11  the times, as would be provided under those former provisions

12  of subsection (2) or this subsection, respectively, so that

13  the value, amount, and collectability of any assets, revenues,

14  or revenue source pledged or committed to, or any lien thereon

15  securing such outstanding bonds, notes, indebtedness, or other

16  financing obligations will not be diminished, impaired, or

17  adversely affected by the amendments made by this act and to

18  permit compliance with all provisions of financing documents

19  pertaining to such bonds, notes, indebtedness, or other

20  financing obligations, or the security or credit enhancement

21  for them, and any reference in this subsection to bonds,

22  notes, indebtedness, financing obligations, or similar

23  obligations, of the corporation shall include like instruments

24  or contracts of the Florida Windstorm Underwriting Association

25  and the Residential Property and Casualty Joint Underwriting

26  Association to the extent not inconsistent with the provisions

27  of the financing documents pertaining to them.

28         (q)  Effective January 7, 2003, any reference in this

29  subsection to the Treasurer shall be deemed to be a reference

30  to the Chief Financial Officer and any reference to the

31  Department of Insurance shall be deemed to be a reference to

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 1  the Department of Insurance and Financial Services or other

 2  successor to the Department of Insurance specified by law.

 3         (q)(r)  The corporation shall not require the securing

 4  of flood insurance as a condition of coverage if the insured

 5  or applicant executes a form approved by the office department

 6  affirming that flood insurance is not provided by the

 7  corporation and that if flood insurance is not secured by the

 8  applicant or insured in addition to coverage by the

 9  corporation, the risk will not be covered for flood damage. A

10  corporation policyholder electing not to secure flood

11  insurance and executing a form as provided herein making a

12  claim for water damage against the corporation shall have the

13  burden of proving the damage was not caused by flooding.

14  Notwithstanding other provisions of this subsection, the

15  corporation may deny coverage to an applicant or insured who

16  refuses to execute the form described herein.

17         Section 1102.  Section 627.3511, Florida Statutes, is

18  amended to read:

19         627.3511  Depopulation of Citizens Property Insurance

20  Corporation Residential Property and Casualty Joint

21  Underwriting Association.--

22         (1)  LEGISLATIVE INTENT.--The Legislature finds that

23  the public policy of this state requires the maintenance of a

24  residual market for residential property insurance. It is the

25  intent of the Legislature to provide a variety of financial

26  incentives to encourage the replacement of the highest

27  possible number of Citizens Property Insurance Corporation

28  Residential Property and Casualty Joint Underwriting

29  Association policies with policies written by admitted

30  insurers at approved rates.

31  

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 1         (2)  TAKE-OUT BONUS.--The Citizens Property Insurance

 2  Corporation Residential Property and Casualty Joint

 3  Underwriting Association shall pay the sum of up to $100 to an

 4  insurer for each risk that the insurer removes from the

 5  corporation association, either by issuance of a policy upon

 6  expiration or cancellation of the corporation association

 7  policy or by assumption of the corporation's association's

 8  obligations with respect to an in-force policy.  Such payment

 9  is subject to approval of the corporation association board.

10  In order to qualify for the bonus under this subsection, the

11  take-out plan must include a minimum of 25,000 policies.

12  Within 30 days after approval by the board, the office

13  department may reject the insurer's take-out plan and

14  disqualify the insurer from the bonus, based on the following

15  criteria:

16         (a)  The capacity of the insurer to absorb the policies

17  proposed to be taken out of the corporation association and

18  the concentration of risks of those policies.

19         (b)  Whether the geographic and risk characteristics of

20  policies in the proposed take-out plan serve to reduce the

21  exposure of the corporation association sufficiently to

22  justify the bonus.

23         (c)  Whether coverage for risks to be taken out

24  otherwise exists in the admitted voluntary market.

25         (d)  The degree to which the take-out bonus is

26  promoting new capital being allocated by the insurer to

27  Florida residential property coverage.

28         (3)  EXEMPTION FROM DEFICIT ASSESSMENTS.--

29         (a)  The calculation of an insurer's assessment

30  liability under s. 627.351(6)(b)3.a. or b. shall, for an

31  insurer that in any calendar year removes 50,000 or more risks

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 1  from the Citizens Property Insurance Corporation Residential

 2  Property and Casualty Joint Underwriting Association, either

 3  by issuance of a policy upon expiration or cancellation of the

 4  corporation association policy or by assumption of the

 5  corporation's association's obligations with respect to

 6  in-force policies, exclude such removed policies for the

 7  succeeding 3 years, as follows:

 8         1.  In the first year following removal of the risks,

 9  the risks are excluded from the calculation to the extent of

10  100 percent.

11         2.  In the second year following removal of the risks,

12  the risks are excluded from the calculation to the extent of

13  75 percent.

14         3.  In the third year following removal of the risks,

15  the risks are excluded from the calculation to the extent of

16  50 percent.

17  

18  If the removal of risks is accomplished through assumption of

19  obligations with respect to in-force policies, the corporation

20  association shall pay to the assuming insurer all unearned

21  premium with respect to such policies less any policy

22  acquisition costs agreed to by the corporation association and

23  assuming insurer. The term "policy acquisition costs" is

24  defined as costs of issuance of the policy by the corporation

25  association which includes agent commissions, servicing

26  company fees, and premium tax. This paragraph does not apply

27  to an insurer that, at any time within 5 years before removing

28  the risks, had a market share in excess of 0.1 percent of the

29  statewide aggregate gross direct written premium for any line

30  of property insurance, or to an affiliate of such an insurer.

31  This paragraph does not apply unless either at least 40

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 1  percent of the risks removed from the corporation association

 2  are located in Dade, Broward, and Palm Beach Counties, or at

 3  least 30 percent of the risks removed from the corporation

 4  association are located in such counties and an additional 50

 5  percent of the risks removed from the corporation association

 6  are located in other coastal counties.

 7         (b)  An insurer that first wrote personal lines

 8  residential property coverage in this state on or after July

 9  1, 1994, is exempt from regular deficit assessments imposed

10  pursuant to s. 627.351(6)(b)3.a. and b., but not emergency

11  assessments collected from policyholders pursuant to s.

12  627.351(6)(b)3.d., of the Citizens Property Insurance

13  Corporation Residential Property and Casualty Joint

14  Underwriting Association until the earlier of the following:

15         1.  The end of the calendar year in which it first

16  wrote 0.5 percent or more of the statewide aggregate direct

17  written premium for any line of residential property coverage;

18  or

19         2.  December 31, 1997, or December 31 of the third year

20  in which it wrote such coverage in this state, whichever is

21  later.

22         (c)  Other than an insurer that is exempt under

23  paragraph (b), an insurer that in any calendar year increases

24  its total structure exposure subject to wind coverage by 25

25  percent or more over its exposure for the preceding calendar

26  year is, with respect to that year, exempt from deficit

27  assessments imposed pursuant to s. 627.351(6)(b)3.a. and b.,

28  but not emergency assessments collected from policyholders

29  pursuant to s. 627.351(6)(b)3.d., of the Citizens Property

30  Insurance Corporation Residential Property and Casualty Joint

31  

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 1  Underwriting Association attributable to such increase in

 2  exposure.

 3         (d)  Any exemption or credit from regular assessments

 4  authorized by this section shall last no longer than 3 years

 5  following the cancellation or expiration of the policy by the

 6  corporation association. With the approval of the office

 7  department, the board may extend such credits for an

 8  additional year if the insurer guarantees an additional year

 9  of renewability for all policies removed from the corporation

10  association, or for 2 additional years if the insurer

11  guarantees 2 additional years of renewability for all policies

12  so removed.

13         (4)  AGENT BONUS.--When the corporation Residential

14  Property and Casualty Joint Underwriting Association enters

15  into a contractual agreement for a take-out plan that provides

16  a bonus to the insurer, the producing agent of record of the

17  corporation association policy is entitled to retain any

18  unearned commission on such policy, and the insurer shall

19  either:

20         (a)  Pay to the producing agent of record of the

21  association policy, for the first year, an amount that is the

22  greater of the insurer's usual and customary commission for

23  the type of policy written or a fee equal to the usual and

24  customary commission of the corporation association; or

25         (b)  Offer to allow the producing agent of record of

26  the corporation association policy to continue servicing the

27  policy for a period of not less than 1 year and offer to pay

28  the agent the greater of the insurer's or the corporation's

29  association's usual and customary commission for the type of

30  policy written.

31  

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 1  If the producing agent is unwilling or unable to accept

 2  appointment, the new insurer shall pay the agent in accordance

 3  with paragraph (a). The requirement of this subsection that

 4  the producing agent of record is entitled to retain the

 5  unearned commission on an association policy does not apply to

 6  a policy for which coverage has been provided in the

 7  association for 30 days or less or for which a cancellation

 8  notice has been issued pursuant to s. 627.351(6)(c)11. during

 9  the first 30 days of coverage.

10         (5)  APPLICABILITY.--

11         (a)  The take-out bonus provided by subsection (2) and

12  the exemption from assessment provided by paragraph (3)(a)

13  apply only if the corporation association policy is replaced

14  by either a standard policy including wind coverage or, if

15  consistent with the insurer's underwriting rules as filed with

16  the office department, a basic policy including wind coverage;

17  however, with respect to risks located in areas where coverage

18  through the high-risk account of the corporation Florida

19  Windstorm Underwriting Association is available, the

20  replacement policy need not provide wind coverage. The insurer

21  must renew the replacement policy at approved rates on

22  substantially similar terms for two additional 1-year terms,

23  unless canceled by the insurer for a lawful reason other than

24  reduction of hurricane exposure. If an insurer assumes the

25  corporation's association's obligations for a policy, it must

26  issue a replacement policy for a 1-year term upon expiration

27  of the corporation association policy and must renew the

28  replacement policy at approved rates on substantially similar

29  terms for two additional 1-year terms, unless canceled by the

30  insurer for a lawful reason other than reduction of hurricane

31  exposure. For each replacement policy canceled or nonrenewed

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 1  by the insurer for any reason during the 3-year coverage

 2  period required by this paragraph, the insurer must remove

 3  from the corporation association one additional policy

 4  covering a risk similar to the risk covered by the canceled or

 5  nonrenewed policy.  In addition to these requirements, the

 6  corporation association must place the bonus moneys in escrow

 7  for a period of 3 years; such moneys may be released from

 8  escrow only to pay claims. A take-out bonus provided by

 9  subsection (2) or subsection (6) shall not be considered

10  premium income for purposes of taxes and assessments under the

11  Florida Insurance Code and shall remain the property of the

12  corporation Residential Property and Casualty Joint

13  Underwriting Association, subject to the prior security

14  interest of the insurer under the escrow agreement until it is

15  released from escrow, and after it is released from escrow it

16  shall be considered an asset of the insurer and credited to

17  the insurer's capital and surplus.

18         (b)  It is the intent of the Legislature that an

19  insurer eligible for the exemption under paragraph (3)(a)

20  establish a preference in appointment of agents for those

21  agents who lose a substantial amount of business as a result

22  of risks being removed from the corporation association.

23         (6)  COMMERCIAL RESIDENTIAL TAKE-OUT PLANS.--

24         (a)  The corporation Residential Property and Casualty

25  Joint Underwriting Association shall pay a bonus to an insurer

26  for each commercial residential policy that the insurer

27  removes from the corporation association pursuant to an

28  approved take-out plan, either by issuance of a new policy

29  upon expiration of the corporation association policy or by

30  assumption of the corporation's association's obligations with

31  respect to an in-force policy. The corporation association

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 1  board shall determine the amount of the bonus based on such

 2  factors as the coverage provided, relative hurricane risk, the

 3  length of time that the property has been covered by the

 4  corporation association, and the criteria specified in

 5  paragraphs (b) and (c). The amount of the bonus with respect

 6  to a particular policy may not exceed 25 percent of the

 7  corporation's association's 1-year premium for the policy.

 8  Such payment is subject to approval of the corporation

 9  association board. In order to qualify for the bonus under

10  this subsection, the take-out plan must include policies

11  reflecting at least $100 million in structure exposure.

12         (b)  In order for a plan to qualify for approval:

13         1.  At least 40 percent of the policies removed from

14  the corporation association under the plan must be located in

15  Dade, Broward, and Palm Beach Counties, or at least 30 percent

16  of the policies removed from the corporation association under

17  the plan must be located in such counties and an additional 50

18  percent of the policies removed from the corporation

19  association must be located in other coastal counties.

20         2.  The insurer must renew the replacement policy at

21  approved rates on substantially similar terms for two

22  additional 1-year terms, unless canceled or nonrenewed by the

23  insurer for a lawful reason other than reduction of hurricane

24  exposure. If an insurer assumes the corporation's

25  association's obligations for a policy, it must issue a

26  replacement policy for a 1-year term upon expiration of the

27  corporation association policy and must renew the replacement

28  policy at approved rates on substantially similar terms for

29  two additional 1-year terms, unless canceled by the insurer

30  for a lawful reason other than reduction of hurricane

31  exposure. For each replacement policy canceled or nonrenewed

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 1  by the insurer for any reason during the 3-year coverage

 2  period required by this subparagraph, the insurer must remove

 3  from the corporation association one additional policy

 4  covering a risk similar to the risk covered by the canceled or

 5  nonrenewed policy.

 6         (c)  A take-out plan is deemed approved unless the

 7  office department, within 120 days after the board votes to

 8  recommend the plan, disapproves the plan based on:

 9         1.  The capacity of the insurer to absorb the policies

10  proposed to be taken out of the corporation association and

11  the concentration of risks of those policies.

12         2.  Whether the geographic and risk characteristics of

13  policies in the proposed take-out plan serve to reduce the

14  exposure of the corporation association sufficiently to

15  justify the bonus.

16         3.  Whether coverage for risks to be taken out

17  otherwise exists in the admitted voluntary market.

18         4.  The degree to which the take-out bonus is promoting

19  new capital being allocated by the insurer to residential

20  property coverage in this state.

21         (d)  The calculation of an insurer's regular assessment

22  liability under s. 627.351(b)3.a. and b., but not emergency

23  assessments collected from policyholders pursuant to s.

24  627.351(6)(b)3.d., shall, with respect to commercial

25  residential policies removed from the corporation association

26  under an approved take-out plan, exclude such removed policies

27  for the succeeding 3 years, as follows:

28         1.  In the first year following removal of the

29  policies, the policies are excluded from the calculation to

30  the extent of 100 percent.

31  

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 1         2.  In the second year following removal of the

 2  policies, the policies are excluded from the calculation to

 3  the extent of 75 percent.

 4         3.  In the third year following removal of the

 5  policies, the policies are excluded from the calculation to

 6  the extent of 50 percent.

 7         (e)  An insurer that first wrote commercial residential

 8  property coverage in this state on or after June 1, 1996, is

 9  exempt from regular assessments under s. 627.351(6)(b)3.a. and

10  b., but not emergency assessments collected from policyholders

11  pursuant to s. 627.351(6)(b)3.d., with respect to commercial

12  residential policies until the earlier of:

13         1.  The end of the calendar year in which such insurer

14  first wrote 0.5 percent or more of the statewide aggregate

15  direct written premium for commercial residential property

16  coverage; or

17         2.  December 31 of the third year in which such insurer

18  wrote commercial residential property coverage in this state.

19         (f)  An insurer that is not otherwise exempt from

20  regular assessments under s. 627.351(6)(b)3.a. and b. with

21  respect to commercial residential policies is, for any

22  calendar year in which such insurer increased its total

23  commercial residential hurricane exposure by 25 percent or

24  more over its exposure for the preceding calendar year, exempt

25  from regular assessments under s. 627.351(6)(b)3.a. and b.,

26  but not emergency assessments collected from policyholders

27  pursuant to s. 627.351(6)(b)3.d., attributable to such

28  increased exposure.

29         (7)  A minority business, which is at least 51 percent

30  owned by minority persons as described in s. 288.703(3),

31  desiring to operate or become licensed as a property and

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 1  casualty insurer may exempt up to $50 of the escrow

 2  requirements of the take-out bonus, as described in this

 3  section.  Such minority business, which has applied for a

 4  certificate of authority to engage in business as a property

 5  and casualty insurer, may simultaneously file the business'

 6  proposed take-out plan, as described in this section, with the

 7  corporation to the Residential Property and Casualty Joint

 8  Underwriting Association.

 9         Section 1103.  Subsections (3) and (4) of section

10  627.3512, Florida Statutes, are amended to read:

11         627.3512  Recoupment of residual market deficit

12  assessments.--

13         (3)  The insurer or insurer group shall file with the

14  office department a statement setting forth the amount of the

15  assessment factor and an explanation of how the factor will be

16  applied, at least 15 days prior to the factor being applied to

17  any policies.  The statement shall include documentation of

18  the assessment paid by the insurer or insurer group and the

19  arithmetic calculations supporting the assessment factor.  The

20  office department shall complete its review within 15 days

21  after receipt of the filing and shall limit its review to

22  verification of the arithmetic calculations.  The insurer or

23  insurer group may use the assessment factor at any time after

24  the expiration of the 15-day period unless the office

25  department has notified the insurer or insurer group in

26  writing that the arithmetic calculations are incorrect.

27         (4)  The commission department may adopt rules to

28  implement this section.

29         Section 1104.  Section 627.3513, Florida Statutes, is

30  amended to read:

31  

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 1         627.3513  Standards for sale of bonds by Citizens

 2  Property Insurance Corporation underwriting associations.--

 3         (1)(a)  The purpose of this section is to provide

 4  standards for the sale of bonds pursuant to s. 627.351(2) and

 5  (6).

 6         (b)  The term "corporation," as used in this section,

 7  means the Citizens Property Insurance Corporation.

 8  "Association" or "associations," for purposes of this section,

 9  means the Florida Windstorm Underwriting Association and the

10  Residential Property and Casualty Joint Underwriting

11  Association as established pursuant to s. 627.351(2) and (6),

12  and any corporation or other entity established pursuant to

13  those subsections.

14         (2)  The plan of operation of the corporation each

15  association shall provide for the selection of financial

16  services providers and underwriters. Such provisions shall

17  include the method for publicizing or otherwise providing

18  reasonable notice to potential financial services providers,

19  underwriters, and other interested parties, which may include

20  expedited procedures and methods for emergency situations. The

21  corporation associations shall not engage the services of any

22  person or firm as a securities broker or bond underwriter that

23  is not eligible to be engaged by the state under the

24  provisions of s. 215.684. The corporation associations shall

25  make all selections of financial service providers and

26  managing underwriters at a noticed public meeting.

27         (3)  The plan of operation of the corporation each

28  association shall provide for any managing underwriter or

29  financial adviser to provide to the corporation association a

30  disclosure statement containing at least the following

31  information:

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 1         (a)  An itemized list setting forth the nature and

 2  estimated amounts of expenses to be incurred by the managing

 3  underwriter in connection with the issuance of such bonds.

 4  Notwithstanding the foregoing, any such list may include an

 5  item for miscellaneous expenses, provided such item includes

 6  only minor items of expense which cannot be easily categorized

 7  elsewhere in the statement.

 8         (b)  The names, addresses, and estimated amounts of

 9  compensation of any finders connected with the issuance of the

10  bonds.

11         (c)  The amount of underwriting spread expected to be

12  realized and the amount of fees and expenses expected to be

13  paid to the financial adviser.

14         (d)  Any management fee charged by the managing

15  underwriter.

16         (e)  Any other fee, bonus, or compensation estimated to

17  be paid by the managing underwriter in connection with the

18  bond issue to any person not regularly employed or retained by

19  it.

20         (f)  The name and address of each financial adviser or

21  managing underwriter, if any, connected with the bond issue.

22         (g)  Any other disclosure which the corporation

23  association may require.

24         (4)(a)  No underwriter, commercial bank, investment

25  banker, or financial consultant or adviser shall pay any

26  finder any bonus, fee, or gratuity in connection with the sale

27  of bonds issued by the corporation association unless full

28  disclosure is made in writing to the corporation association

29  prior to or concurrently with the submission of a purchase

30  proposal for bonds by the underwriter, commercial bank,

31  investment banker, or financial consultant or adviser,

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 1  providing the name and address of any finder and the amount of

 2  bonus, fee, or gratuity paid to such finder. A violation of

 3  this subsection shall not affect the validity of the bond

 4  issue.

 5         (b)  As used in this subsection, the term "finder"

 6  means a person who is neither regularly employed by, nor a

 7  partner or officer of, an underwriter, bank, banker, or

 8  financial consultant or adviser and who enters into an

 9  understanding with either the issuer or the managing

10  underwriter, or both, for any paid or promised compensation or

11  valuable consideration, directly or indirectly, expressed or

12  implied, to act solely as an intermediary between such issuer

13  and managing underwriter for the purpose of influencing any

14  transaction in the purpose of such bonds.

15         (5)  This section is not intended to restrict or

16  prohibit the employment of professional services relating to

17  bonds issued under s. 627.351(6) s. 627.351(2) or (6) or the

18  issuance of bonds by the corporation associations.

19         (6)  The failure of the corporation association to

20  comply with one or more provisions of this section shall not

21  affect the validity of the bond issue; however, the failure of

22  the corporation either association to comply in good faith

23  both with this section and with the plan as amended shall be a

24  violation of its plan of operation and a violation of the

25  insurance code.

26         Section 1105.  Section 627.3515, Florida Statutes, is

27  amended to read:

28         627.3515  Market assistance plan; property and casualty

29  risks.--

30         (1)  The office department shall adopt a market

31  assistance plan to assist in the placement of risks of

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 1  applicants who are unable to procure property insurance as

 2  defined in s. 624.604 or casualty insurance as defined in s.

 3  624.605(1)(b), (e), (f), (g), or (h) from authorized insurers

 4  when such insurance is otherwise generally available from

 5  insurers authorized to transact and actually writing that kind

 6  and class of insurance in this state. Through such measures as

 7  are found appropriate by the board of governors, the market

 8  assistance plan shall take affirmative steps to assist in the

 9  removal from the Citizens Property Insurance Corporation

10  Residential Property and Casualty Joint Underwriting

11  Association any risk that can be placed in the voluntary

12  market. All property and casualty insurers licensed in this

13  state shall participate in the plan.

14         (2)(a)  Each person serving as a member of the board of

15  governors of the Citizens Property Insurance Corporation

16  Residential Property and Casualty Joint Underwriting

17  Association shall also serve as a member of the board of

18  governors of the market assistance plan.

19         (b)  The plan shall be funded through payments from the

20  Citizens Property Insurance Corporation Residential Property

21  and Casualty Joint Underwriting Association and annual

22  assessments of residential property insurers in the amount of

23  $450.

24         (c)  The plan is not required to assist in the

25  placement of any workers' compensation, employer's liability,

26  malpractice, or motor vehicle insurance coverage.

27         Section 1106.  Section 627.3517, Florida Statutes, is

28  amended to read:

29         627.3517  Consumer choice.--No provision of s. 627.351,

30  s. 627.3511, or s. 627.3515 shall be construed to impair the

31  right of any insurance risk apportionment plan policyholder,

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 1  upon receipt of any keepout or take-out offer, to retain his

 2  or her current agent, so long as that agent is duly licensed

 3  and appointed by the insurance risk apportionment plan or

 4  otherwise authorized to place business with the insurance risk

 5  apportionment plan. This right shall not be canceled,

 6  suspended, impeded, abridged, or otherwise compromised by any

 7  rule, plan of operation, or depopulation plan, whether through

 8  keepout, take-out, midterm assumption, or any other means, of

 9  any insurance risk apportionment plan or depopulation plan,

10  including, but not limited to, those described in s. 627.351,

11  s. 627.3511, or s. 627.3515. The commission department shall

12  adopt any rules necessary to cause any insurance risk

13  apportionment plan or market assistance plan under such

14  sections to demonstrate that the operations of the plan do not

15  interfere with, promote, or allow interference with the rights

16  created under this section. If the policyholder's current

17  agent is unable or unwilling to be appointed with the insurer

18  making the take-out or keepout offer, the policyholder shall

19  not be disqualified from participation in the appropriate

20  insurance risk apportionment plan because of an offer of

21  coverage in the voluntary market. An offer of full property

22  insurance coverage by the insurer currently insuring either

23  the ex-wind or wind-only coverage on the policy to which the

24  offer applies shall not be considered a take-out or keepout

25  offer. Any rule, plan of operation, or plan of depopulation,

26  through keepout, take-out, midterm assumption, or any other

27  means, of any property insurance risk apportionment plan under

28  s. 627.351(2) or (6) is subject to ss. 627.351(2)(b) and

29  (6)(c) and 627.3511(4).

30  

31  

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 1         Section 1107.  Subsections (2), (4), and (6),

 2  paragraphs (c) and (h) of subsection (7), and subsection (8)

 3  of section 627.357, Florida Statutes, are amended to read:

 4         627.357  Medical malpractice self-insurance.--

 5         (2)  A group or association of health care providers

 6  composed of any number of members, is authorized to

 7  self-insure against claims arising out of the rendering of, or

 8  failure to render, medical care or services, or against claims

 9  for injury or death to the insured's patients arising out of

10  the insured's activities, upon obtaining approval from the

11  office department and upon complying with the following

12  conditions:

13         (a)  Establishment of a Medical Malpractice Risk

14  Management Trust Fund to provide coverage against professional

15  medical malpractice liability.

16         (b)  Employment of professional consultants for loss

17  prevention and claims management coordination under a risk

18  management program.

19         (4)  The fund is subject to regulation and

20  investigation by the office department.  The fund is subject

21  to rules of the commission department and to part IX of

22  chapter 626, relating to trade practices and frauds.

23         (6)  The commission department shall adopt rules to

24  implement this section, including rules that ensure that a

25  trust fund maintains a sufficient reserve to cover contingent

26  liabilities under subsection (7) in the event of its

27  dissolution.

28         (7)

29         (c)  The trust fund may from time to time assess

30  members of the fund liable therefor under the terms of their

31  policies and pursuant to this section.  The office department

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 1  may assess the members in the event of liquidation of the

 2  fund.

 3         (h)  If the trust fund fails to make an assessment as

 4  required by paragraph (g), the office department shall order

 5  the fund to do so.  If the deficiency is not sufficiently made

 6  up within 60 days after the date of the order, the fund is

 7  deemed insolvent and grounds exist to proceed against the fund

 8  as provided for in part I of chapter 631.

 9         (8)  The expense factors associated with rates used by

10  a fund shall be filed with the office department at least 30

11  days prior to use and may not be used until approved by the

12  office department.  The office department shall disapprove the

13  rates unless the filed expense factors associated therewith

14  are justified and reasonable for the benefits and services

15  provided.

16         Section 1108.  Section 627.361, Florida Statutes, is

17  amended to read:

18         627.361  False or misleading information.--No person

19  shall willfully withhold information from or knowingly give

20  false or misleading information to the office department, any

21  statistical agency designated by the office department, any

22  rating organization, or any insurer, which will affect the

23  rates or premiums chargeable under this part.

24         Section 1109.  Section 627.371, Florida Statutes, is

25  amended to read:

26         627.371  Hearings.--

27         (1)  Any person aggrieved by any rate charged, rating

28  plan, rating system, or underwriting rule followed or adopted

29  by an insurer, and any person aggrieved by any rating plan,

30  rating system, or underwriting rule followed or adopted by a

31  rating organization, may herself or himself or by her or his

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 1  authorized representative make written request of the insurer

 2  or rating organization to review the manner in which the rate,

 3  plan, system, or rule has been applied with respect to

 4  insurance afforded her or him.  If the request is not granted

 5  within 30 days after it is made, the requester may treat it as

 6  rejected.  Any person aggrieved by the refusal of an insurer

 7  or rating organization to grant the review requested, or by

 8  the failure or refusal to grant all or part of the relief

 9  requested, may file a written complaint with the office

10  department, specifying the grounds relied upon.  If the office

11  department has already disposed of the issue as raised by a

12  similar complaint or believes that probable cause for the

13  complaint does not exist or that the complaint is not made in

14  good faith, it shall so notify the complainant. Otherwise, and

15  if it also finds that the complaint charges a violation of

16  this chapter and that the complainant would be aggrieved if

17  the violation is proven, it shall proceed as provided in

18  subsection (2).

19         (2)  If after examination of an insurer, rating

20  organization, advisory organization, or group, association, or

21  other organization of insurers which engages in joint

22  underwriting or joint reinsurance, upon the basis of other

23  information, or upon sufficient complaint as provided in

24  subsection (1), the office department has good cause to

25  believe that such insurer, organization, group, or

26  association, or any rate, rating plan, or rating system made

27  or used by any such insurer or rating organization, does not

28  comply with the requirements and standards of this part

29  applicable to it, it shall, unless it has good cause to

30  believe such noncompliance is willful, give notice in writing

31  to such insurer, organization, group, or association stating

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 1  therein in what manner and to what extent noncompliance is

 2  alleged to exist and specifying therein a reasonable time, not

 3  less than 10 days thereafter, in which the noncompliance may

 4  be corrected, including any premium adjustment.

 5         (3)  If the office department has good cause to believe

 6  that such noncompliance is willful or if, within the period

 7  prescribed by the office department in the notice required by

 8  subsection (2), the insurer, organization, group, or

 9  association does not make such changes as may be necessary to

10  correct the noncompliance specified by the office department

11  or establish to the satisfaction of the office department that

12  such specified noncompliance does not exist, then the office

13  department is required to proceed to further determine the

14  matter.  If no notice has been given as provided in subsection

15  (2), the notice shall state in what manner and to what extent

16  noncompliance is alleged to exist. The proceedings shall not

17  consider any subject not specified in the notice required by

18  subsections (2) and (3).

19         Section 1110.  Section 627.381, Florida Statutes, is

20  amended to read:

21         627.381  Penalty for violation.--

22         (1)  The office department may, if it finds that any

23  person or organization has violated any provision of this

24  part, impose an administrative fine pursuant to s. 624.4211.

25         (2)  The office department may suspend the license or

26  authority of any rating organization or insurer which fails to

27  comply with an order of the office department within the time

28  limited by such order, or any extension thereof which the

29  office department may grant.  The office department shall not

30  suspend the license or authority of any rating organization or

31  insurer for failure to comply with an order until the time

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 1  prescribed for an appeal therefrom has expired or, if an

 2  appeal has been taken, until such order has been affirmed. The

 3  office department may determine when a suspension of license

 4  or authority shall become effective and it shall remain in

 5  effect for the period fixed by it, unless it modifies or

 6  rescinds such suspension, or until the order upon which such

 7  suspension is based is modified, rescinded, or reversed.

 8         Section 1111.  Paragraph (i) of subsection (2) of

 9  section 627.4035, Florida Statutes, is amended to read:

10         627.4035  Cash payment of premiums; claims.--

11         (2)  Subsection (1) is not applicable to:

12         (i)  Such other methods of paying for life insurance as

13  may be permitted by the commission department pursuant to rule

14  or regulation.

15         Section 1112.  Section 627.410, Florida Statutes, is

16  amended to read:

17         627.410  Filing, approval of forms.--

18         (1)  No basic insurance policy or annuity contract

19  form, or application form where written application is

20  required and is to be made a part of the policy or contract,

21  or group certificates issued under a master contract delivered

22  in this state, or printed rider or endorsement form or form of

23  renewal certificate, shall be delivered or issued for delivery

24  in this state, unless the form has been filed with the office

25  department at its offices in Tallahassee by or in behalf of

26  the insurer which proposes to use such form and has been

27  approved by the office department. This provision does not

28  apply to surety bonds or to policies, riders, endorsements, or

29  forms of unique character which are designed for and used with

30  relation to insurance upon a particular subject (other than as

31  to health insurance), or which relate to the manner of

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 1  distribution of benefits or to the reservation of rights and

 2  benefits under life or health insurance policies and are used

 3  at the request of the individual policyholder, contract

 4  holder, or certificateholder.  As to group insurance policies

 5  effectuated and delivered outside this state but covering

 6  persons resident in this state, the group certificates to be

 7  delivered or issued for delivery in this state shall be filed

 8  with the office department for information purposes only.

 9         (2)  Every such filing must be made not less than 30

10  days in advance of any such use or delivery.  At the

11  expiration of such 30 days, the form so filed will be deemed

12  approved unless prior thereto it has been affirmatively

13  approved or disapproved by order of the office department. The

14  approval of any such form by the office department constitutes

15  a waiver of any unexpired portion of such waiting period.  The

16  office department may extend by not more than an additional 15

17  days the period within which it may so affirmatively approve

18  or disapprove any such form, by giving notice of such

19  extension before expiration of the initial 30-day period.  At

20  the expiration of any such period as so extended, and in the

21  absence of such prior affirmative approval or disapproval, any

22  such form shall be deemed approved.

23         (3)  The office department may, for cause, withdraw a

24  previous approval. No insurer shall issue or use any form

25  disapproved by the office department, or as to which the

26  office department has withdrawn approval, after the effective

27  date of the order of the office department.

28         (4)  The office department may, by order, exempt from

29  the requirements of this section for so long as it deems

30  proper any insurance document or form or type thereof as

31  specified in such order, to which, in its opinion, this

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 1  section may not practicably be applied, or the filing and

 2  approval of which are, in its opinion, not desirable or

 3  necessary for the protection of the public.

 4         (5)  This section also applies to any such form used by

 5  domestic insurers for delivery in a jurisdiction outside this

 6  state if the insurance supervisory official of such

 7  jurisdiction informs the office department that such form is

 8  not subject to approval or disapproval by such official, and

 9  upon the order of the office department requiring the form to

10  be submitted to it for the purpose.  The applicable same

11  standards apply to such forms as apply to forms for domestic

12  use.

13         (6)(a)  An insurer shall not deliver or issue for

14  delivery or renew in this state any health insurance policy

15  form until it has filed with the office department a copy of

16  every applicable rating manual, rating schedule, change in

17  rating manual, and change in rating schedule; if rating

18  manuals and rating schedules are not applicable, the insurer

19  must file with the order department applicable premium rates

20  and any change in applicable premium rates. This paragraph

21  does not apply to group health insurance policies, effectuated

22  and delivered in this state, insuring groups of 51 or more

23  persons, except for Medicare supplement insurance, long-term

24  care insurance, and any coverage under which the increase in

25  claim costs over the lifetime of the contract due to advancing

26  age or duration is prefunded in the premium.

27         (b)  The commission department may establish by rule,

28  for each type of health insurance form, procedures to be used

29  in ascertaining the reasonableness of benefits in relation to

30  premium rates and may, by rule, exempt from any requirement of

31  paragraph (a) any health insurance policy form or type thereof

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 1  (as specified in such rule) to which form or type such

 2  requirements may not be practically applied or to which form

 3  or type the application of such requirements is not desirable

 4  or necessary for the protection of the public. With respect to

 5  any health insurance policy form or type thereof which is

 6  exempted by rule from any requirement of paragraph (a),

 7  premium rates filed pursuant to ss. 627.640 and 627.662 shall

 8  be for informational purposes.

 9         (c)  Every filing made pursuant to this subsection

10  shall be made within the same time period provided in, and

11  shall be deemed to be approved under the same conditions as

12  those provided in, subsection (2).

13         (d)  Every filing made pursuant to this subsection,

14  except disability income policies and accidental death

15  policies, shall be prohibited from applying the following

16  rating practices:

17         1.  Select and ultimate premium schedules.

18         2.  Premium class definitions which classify insured

19  based on year of issue or duration since issue.

20         3.  Attained age premium structures on policy forms

21  under which more than 50 percent of the policies are issued to

22  persons age 65 or over.

23         (e)  Except as provided in subparagraph 1., an insurer

24  shall continue to make available for purchase any individual

25  policy form issued on or after October 1, 1993.  A policy form

26  shall not be considered to be available for purchase unless

27  the insurer has actively offered it for sale in the previous

28  12 months.

29         1.  An insurer may discontinue the availability of a

30  policy form if the insurer provides to the office department

31  in writing its decision at least 30 days prior to

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 1  discontinuing the availability of the form of the policy or

 2  certificate.  After receipt of the notice by the office

 3  department, the insurer shall no longer offer for sale the

 4  policy form or certificate form in this state.

 5         2.  An insurer that discontinues the availability of a

 6  policy form pursuant to subparagraph 1. shall not file for

 7  approval a new policy form providing similar benefits as the

 8  discontinued form for a period of 5 years after the insurer

 9  provides notice to the office department of the

10  discontinuance. The period of discontinuance may be reduced if

11  the office department determines that a shorter period is

12  appropriate.

13         3.  The experience of all policy forms providing

14  similar benefits shall be combined for all rating purposes.

15         (7)(a)  Each insurer subject to the requirements of

16  subsection (6) shall make an annual filing with the office

17  department no later than 12 months after its previous filing,

18  demonstrating the reasonableness of benefits in relation to

19  premium rates.  The office department, after receiving a

20  request to be exempted from the provisions of this section,

21  may, for good cause due to insignificant numbers of policies

22  in force or insignificant premium volume, exempt a company, by

23  line of coverage, from filing rates or rate certification as

24  required by this section.

25         (b)  The filing required by this subsection shall be

26  satisfied by one of the following methods:

27         1.  A rate filing prepared by an actuary which contains

28  documentation demonstrating the reasonableness of benefits in

29  relation to premiums charged in accordance with the applicable

30  rating laws and rules promulgated by the commission

31  department.

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 1         2.  If no rate change is proposed, a filing which

 2  consists of a certification by an actuary that benefits are

 3  reasonable in relation to premiums currently charged in

 4  accordance with applicable laws and rules promulgated by the

 5  commission department.

 6         (c)  As used in this section, "actuary" means an

 7  individual who is a member of the Society of Actuaries or the

 8  American Academy of Actuaries.  If an insurer does not employ

 9  or otherwise retain the services of an actuary, the insurer's

10  certification shall be prepared by insurer personnel or

11  consultants with a minimum of 5 years' experience in insurance

12  ratemaking. The chief executive officer of the insurer shall

13  review and sign the certification indicating his or her

14  agreement with its conclusions.

15         (d)  If at the time a filing is required under this

16  section an insurer is in the process of completing a rate

17  review, the insurer may apply to the office department for an

18  extension of up to an additional 30 days in which to make the

19  filing.  The request for extension must be received by the

20  office department in its offices in Tallahassee no later than

21  the date the filing is due.

22         (e)  If an insurer fails to meet the filing

23  requirements of this subsection and does not submit the filing

24  within 60 days following the date the filing is due, the

25  office department may, in addition to any other penalty

26  authorized by law, order the insurer to discontinue the

27  issuance of policies for which the required filing was not

28  made, until such time as the office department determines that

29  the required filing is properly submitted.

30         (8)(a)  For the purposes of subsections (6) and (7),

31  benefits of an individual accident and health insurance policy

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 1  form, including Medicare supplement policies as defined in s.

 2  627.672, when authorized by rules adopted by the commission

 3  department, and excluding long-term care insurance policies as

 4  defined in s. 627.9404, and other policy forms under which

 5  more than 50 percent of the policies are issued to individuals

 6  age 65 and over, are deemed to be reasonable in relation to

 7  premium rates if the rates are filed pursuant to a loss ratio

 8  guarantee and both the initial rates and the durational and

 9  lifetime loss ratios have been approved by the office

10  department, and such benefits shall continue to be deemed

11  reasonable for renewal rates while the insurer complies with

12  such guarantee, provided the currently expected lifetime loss

13  ratio is not more than 5 percent less than the filed lifetime

14  loss ratio as certified to by an actuary.  The office

15  department shall have the right to bring an administrative

16  action should it deem that the lifetime loss ratio will not be

17  met.  For Medicare supplement filings, the office department

18  may withdraw a previously approved filing which was made

19  pursuant to a loss ratio guarantee if it determines that the

20  filing is not in compliance with ss. 627.671-627.675 or the

21  currently expected lifetime loss ratio is less than the filed

22  lifetime loss ratio as certified by an actuary in the initial

23  guaranteed loss ratio filing.  If this section conflicts with

24  ss. 627.671-627.675, ss. 627.671-627.675 shall control.

25         (b)  The renewal premium rates shall be deemed to be

26  approved upon filing with the office department if the filing

27  is accompanied by the most current approved loss ratio

28  guarantee. The loss ratio guarantee shall be in writing, shall

29  be signed by an officer of the insurer, and shall contain at

30  least:

31  

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 1         1.  A recitation of the anticipated lifetime and

 2  durational target loss ratios contained in the actuarial

 3  memorandum filed with the policy form when it was originally

 4  approved.  The durational target loss ratios shall be

 5  calculated for 1-year experience periods.  If statutory

 6  changes have rendered any portion of such actuarial memorandum

 7  obsolete, the loss ratio guarantee shall also include an

 8  amendment to the actuarial memorandum reflecting current law

 9  and containing new lifetime and durational loss ratio targets.

10         2.  A guarantee that the applicable loss ratios for the

11  experience period in which the new rates will take effect, and

12  for each experience period thereafter until new rates are

13  filed, will meet the loss ratios referred to in subparagraph

14  1.

15         3.  A guarantee that the applicable loss ratio results

16  for the experience period will be independently audited at the

17  insurer's expense.  The audit shall be performed in the second

18  calendar quarter of the year following the end of the

19  experience period, and the audited results shall be reported

20  to the office department no later than the end of such

21  quarter.  The commission department shall establish by rule

22  the minimum information reasonably necessary to be included in

23  the report.  The audit shall be done in accordance with

24  accepted accounting and actuarial principles.

25         4.  A guarantee that affected policyholders in this

26  state shall be issued a proportional refund, based on the

27  premium earned, of the amount necessary to bring the

28  applicable experience period loss ratio up to the durational

29  target loss ratio referred to in subparagraph 1.  The refund

30  shall be made to all policyholders in this state who are

31  insured under the applicable policy form as of the last day of

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 1  the experience period, except that no refund need be made to a

 2  policyholder in an amount less than $10. Refunds less than $10

 3  shall be aggregated and paid pro rata to the policyholders

 4  receiving refunds.  The refund shall include interest at the

 5  then-current variable loan interest rate for life insurance

 6  policies established by the National Association of Insurance

 7  Commissioners, from the end of the experience period until the

 8  date of payment.  Payments shall be made during the third

 9  calendar quarter of the year following the experience period

10  for which a refund is determined to be due. However, no

11  refunds shall be made until 60 days after the filing of the

12  audit report in order that the office department has adequate

13  time to review the report.

14         5.  A guarantee that if the applicable loss ratio

15  exceeds the durational target loss ratio for that experience

16  period by more than 20 percent, provided there are at least

17  2,000 policyholders on the form nationwide or, if not, then

18  accumulated each calendar year until 2,000 policyholder years

19  is reached, the insurer, if directed by the office department,

20  shall withdraw the policy form for the purposes of issuing new

21  policies.

22         (c)  As used in this subsection:

23         1.  "Loss ratio" means the ratio of incurred claims to

24  earned premium.

25         2.  "Applicable loss ratio" means the loss ratio

26  attributable solely to this state if there are 2,000 or more

27  policyholders in the state. If there are 500 or more

28  policyholders in this state but less than 2,000, it is the

29  linear interpolation of the nationwide loss ratio and the loss

30  ratio for this state.  If there are less than 500

31  policyholders in this state, it is the nationwide loss ratio.

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 1         3.  "Experience period" means the period, ordinarily a

 2  calendar year, for which a loss ratio guarantee is calculated.

 3         Section 1113.  Section 627.4101, Florida Statutes, is

 4  amended to read:

 5         627.4101  Credit insurance enrollment forms.--Effective

 6  October 1, 2002, All credit insurance enrollment forms must be

 7  approved by the office Department of Insurance pursuant to the

 8  provisions of s. 627.410 or s. 627.682.

 9         Section 1114.  Section 627.4105, Florida Statutes, is

10  amended to read:

11         627.4105  Life and health insurance; reduced premiums

12  upon rigorous physical examination.--Upon request, the office

13  department may approve special life and health insurance

14  policy forms providing for reduced premiums for each applicant

15  passing a rigorous physical examination.

16         Section 1115.  Section 627.411, Florida Statutes, is

17  amended to read:

18         627.411  Grounds for disapproval.--

19         (1)  The office department shall disapprove any form

20  filed under s. 627.410, or withdraw any previous approval

21  thereof, only if the form:

22         (a)  Is in any respect in violation of, or does not

23  comply with, this code.

24         (b)  Contains or incorporates by reference, where such

25  incorporation is otherwise permissible, any inconsistent,

26  ambiguous, or misleading clauses, or exceptions and conditions

27  which deceptively affect the risk purported to be assumed in

28  the general coverage of the contract.

29         (c)  Has any title, heading, or other indication of its

30  provisions which is misleading.

31  

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 1         (d)  Is printed or otherwise reproduced in such manner

 2  as to render any material provision of the form substantially

 3  illegible.

 4         (e)  Is for health insurance, and provides benefits

 5  which are unreasonable in relation to the premium charged,

 6  contains provisions which are unfair or inequitable or

 7  contrary to the public policy of this state or which encourage

 8  misrepresentation, or which apply rating practices which

 9  result in premium escalations that are not viable for the

10  policyholder market or result in unfair discrimination in

11  sales practices.

12         (f)  Excludes coverage for human immunodeficiency virus

13  infection or acquired immune deficiency syndrome or contains

14  limitations in the benefits payable, or in the terms or

15  conditions of such contract, for human immunodeficiency virus

16  infection or acquired immune deficiency syndrome which are

17  different than those which apply to any other sickness or

18  medical condition.

19         (2)  In determining whether the benefits are reasonable

20  in relation to the premium charged, the office department, in

21  accordance with reasonable actuarial techniques, shall

22  consider:

23         (a)  Past loss experience and prospective loss

24  experience within and without this state.

25         (b)  Allocation of expenses.

26         (c)  Risk and contingency margins, along with

27  justification of such margins.

28         (d)  Acquisition costs.

29         Section 1116.  Section 627.412, Florida Statutes, is

30  amended to read:

31         627.412  Standard provisions, in general.--

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 1         (1)  Insurance contracts shall contain such standard or

 2  uniform provisions as are required by the applicable

 3  provisions of this code pertaining to contracts of particular

 4  kinds of insurance.  The office department may waive the

 5  required use of a particular provision in a particular

 6  insurance policy form if:

 7         (a)  It finds such provision unnecessary for the

 8  protection of the insured and inconsistent with the purposes

 9  of the policy; and

10         (b)  The policy is otherwise approved by it.

11         (2)  No policy shall contain any provision inconsistent

12  with or contradictory to any standard or uniform provision

13  used or required to be used, but the office department may

14  approve any substitute provision which is, in its opinion, not

15  less favorable in any particular to the insured or beneficiary

16  than the provisions otherwise required.

17         (3)  In lieu of the provisions required by this code

18  for contracts for particular kinds of insurance, substantially

19  similar provisions required by the law of the domicile of a

20  foreign or alien insurer may be used when approved by the

21  office department.

22         Section 1117.  Paragraph (g) of subsection (1) and

23  subsections (4) and (5) of section 627.413, Florida Statutes,

24  are amended to read:

25         627.413  Contents of policies, in general;

26  identification.--

27         (1)  Every policy shall specify:

28         (g)  The form numbers and edition dates or numeric code

29  indicating edition dates, when such code has been supplied to

30  the office department, of all endorsements attached to a

31  policy.  This requirement applies to life insurance policies

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 1  and health insurance policies only at the time of original

 2  issue.

 3         (4)  All policies and annuity contracts issued by

 4  insurers, and the forms thereof filed with the office

 5  department, shall have printed thereon an appropriate

 6  designating letter or figure, or combination of letters or

 7  figures or terms identifying the respective forms of policies

 8  or contracts.  Whenever any change is made in any such form,

 9  the designating letters, figures, or terms thereon shall be

10  correspondingly changed.

11         (5)  Any policy that is a minimum premium policy issued

12  by an insurer pursuant to the minimum premium provisions of

13  rules adopted by rating organizations licensed by the office

14  Department of Insurance, shall have typed, printed, stamped,

15  or legibly handwritten on the certificate the words "minimum

16  premium policy" or equivalent language.  The office department

17  may impose an administrative fine pursuant to s. 624.4211 if

18  the office department finds any violation of this subsection.

19         Section 1118.  Subsections (1), (2), and (3) and

20  paragraph (f) of subsection (5) of section 627.4145, Florida

21  Statutes, are amended to read:

22         627.4145  Readable language in insurance policies.--

23         (1)  Every policy shall be readable as required by this

24  section.  For the purposes of this section, the term "policy"

25  means a policy form or endorsement.  A policy is deemed

26  readable if:

27         (a)  The text achieves a minimum score of 45 on the

28  Flesch reading ease test as computed in subsection (5) or an

29  equivalent score on any other test comparable in result and

30  approved by the office department;

31  

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 1         (b)  It uses layout and spacing which separate the

 2  paragraphs from each other and from the border of the paper;

 3         (c)  It has section titles that are captioned in

 4  boldfaced type or that otherwise stand out significantly from

 5  the text;

 6         (d)  It avoids the use of unnecessarily long,

 7  complicated, or obscure words, sentences, paragraphs, or

 8  constructions;

 9         (e)  The style, arrangement, and overall appearance of

10  the policy give no undue prominence to any portion of the text

11  of the policy or to any endorsements or riders; and

12         (f)  It contains a table of contents or an index of the

13  principal sections of the policy, if the policy has more than

14  3,000 words or more than three pages.

15         (2)  The office department may authorize a lower score

16  than the Flesch reading ease test score required in subsection

17  (1) whenever it finds that a lower score will provide a more

18  accurate reflection of the readability of a policy form, is

19  warranted by the nature of a particular policy form or type or

20  class of policy forms, or is the result of language which is

21  used to conform to the requirements of any law.

22         (3)  A filing subject to this section shall be

23  accompanied by a certification signed by an officer of the

24  insurer stating that the policy meets the requirements of

25  subsection (1). Such certification shall state that the policy

26  meets the minimum reading ease test score on the test used or

27  that the score is lower than the minimum required but should

28  be approved in accordance with subsection (2).  The office

29  department may require the submission of further information

30  to verify any certification.

31  

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 1         (5)  A Flesch reading ease test score shall be measured

 2  by the following method:

 3         (f)  The term "text" as used in this subsection

 4  includes all printed matter except:

 5         1.  The name and address of the insurer; the name,

 6  number, or title of the policy; the table of contents or

 7  index; captions and subcaptions; specification pages;

 8  schedules; or tables;

 9         2.  Policy language required by any collectively

10  bargained agreement;

11         3.  Any medical terminology;

12         4.  Words which are defined in the policy; and

13         5.  Any policy language required by law, if the insurer

14  identifies the language or terminology excepted by this

15  paragraph and certifies to the office department, in writing,

16  that the language or terminology is entitled to be excepted

17  under this paragraph.

18         Section 1119.  Subsection (2) of section 627.417,

19  Florida Statutes, is amended to read:

20         627.417  Underwriters' and combination policies.--

21         (2)  Two or more authorized insurers may, with the

22  approval of the office department, issue a combination policy

23  which shall contain provisions substantially as follows:

24         (a)  That the insurers executing the policy shall be

25  severally liable for the full amount of any loss or damage,

26  according to the terms of the policy, or for specified

27  percentages or amounts thereof, aggregating the full amount of

28  insurance under the policy; and

29         (b)  That service of process, or of any notice or proof

30  of loss required by such policy, upon any of the insurers

31  

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 1  executing the policy, shall constitute service upon all such

 2  insurers.

 3         Section 1120.  Subsection (2) of section 627.418,

 4  Florida Statutes, is amended to read:

 5         627.418  Validity of noncomplying contracts.--

 6         (2)  Any insurance contract delivered or issued for

 7  delivery in this state covering a subject or subjects of

 8  insurance resident, located, or to be performed in this state,

 9  which subjects, pursuant to the provisions of this code, the

10  insurer may not lawfully insure under such a contract, shall

11  be cancelable at any time by the insurer, any provision of the

12  contract to the contrary notwithstanding; and the insurer

13  shall promptly cancel the contract in accordance with the

14  request of the office department therefor.  No such illegality

15  or cancellation shall be deemed to relieve the insurer of any

16  liability incurred by it under the contract while in force, or

17  to prohibit the insurer from retaining the pro rata earned

18  premium thereon.  This provision does not relieve the insurer

19  from any penalty otherwise incurred by the insurer under this

20  code on account of any such violation.

21         Section 1121.  Subsection (7) of section 627.4234,

22  Florida Statutes, is amended to read:

23         627.4234  Health insurance cost containment provisions

24  required.--A health insurance policy or health care services

25  plan which provides medical, hospital, or surgical expense

26  coverage delivered or issued for delivery in this state must

27  contain one or more of the following procedures or provisions

28  to contain health insurance costs or cost increases:

29         (7)  Any lawful measure or combination of measures for

30  which the insurer provides to the office department

31  information demonstrating that the measure or combination of

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 1  measures is reasonably expected to have an effect toward

 2  containing health insurance costs or cost increases.

 3         Section 1122.  Paragraph (a) of subsection (3) of

 4  section 627.4236, Florida Statutes, is amended to read:

 5         627.4236  Coverage for bone marrow transplant

 6  procedures.--

 7         (3)(a)  The Agency for Health Care Administration shall

 8  adopt rules specifying the bone marrow transplant procedures

 9  that are accepted within the appropriate oncological specialty

10  and are not experimental for purposes of this section. The

11  rules must be based upon recommendations of an advisory panel

12  appointed by the secretary of the agency, composed of:

13         1.  One adult oncologist, selected from a list of three

14  names recommended by the Florida Medical Association;

15         2.  One pediatric oncologist, selected from a list of

16  three names recommended by the Florida Pediatric Society;

17         3.  One representative of the J. Hillis Miller Health

18  Center at the University of Florida;

19         4.  One representative of the H. Lee Moffitt Cancer

20  Center and Research Institute, Inc.;

21         5.  One consumer representative, selected from a list

22  of three names recommended by the Chief Financial Officer

23  Insurance Commissioner;

24         6.  One representative of the Health Insurance

25  Association of America;

26         7.  Two representatives of health insurers, one of whom

27  represents the insurer with the largest Florida health

28  insurance premium volume and one of whom represents the

29  insurer with the second largest Florida health insurance

30  premium volume; and

31  

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 1         8.  One representative of the insurer with the largest

 2  Florida small group health insurance premium volume.

 3         Section 1123.  Section 627.4238, Florida Statutes, is

 4  amended to read:

 5         627.4238  Health insurer examinations.--The office

 6  department may examine each authorized health insurer which

 7  transacts health insurance in this state.  The purpose of the

 8  examination is to ascertain compliance by the insurer with the

 9  applicable provisions of this chapter.  In lieu of the

10  examination, the office department may accept the report of a

11  similar examination made by the insurance supervisory official

12  of this state or another state.  The reasonable cost of the

13  examination shall be paid by the person examined, and such

14  person is subject to the provisions of s. 624.320.  Any

15  examination is also subject to the applicable provisions of

16  ss. 624.318, 624.319, 624.321, and 624.322.  An examination

17  under this section may not exceed 10 working days in length,

18  may not be conducted more often than annually, and may not be

19  conducted during the same calendar year as a market conduct

20  examination conducted by the office department, except in a

21  case in which the office department has prima facie evidence

22  of a violation of this chapter or of chapter 626, which

23  violation is of a nature so as to provide an immediate danger

24  to the insurance-consuming public.

25         Section 1124.  Subsection (2) of section 627.427,

26  Florida Statutes, is amended to read:

27         627.427  Payment of judgment by insurer; penalty for

28  failure.--

29         (2)  If the judgment or decree is not satisfied as

30  required under subsection (1), and proof of such failure to

31  satisfy is made by filing with the office department a

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 1  certified transcript of the docket of the judgment or decree

 2  together with a certificate by the clerk of the court wherein

 3  the judgment or decree was entered that the judgment or decree

 4  remains unsatisfied, in whole or in part, after the time

 5  aforesaid, the office department shall forthwith revoke the

 6  insurer's certificate of authority.  The office department

 7  shall not issue to such insurer any new certificate of

 8  authority until the judgment or decree is wholly paid and

 9  satisfied and proof thereof filed with the office department

10  under the official certificate of the clerk of the court

11  wherein the judgment was recovered, showing that the same is

12  satisfied of record, and until the expenses and fees incurred

13  in the case are also paid by the insurer.

14         Section 1125.  Paragraph (b) of subsection (4) of

15  section 627.429, Florida Statutes, is amended to read:

16         627.429  Medical tests for HIV infection and AIDS for

17  insurance purposes.--

18         (4)  USE OF MEDICAL TESTS FOR UNDERWRITING.--

19         (b)  Prior to testing, the insurer shall disclose its

20  intent to test the person for the HIV infection or for a

21  specific sickness or medical condition derived therefrom and

22  shall obtain the person's written informed consent to

23  administer the test.  The written informed consent required by

24  this paragraph shall include a fair explanation of the test,

25  including its purpose, potential uses, and limitations, and

26  the meaning of its results and the right to confidential

27  treatment of information.  Use of a form approved by the

28  office department raises a conclusive presumption of informed

29  consent.

30         Section 1126.  Subsection (1) of section 627.452,

31  Florida Statutes, is amended to read:

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 1         627.452  Standard provisions required.--

 2         (1)  No policy of life insurance, except as stated in

 3  subsection (3), shall be delivered or issued for delivery in

 4  this state unless it contains in substance each of the

 5  provisions as required by ss. 627.453-627.462 inclusive and

 6  ss. 627.475 and 627.476, or provisions which in the opinion of

 7  the office department are more favorable to the policyholder.

 8         Section 1127.  Subsection (1) of section 627.458,

 9  Florida Statutes, is amended to read:

10         627.458  Policy loan.--

11         (1)  There shall be a provision that after the policy

12  has a cash surrender value and while no premium is in default,

13  the insurer will advance, on proper assignment or pledge of

14  the policy and on the sole security thereof, at a rate of

15  interest not exceeding 10 percent per year, for policies

16  issued prior to October 1, 1981, payable in advance, an amount

17  equal to or, at the option of the party entitled thereto, less

18  than the loan value of the policy. The loan value of the

19  policy shall be at least equal to the cash surrender value at

20  the end of the then-current policy year, except that the

21  insurer may deduct, either from such loan value or from the

22  proceeds of the loan, any existing indebtedness not already

23  deducted in determining such cash surrender value, including

24  any interest then accrued but not due, any unpaid balance of

25  the premium for the current policy year, and interest on the

26  loan to the end of the current policy year.  However, as a

27  condition for approval of a policy loan interest rate in

28  excess of 6 percent per year, the office department shall

29  require the insurer to furnish such assurances as the office

30  department deems necessary that the interest rate on such

31  loans will bear a reasonable relationship to other interest

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 1  rates and that the holders of such policies will benefit

 2  through higher dividends or lower premiums, or both.

 3         Section 1128.  Section 627.462, Florida Statutes, is

 4  amended to read:

 5         627.462  Table of installments.--If a policy provides

 6  for payment of its proceeds in installments, a table showing

 7  the amount and period of such installments shall be included

 8  in the policy; except that certain tables may be omitted from

 9  the policy if in the judgment of the office department it is

10  not practical to include them.

11         Section 1129.  Subsection (1) of section 627.464,

12  Florida Statutes, is amended to read:

13         627.464  Annuity contracts, pure endowment contracts;

14  standard provisions.--

15         (1)  No fixed-dollar annuity, variable annuity, or pure

16  endowment contract, other than a reversionary annuity,

17  survivorship annuity, or group annuity, shall be delivered or

18  issued for delivery in this state unless it contains in

19  substance each of the provisions set forth in ss.

20  627.465-627.470, inclusive, or provisions which in the opinion

21  of the office department are more favorable to the

22  policyholder.  Any of such provisions not applicable to

23  single-premium annuities or single-premium pure endowment

24  contracts shall not to that extent be incorporated therein.

25         Section 1130.  Subsections (2) and (8), paragraphs (h)

26  and (k) of subsection (9), and subsections (10) and (14) of

27  section 627.476, Florida Statutes, are amended to read:

28         627.476  Standard Nonforfeiture Law for Life

29  Insurance.--

30         (2)  NONFORFEITURE PROVISIONS.--In the case of policies

31  issued on or after the operative date of this section as

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 1  defined in subsection (14), no policy of life insurance,

 2  except as set forth in subsection (13), shall be delivered or

 3  issued for delivery in this state unless it contains in

 4  substance the following provisions, or corresponding

 5  provisions which in the opinion of the office department are

 6  at least as favorable to the defaulting or surrendering

 7  policyholder as are the minimum requirements hereinafter

 8  specified and are essentially in compliance with subsection

 9  (12):

10         (a)  That in the event of default in any premium

11  payment, after premiums have been paid for at least 1 full

12  year in the case of ordinary insurance or 3 full years in the

13  case of industrial insurance, the insurer will grant, upon

14  proper request not later than 60 days after the due date of

15  the premium in default, a paid-up nonforfeiture benefit on a

16  plan stipulated in the policy, effective as of such due date,

17  of such amount as may be hereinafter specified.  In lieu of

18  such stipulated paid-up nonforfeiture benefit, the company may

19  substitute, upon proper request not later than 60 days after

20  the due date of the premium in default, an actuarially

21  equivalent alternative paid-up nonforfeiture benefit which

22  provides a greater amount or longer period of death benefits

23  or, if applicable, a greater amount or earlier payment of

24  endowment benefits.  With respect to all policy forms filed on

25  or after October 1, 1990, the policy forms shall include, but

26  not be limited to, a reduced paid-up nonforfeiture benefit.

27  For the purposes of this subsection, the term "reduced paid-up

28  nonforfeiture benefit" means a benefit whereby the policy may

29  be continued at the option of the insured as reduced paid-up

30  life insurance, the amount of which shall be as much as the

31  surrender value of the policy will provide on the date of

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 1  default, calculated using the surrender value of the policy as

 2  a net single premium on the due date of the first unpaid

 3  premium at the then-current age of the insured.

 4         (b)  That upon surrender of the policy within 60 days

 5  after the due date of any premium payment in default after

 6  premiums have been paid for at least 3 full years in the case

 7  of ordinary insurance or 5 full years in the case of

 8  industrial insurance, the insurer will pay, in lieu of any

 9  paid-up nonforfeiture benefit, a cash surrender value of such

10  amount as may be hereinafter specified.

11         (c)  That a specified paid-up nonforfeiture benefit

12  shall become effective as specified in the policy unless the

13  person entitled to make such election elects another available

14  option not later than 60 days after the due date of the

15  premium in default.

16         (d)  That if the policy becomes paid up by completion

17  of all premium payments, or if it is continued under any

18  paid-up nonforfeiture benefit which became effective on or

19  after the third policy anniversary in the case of ordinary

20  insurance or the fifth policy anniversary in the case of

21  industrial insurance, the insurer will pay, upon surrender of

22  the policy within 30 days after any policy anniversary, a cash

23  surrender value of such amount as may be hereinafter

24  specified.

25         (e)  In the case of a policy which causes on a basis

26  guaranteed in the policy unscheduled changes in benefits or

27  premiums, or which provides an option for changes in benefits

28  or premiums other than a change to a new policy, a statement

29  of the mortality table, interest rate, and method used in

30  calculating cash surrender values and the paid-up

31  nonforfeiture benefits available under the policy.  In the

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 1  case of any other policy, a statement of the mortality table

 2  and interest rate used in calculating the cash surrender

 3  values and the paid-up nonforfeiture benefits available under

 4  the policy, together with a table showing the cash surrender

 5  value, if any, and paid-up nonforfeiture benefit, if any,

 6  available under the policy on each policy anniversary, either

 7  during the first 20 policy years or during the term of the

 8  policy, whichever is shorter, such values and benefits to be

 9  calculated upon the assumption that there are no dividends or

10  paid-up additions credited to the policy and that there is no

11  indebtedness to the insurer on the policy.

12         (f)  A statement that the cash surrender values and the

13  paid-up nonforfeiture benefits available under the policy are

14  not less than the minimum values and benefits required by or

15  pursuant to the insurance law of this state; an explanation of

16  the manner in which the cash surrender values and the paid-up

17  nonforfeiture benefits are altered by the existence of any

18  paid-up additions credited to the policy or any indebtedness

19  to the insurer on the policy; if a detailed statement of the

20  method of computation of the values and benefits shown in the

21  policy is not stated therein, a statement that such method of

22  computation has been filed with the insurance supervisory

23  official of the state in which the policy is delivered; and a

24  statement of the method to be used in calculating the cash

25  surrender value and paid-up nonforfeiture benefit available

26  under the policy on any policy anniversary beyond the last

27  anniversary for which such values and benefits are

28  consecutively shown in the policy.

29         (8)  MORTALITY TABLES; INTEREST.--This subsection shall

30  not apply to policies issued on or after the operative date of

31  subsection (9), as defined therein.  All adjusted premiums and

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 1  present values referred to in this section shall for all

 2  policies of ordinary insurance be calculated on the basis of

 3  the Commissioners' 1958 Standard Ordinary Mortality Table,

 4  except that, for any category of such policies issued on

 5  female risks, adjusted premiums and present values may be

 6  calculated according to an age not more than 6 years younger

 7  than the actual age of the insured. Such calculations for all

 8  policies of industrial insurance shall be made on the basis of

 9  the following tables:

10         (a)  For policies issued on and after the operative

11  date of this section but before January 1, 1968, the 1941

12  Standard Industrial Mortality Table, unless the Commissioners'

13  1961 Standard Industrial Mortality Table is applicable

14  according to subsection (14);

15         (b)  For policies issued on and after January 1, 1968,

16  the Commissioners' 1961 Standard Industrial Mortality Table.

17  

18  All calculations shall be made on the basis of the rate of

19  interest specified in the policy for calculating cash

20  surrender values and paid-up nonforfeiture benefits; however,

21  such rate of interest shall not exceed 3.5 percent per year,

22  except that a rate of interest not exceeding 4 percent per

23  year may be used for policies issued on or after July 1, 1973,

24  and prior to October 1, 1979, and a rate of interest not

25  exceeding 4.5 percent per year may be used for policies issued

26  on or after October 1, 1979, and a rate of interest not

27  exceeding 5.5 percent per year may be used for policies issued

28  on or after October 1, 1980.  In calculating the present value

29  of any paid-up term insurance with accompanying pure

30  endowment, if any, offered as a nonforfeiture benefit, the

31  rates of mortality assumed may be not more than those shown in

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 1  the Commissioners' 1958 Extended Term Insurance Table, for

 2  ordinary policies.  In the case of industrial policies:

 3         (c)  For policies issued on and after the operative

 4  date of this section but before January 1, 1968, not more than

 5  130 percent of the rates of mortality according to the 1941

 6  Standard Industrial Mortality Table, unless the Commissioners'

 7  1961 Industrial Extended Term Insurance Table is applicable

 8  according to subsection (14), in which case not more than

 9  those of the latter table;

10         (d)  For policies issued on and after January 1, 1968,

11  not more than those of the Commissioners' 1961 Industrial

12  Extended Term Insurance Table.

13  

14  For insurance issued on a substandard basis, the calculation

15  of any such adjusted premiums and present values may be based

16  on such other table of mortality as may be specified by the

17  insurer and approved by the office department.

18         (9)  CALCULATION OF ADJUSTED PREMIUMS AND PRESENT

19  VALUES FOR POLICIES ISSUED AFTER OPERATIVE DATE OF THIS

20  SUBSECTION.--

21         (h)  All adjusted premiums and present values referred

22  to in this section shall for all policies of ordinary

23  insurance be calculated on the basis of the Commissioners'

24  1980 Standard Ordinary Mortality Table or, at the election of

25  the insurer for any one or more specified plans of life

26  insurance, the Commissioners' 1980 Standard Ordinary Mortality

27  Table with Ten-Year Select Mortality Factors; shall for all

28  policies of industrial insurance be calculated on the basis of

29  the Commissioners' 1961 Standard Industrial Mortality Table;

30  and shall for all policies issued in a particular calendar

31  year be calculated on the basis of a rate of interest not

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 1  exceeding the nonforfeiture interest rate as defined in this

 2  subsection for policies issued in that calendar year. However:

 3         1.  At the option of the insurer, calculations for all

 4  policies issued in a particular calendar year may be made on

 5  the basis of a rate of interest not exceeding the

 6  nonforfeiture interest rate, as defined in this subsection,

 7  for policies issued in the immediately preceding calendar

 8  year.

 9         2.  Under any paid-up nonforfeiture benefit, including

10  any paid-up dividend additions, any cash surrender value

11  available, whether or not required by subsection (2), shall be

12  calculated on the basis of the mortality table and rate of

13  interest used in determining the amount of such paid-up

14  nonforfeiture benefit and paid-up dividend additions, if any.

15         3.  An insurer may calculate the amount of any

16  guaranteed paid-up nonforfeiture benefit, including any

17  paid-up additions under the policy, on the basis of an

18  interest rate no lower than that specified in the policy for

19  calculating cash surrender values.

20         4.  In calculating the present value of any paid-up

21  term insurance with accompanying pure endowment, if any,

22  offered as a nonforfeiture benefit, the rates of mortality

23  assumed may be not more than those shown in the Commissioners'

24  1980 Extended Term Insurance Table for policies of ordinary

25  insurance and not more than the Commissioners' 1961 Industrial

26  Extended Term Insurance Table for policies of industrial

27  insurance.

28         5.  In lieu of the mortality tables specified in this

29  section, at the option of the insurance company and subject to

30  rules adopted by the commission department, the insurance

31  company may substitute:

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 1         a.  The 1958 CSO or CET Smoker and Nonsmoker Mortality

 2  Tables, whichever is applicable, for policies issued on or

 3  after the operative date of this subsection and before January

 4  1, 1989;

 5         b.  The 1980 CSO or CET Smoker and Nonsmoker Mortality

 6  Tables, whichever is applicable, for policies issued on or

 7  after the operative date of this subsection;

 8         c.  A mortality table that is a blend of the

 9  sex-distinct 1980 CSO or CET mortality table standard,

10  whichever is applicable, or a mortality table that is a blend

11  of the sex-distinct 1980 CSO or CET smoker and nonsmoker

12  mortality table standards, whichever is applicable, for

13  policies that are subject to the United States Supreme Court

14  decision in Arizona Governing Committee v. Norris to prevent

15  unfair discrimination in employment situations.

16         6.  For insurance issued on a substandard basis, the

17  calculation of any such adjusted premiums and present values

18  may be based on appropriate modifications of the

19  aforementioned tables.

20         (k)  After October 1, 1981, any insurer may file with

21  the office department a written notice of its election to

22  comply with the provisions of this subsection after a

23  specified date before January 1, 1989, which shall be the

24  operative date of this subsection for that insurer.  If an

25  insurer makes no such election, the operative date of this

26  subsection for the insurer shall be January 1, 1989.

27         (10)  INDETERMINATE PREMIUMS OR MINIMUM VALUES.--In the

28  case of any plan of life insurance which provides for future

29  premium determination, the amounts of which are to be

30  determined by the insurer based on then estimates of future

31  experience, or in the case of any plan of life insurance which

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 1  is of such a nature that minimum values cannot be determined

 2  by the methods described in subsections (2)-(9):

 3         (a)  The office department must be satisfied that the

 4  benefits provided under the plan are substantially as

 5  favorable to policyholders and insureds as the minimum

 6  benefits otherwise required by subsections (2)-(9);

 7         (b)  The office department must be satisfied that the

 8  benefits and the pattern of premiums of that plan are not such

 9  as to mislead prospective policyholders or insureds; and

10         (c)  The cash surrender values and paid-up

11  nonforfeiture benefits provided by such plan must not be less

12  than the minimum values and benefits required for the plan

13  computed by a method consistent with the principles of this

14  Standard Nonforfeiture Law for Life Insurance, as determined

15  by rules promulgated by the commission department.

16         (14)  OPERATIVE DATE.--After the effective date of this

17  code, any insurer may file with the office department a

18  written notice or notices of its election to comply with the

19  provisions of this section on and after a specified date or

20  dates before January 1, 1966, as to either or both of its

21  policies of ordinary and industrial insurance, in which case

22  such specified date or dates shall be the operative date of

23  this section with respect to such policies.  The operative

24  date of this section for policies of both ordinary and

25  industrial insurance shall be the earlier of January 1, 1966,

26  and any prior operative date or dates resulting from such

27  previously filed written notices.  With respect to policies of

28  industrial insurance issued on and after the operative date of

29  this section for such policies but before January 1, 1968, any

30  insurer may file with the office department written notice of

31  its election to have the Commissioners' 1961 Standard

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 1  Industrial Mortality Table and the Commissioners' 1961

 2  Industrial Extended Term Insurance Table applicable with

 3  respect to subsection (8) for policies issued on and after the

 4  date specified in such election.

 5         Section 1131.  Subsections (2) and (3) of section

 6  627.479, Florida Statutes, are amended to read:

 7         627.479  Prohibited policy plans.--

 8         (2)  No insurer shall issue policies containing annual

 9  endowments or other specialty-type policies such as founder's

10  policies or coupon-bearing policies.  The commission

11  department shall, by rule, define such prohibited policies.

12         (3)  The office department shall revoke the certificate

13  of authority of any insurer which violates this section.

14         Section 1132.  Section 627.480, Florida Statutes, is

15  amended to read:

16         627.480  Cash payments of single-premium life

17  policies.--Premiums for single-premium life insurance policies

18  shall be paid in cash.  This section is not applicable to the

19  use of dividends to purchase paid-up additional insurance or

20  to such other usual and customary methods of paying for life

21  insurance as may be permitted by rule of the commission

22  department.

23         Section 1133.  Paragraph (a) of subsection (2) and

24  subsections (4), (6), and (11) of section 627.481, Florida

25  Statutes, are amended to read:

26         627.481  Requirements for certain annuity agreements.--

27         (2)(a)  Every such domestic corporation or such

28  domestic or foreign trust shall have and maintain admitted

29  assets at least equal to the sum of the reserves on its

30  outstanding annuity agreements, and a surplus of 10 percent of

31  such reserves, calculated using:

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 1         1.a.  The present value of future guaranteed benefits

 2  for individual annuities that have either commenced paying

 3  benefits or have fixed a future date of the first benefit

 4  payment.

 5         b.  The commissioner's annuity reserve method, as set

 6  forth in s. 625.121(7)(c), for individual deferred annuities

 7  that have not fixed a date for the first benefit payment.

 8         2.  The mortality tables used to value individual

 9  annuities, as defined in s. 625.121(5).

10         a.  For annuities issued prior to July 1, 1998:

11         (I)  The mortality tables described in s.

12  625.121(5)(h), for individual annuities;

13         (II)  At the option of the corporation or trust, the

14  1983 Individual Annuity Mortality Table; or

15         (III)  At the option of the corporation or trust, the

16  2000 Individual Annuity Mortality Table for annuities issued

17  between January 1, 1998, and June 30, 1998, inclusive.

18         b.  For annuities issued on or after July 1, 1998:

19         (I)  The mortality tables set forth in s.

20  625.121(5)(i)3.;

21         (II)  Any other mortality tables required to be used by

22  insurers in accordance with s. 625.121; or

23         (III)  At the option of the corporation or trust, any

24  other mortality tables authorized to be used by insurers in

25  accordance with s. 625.121.

26         3.  An interest rate not greater than the maximum

27  interest rate permitted for the valuation of individual

28  annuities issued during the same calendar year as the

29  charitable gift annuity for individual annuities as set forth

30  in s. 625.121(6)(b)-(f).

31  

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 1         a.  The maximum statutory valuation interest rates for

 2  single-premium immediate annuities for 1992 may be used for

 3  annuities issued in 1992 or any prior year. The maximum

 4  statutory valuation interest rates for single-premium

 5  immediate annuities issued in 1992 through 2001 are as

 6  follows:

 7  

 8  Year of Issue              Single Premium Immediate

 9                              Annuity Interest Rate

10                     

11       1992                        7.75 percent

12       1993                        7.00 percent

13       1994                        6.50 percent

14       1995                        7.25 percent

15       1996                        6.75 percent

16       1997                        6.75 percent

17       1998                        6.25 percent

18       1999                        6.25 percent

19       2000                        7.00 percent

20       2001                        6.75 percent

21  

22         b.  For 2002 and subsequent years, until an interest

23  rate for a specified year can be determined in accordance with

24  s. 625.121(6), the prior year's rate shall be used unless the

25  office department requires use of a lower rate.

26         (4)  Any corporation or trust that engages in the

27  business of issuing these annuity agreements shall notify the

28  office department in writing by the later of 90 days after the

29  effective date of this act or the date on which it enters into

30  the first of these annuity agreements. The notice must:

31  

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 1         (a)  Be signed by two or more officers or directors of

 2  the organization;

 3         (b)  Identify the organization; and

 4         (c)  Certify that the organization meets the

 5  requirements of this section.

 6         (6)  If the office department finds that any such

 7  corporation or trust has failed to comply with the

 8  requirements of this section, it may order such corporation or

 9  trust to cease making any new annuity agreements until such

10  requirements have been satisfied.  The office department may,

11  in its discretion, require annual statements by such

12  corporation or trust and may accept in lieu thereof a sworn

13  statement by two or more of the principal officers thereof, in

14  such form as will satisfy the office department that the

15  requirements of this section are being complied with.

16         (11)  The commission department shall adopt rules and

17  forms for the filing of annual statements and agreements

18  pertaining to donor annuity organizations.

19         Section 1134.  Subsection (2) of section 627.482,

20  Florida Statutes, is amended to read:

21         627.482  Interest payable on cash surrender of

22  policy.--

23         (2)  An insurer shall be exempt from the requirements

24  of this section if, upon petition by the insurer to the office

25  department, it is determined by the office department that

26  payment of such interest threatens the solvency of the

27  insurer.

28         Section 1135.  Subsection (2) of section 627.502,

29  Florida Statutes, is amended to read:

30         627.502  "Industrial life insurance" defined;

31  reporting.--

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 1         (2)  Every life insurer transacting industrial life

 2  insurance shall report to the office department all annual

 3  statement data regarding the exhibit of life insurance,

 4  including relevant information for industrial life insurance.

 5         Section 1136.  Subsection (1) of section 627.503,

 6  Florida Statutes, is amended to read:

 7         627.503  Required provisions.--

 8         (1)  No policy of industrial life insurance shall be

 9  delivered or issued for delivery in this state unless it

10  contains in substance each of the provisions as required in s.

11  627.476 and ss. 627.504-627.521, or provisions which in the

12  opinion of the office department are more favorable to the

13  policyholder.

14         Section 1137.  Subsection (2) of section 627.510,

15  Florida Statutes, is amended to read:

16         627.510  Settlement on proof of death.--

17         (2)  Insurers transacting industrial life insurance

18  business in the state who require a claim form to be filed by

19  a claimant for settlement of a policy shall allow the claimant

20  to file the claim using the uniform life insurance claim form

21  developed by the commission department.  The commission

22  department shall establish by rule a uniform life insurance

23  claim form to be used by claimants for settlement of any

24  industrial life insurance policy issued by an insurer

25  transacting life insurance business in this state.

26         Section 1138.  Subsections (4) and (5) of section

27  627.5515, Florida Statutes, are amended to read:

28         627.5515  Out-of-state groups.--

29         (4)  Prior to solicitation in this state, a copy of the

30  master policy and a copy of the form of the certificate

31  evidencing coverage that will be issued to residents of this

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 1  state shall be filed with the office department for

 2  informational purposes.

 3         (5)  Prior to solicitation in this state, an officer of

 4  the insurer shall truthfully certify to the office department

 5  that the policy and certificates evidencing coverage have been

 6  reviewed and approved by the state in which the group policy

 7  is issued.

 8         Section 1139.  Subsection (2) of section 627.5565,

 9  Florida Statutes, is amended to read:

10         627.5565  Additional groups.--

11         (2)  An insurer shall inform the office department of

12  the effectuation of any coverage under this section within 30

13  days after effectuation of coverage. The insurer is

14  responsible for establishing that the criteria of subsection

15  (1) have been satisfied.

16         Section 1140.  Section 627.558, Florida Statutes, is

17  amended to read:

18         627.558  Provisions required in group contracts.--No

19  policy of group life insurance shall be delivered in this

20  state unless it contains in substance the provisions set forth

21  in ss. 627.559-627.568 or provisions which in the opinion of

22  the office department are more favorable to the persons

23  insured, or at least as favorable to the persons insured and

24  more favorable to the policyholder; except that:

25         (1)  Sections 627.564-627.568 inclusive do not apply to

26  policies issued to a creditor to insure debtors of such

27  creditor;

28         (2)  The standard provisions required for individual

29  life insurance policies do not apply to group life insurance

30  policies; and

31  

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 1         (3)  If the group life insurance policy is on a plan of

 2  insurance other than the term plan, it shall contain a

 3  nonforfeiture provision or provisions which in the opinion of

 4  the office department is or are equitable to the insured

 5  persons and to the policyholder, but nothing in this section

 6  shall be construed to require that group life insurance

 7  policies contain the same nonforfeiture provisions as are

 8  required for individual life insurance policies.

 9         Section 1141.  Paragraph (g) of subsection (1) and

10  subsection (2) of section 627.602, Florida Statutes, are

11  amended to read:

12         627.602  Scope, format of policy.--

13         (1)  Each health insurance policy delivered or issued

14  for delivery to any person in this state must comply with all

15  applicable provisions of this code and all of the following

16  requirements:

17         (g)  The policy may not contain any provision

18  purporting to make any portion of the charter, rules,

19  constitution, or bylaws of the insurer a part of the policy

20  unless the portion is set forth in full in the policy, except

21  in the case of the incorporation of, or reference to, a

22  statement of rates, statement of classification of risks, or

23  short-rate table filed with the office department.

24         (2)  The office department may require any health

25  insurance policy or certificate containing a provision

26  commonly known as a "deductible provision" to have printed or

27  stamped on such policy or certificate:  "This policy or

28  certificate contains a deductible provision."; or appropriate

29  words of similar import approved by the office department. The

30  statement shall appear on the first page of the policy or

31  certificate in at least 18-point type and may be printed or

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 1  stamped either as an overprint or by means of a rubber stamp

 2  impression.

 3         Section 1142.  Section 627.604, Florida Statutes, is

 4  amended to read:

 5         627.604  Nonresident insured.--If any health insurance

 6  policy is issued by an insurer domiciled in this state for

 7  delivery to a person residing in another state, and if the

 8  official having responsibility for the administration of the

 9  insurance laws of such other state has advised the office

10  department that any such policy is not subject to approval or

11  disapproval by such official, the commission department may by

12  rule require that such policy meet the standards set forth in

13  this part.

14         Section 1143.  Section 627.605, Florida Statutes, is

15  amended to read:

16         627.605  Required provisions; captions, omissions,

17  substitutions.--

18         (1)  Except as provided in subsection (2), each such

19  policy delivered or issued for delivery to any person in this

20  state shall contain the provisions specified in ss.

21  627.606-627.617, inclusive, in the words in which the same

22  appear; except that the insurer may, at its option, substitute

23  for one or more of such provisions corresponding provisions of

24  different wording approved by the office department which are

25  in each instance not less favorable in any respect to the

26  insured or the beneficiary.  Each such provision shall be

27  preceded individually by the applicable caption shown or, at

28  the option of the insurer, by such appropriate individual or

29  group captions or subcaptions as the office department may

30  approve.

31  

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 1         (2)  If any such provision is in whole or in part

 2  inapplicable to or inconsistent with the coverage provided by

 3  a particular form of policy, the insurer, with the approval of

 4  the office department, shall omit from such policy any

 5  inapplicable provision or part of a provision and shall modify

 6  any inconsistent provision or part of a provision in such

 7  manner as to make the provision as contained in the policy

 8  consistent with the coverage provided by the policy.

 9         Section 1144.  Subsection (14) of section 627.6131,

10  Florida Statutes, is amended to read:

11         627.6131  Payment of claims.--

12         (14)  A permissible error ratio of 5 percent is

13  established for insurer's claims payment violations of

14  paragraphs (4)(a), (b), (c), and (e) and (5)(a), (b), (c), and

15  (e).  If the error ratio of a particular insurer does not

16  exceed the permissible error ratio of 5 percent for an audit

17  period, no fine shall be assessed for the noted claims

18  violations for the audit period.  The error ratio shall be

19  determined by dividing the number of claims with violations

20  found on a statistically valid sample of claims for the audit

21  period by the total number of claims in the sample.  If the

22  error ratio exceeds the permissible error ratio of 5 percent,

23  a fine may be assessed according to s. 624.4211 for those

24  claims payment violations which exceed the error ratio.

25  Notwithstanding the provisions of this section, the office

26  department may fine a health insurer for claims payment

27  violations of paragraphs (4)(e) and (5)(e) which create an

28  uncontestable obligation to pay the claim.  The office

29  department shall not fine insurers for violations which the

30  office department determines were due to circumstances beyond

31  the insurer's control.

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 1         Section 1145.  Section 627.618, Florida Statutes, is

 2  amended to read:

 3         627.618  Optional policy provisions.--Except as

 4  provided in s. 627.605(2), no health insurance policy

 5  delivered or issued for delivery to any person in this state

 6  shall contain any provision respecting the matters set forth

 7  in ss. 627.619-627.629, inclusive, unless such provision is in

 8  the words in which the same appears in the applicable section,

 9  except that the insurer may, at its option, use in lieu of any

10  such provision a corresponding provision of different wording

11  approved by the office department which is not less favorable

12  in any respect to the insured or the beneficiary.  Any such

13  provision contained in the policy shall be preceded

14  individually by the appropriate caption or, at the option of

15  the insurer, by such appropriate individual or group captions

16  or subcaptions as the office department may approve.

17         Section 1146.  Subsection (2) of section 627.622,

18  Florida Statutes, is amended to read:

19         627.622  Insurance with other insurers.--

20         (2)  If the foregoing policy provision is included in a

21  policy which also contains the policy provision set out in s.

22  627.623, there shall be added to the caption of the foregoing

23  provision the phrase:  "--Expense-incurred Benefits."  The

24  insurer may, at its option, include in this provision a

25  definition of "other valid coverage," approved as to form by

26  the office department, which definition shall be limited to

27  coverage provided by organizations subject to regulation by

28  the insurance law of any jurisdiction.  In the absence of such

29  definition, such term does not include group insurance,

30  automobile medical payments insurance, or coverage provided by

31  health care services plans or by union welfare plans or

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 1  employer or employee benefit organizations.  Any benefit

 2  provided for an insured pursuant to any compulsory benefit

 3  statute shall in all cases be deemed to be "other valid

 4  coverage" of which the insurer has had notice.  In applying

 5  the foregoing policy provision, no third-party liability

 6  coverage shall be included as "other valid coverage."

 7         Section 1147.  Subsection (2) of section 627.623,

 8  Florida Statutes, Florida Statutes, Florida Statutes, is

 9  amended to read:

10         627.623  Insurance with other insurers; other

11  benefits.--

12         (2)  If the foregoing policy provision is included in a

13  policy which also contains the policy provision set out in s.

14  627.622, there shall be added to the caption of the foregoing

15  provision the phrase:  "--Other Benefits." The insurer may, at

16  its option, include in this provision a definition of "other

17  valid coverage," approved as to form by the office department,

18  which definition shall be limited to coverage provided by

19  organizations subject to regulation by the insurance law of

20  any jurisdiction.  In the absence of such definition, such

21  term does not include group insurance, or benefits provided by

22  union welfare plans or by employer or employee benefit

23  organizations.  Any benefit provided for an insured pursuant

24  to any compulsory benefit statute shall in all cases be deemed

25  to be "other valid coverage" of which the insurer has had

26  notice.  In applying the foregoing policy provision, no

27  third-party liability coverage shall be included as "other

28  valid coverage."

29         Section 1148.  Subsection (2) of section 627.624,

30  Florida Statutes, is amended to read:

31         627.624  Relation of earnings to insurance.--

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 1         (2)  The foregoing policy provision may be inserted

 2  only in a policy which the insured has the right to continue

 3  in force subject to its terms by the timely payment of

 4  premiums until at least age 50 or, in the case of a policy

 5  issued after age 44, for at least 5 years from its date of

 6  issue. The insurer may, at its option, include in this

 7  provision a definition of "valid loss-of-time coverage,"

 8  approved as to form by the office department, which definition

 9  shall be limited to coverage provided by governmental agencies

10  or by organizations subject to regulation by insurance law, or

11  any combination of such coverages.  In the absence of such

12  definition, such term does not include any coverage provided

13  for such insured pursuant to any compulsory benefit statute or

14  benefits provided by union welfare plans or by employer or

15  employee benefit organizations.

16         Section 1149.  Subsection (2) of section 627.635,

17  Florida Statutes, is amended to read:

18         627.635  Excess insurance.--

19         (2)  Any excess insurance policy, or any policy

20  containing any excess insurance provision, shall have

21  imprinted or stamped conspicuously upon the face thereof the

22  designation "excess insurance" or appropriate words of similar

23  import approved by the office department.

24         Section 1150.  Section 627.640, Florida Statutes, is

25  amended to read:

26         627.640  Filing of classifications and rates.--An

27  insurer shall not deliver or issue for delivery in this state

28  any health insurance policy until it has filed with the office

29  department a copy of any applicable classification of risks

30  and premium rates.

31  

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 1         Section 1151.  Paragraph (b) of subsection (3) of

 2  section 627.6425, Florida Statutes, is amended to read:

 3         627.6425  Renewability of individual coverage.--

 4         (3)

 5         (b)1.  Subject to subparagraph (a)3., in any case in

 6  which an insurer elects to discontinue offering all health

 7  insurance coverage in the individual market in this state,

 8  health insurance coverage may be discontinued by the insurer

 9  only if:

10         a.  The insurer provides notice to the office

11  department and to each individual of such discontinuation at

12  least 180 days prior to the date of the nonrenewal of such

13  coverage; and

14         b.  All health insurance issued or delivered for

15  issuance in the state in the individual market is discontinued

16  and coverage under such health insurance coverage in such

17  market is not renewed.

18         2.  In the case of a discontinuation under subparagraph

19  1. in the individual market, the insurer may not provide for

20  the issuance of any individual health insurance coverage in

21  this state during the 5-year period beginning on the date of

22  the discontinuation of the last health insurance coverage not

23  so renewed.

24         Section 1152.  Section 627.643, Florida Statutes, is

25  amended to read:

26         627.643  Uniform minimum standards.--

27         (1)  The commission department shall adopt rules which

28  establish minimum standards for the general content of forms

29  of individual and family health insurance policies.  The rules

30  must include terms of renewability, initial and subsequent

31  conditions of eligibility, termination of insurance,

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 1  probationary periods, exclusions, limitations, and reductions.

 2  The minimum standards are in addition to, and must comply

 3  with, the individual health insurance policy provisions

 4  provided in part II and in this part.

 5         (2)  The commission department shall adopt rules which

 6  establish minimum standards of benefits and identification for

 7  each of the following categories of coverage in individual and

 8  family accident and health insurance policy forms, other than

 9  conversion policy forms:

10         (a)  Basic hospital expense insurance.

11         (b)  Basic medical expense insurance.

12         (c)  Basic surgical expense insurance.

13         (d)  Hospital confinement indemnity insurance.

14         (e)  Major medical expense insurance.

15         (f)  Disability income protection insurance.

16         (g)  Accident-only insurance.

17         (h)  Limited benefit insurance.

18         (i)  Supplemental insurance.

19         (j)  Home health care coverage.

20         (k)  Nonconventional coverage.

21  

22  This subsection does not preclude the issuance of a policy

23  which combines two or more of the categories of coverage

24  enumerated in paragraphs (a)-(e). This subsection does not

25  preclude the issuance of a policy that does not meet the

26  prescribed minimum standards for categories of coverage in

27  paragraphs (a)-(g) if the office department determines that

28  the policy is either experimental in nature or is demonstrated

29  to be a type of coverage that fulfills a reasonable need of

30  the person or persons to be insured. Any policy not meeting

31  the minimum standards that is approved by the office

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 1  department must be identified as to category only as

 2  prescribed by the office department.

 3         (3)  The office department may, within the time

 4  provided by law for the disapproval of an individual or family

 5  form of accident or health insurance, disapprove any form if

 6  it finds that the form does not comply with applicable law or

 7  it finds that the form is unjust, unfair, or inequitable to

 8  the policyholder, any insured, or any beneficiary.  In acting

 9  upon any submission, the office department shall consider

10  whether the benefits afforded under the submitted policy or

11  benefit form fulfill a reasonable need of a policyholder.

12         Section 1153.  Subsection (1) of section 627.647,

13  Florida Statutes, is amended to read:

14         627.647  Standard health claim form.--

15         (1)  The commission department shall prescribe a

16  standard health claim form to be used by all hospitals and a

17  standard health claim form to be used by all physicians,

18  dentists, and pharmacists.  Such forms shall be in a format

19  that allows for the use of generally accepted coding systems

20  by providers in order to facilitate the processing of claims.

21  Such forms shall provide for the disclosure by the claimant of

22  the name, policy number, and address of every insurance policy

23  which may cover the claimant with respect to the submitted

24  claim except those policies specified in s. 627.4235(5). The

25  required information on diagnosis, dental procedures, medical

26  procedures, services, date of service, supplies, and fees may

27  also be met by an attachment to the appropriate physician

28  claim form. However, for the purpose of filing Medicaid

29  claims, such attachments shall be prohibited. Such standard

30  health claim forms shall be accepted by all insurers and all

31  agencies, departments, and divisions of the state.

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 1         Section 1154.  Paragraph (c) of subsection (14) of

 2  section 627.6472, Florida Statutes, is amended to read:

 3         627.6472  Exclusive provider organizations.--

 4         (14)

 5         (c)  The failure of the insurer to pay the assessment

 6  within the time specified in s. 641.58 constitutes grounds for

 7  suspension or revocation of the insurer's certificate of

 8  authority by the office Department of Insurance.

 9         Section 1155.  Paragraphs (a) and (b) of subsection

10  (5), subsection (6), paragraphs (b), (c), (e), and (g) of

11  subsection (7), and subsection (9) of section 627.6475,

12  Florida Statutes, are amended to read:

13         627.6475  Individual reinsurance pool.--

14         (5)  ISSUER'S ELECTION TO BECOME A RISK-ASSUMING

15  CARRIER.--

16         (a)  Each health insurance issuer that offers

17  individual health insurance must elect to become a

18  risk-assuming carrier or a reinsuring carrier for purposes of

19  this section. Each such issuer must make an initial election,

20  binding through December 31, 1999. The issuer's initial

21  election must be made no later than October 31, 1997. By

22  October 31, 1997, all issuers must file a final election,

23  which is binding for 2 years, from January 1, 1998, through

24  December 31, 1999, after which an election shall be binding

25  for a period of 5 years. The office department may permit an

26  issuer to modify its election at any time for good cause

27  shown, after a hearing.

28         (b)  The office department shall establish an

29  application process for issuers seeking to change their status

30  under this subsection.

31  

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 1         (6)  ELECTION PROCESS TO BECOME A RISK-ASSUMING

 2  CARRIER.--

 3         (a)1.  A health insurance issuer that offers individual

 4  health insurance may become a risk-assuming carrier by filing

 5  with the office department a designation of election under

 6  this subsection in a format and manner prescribed by the

 7  commission department. The office department shall approve the

 8  election of a health insurance issuer to become a

 9  risk-assuming carrier if the office department finds that the

10  issuer is capable of assuming that status pursuant to the

11  criteria set forth in paragraph (b).

12         2.  The office department must approve or disapprove

13  any designation as a risk-assuming carrier within 60 days

14  after a filing.

15         (b)  In determining whether to approve an application

16  by an issuer to become a risk-assuming carrier, the office

17  department shall consider:

18         1.  The issuer's financial ability to support the

19  assumption of the risk of individuals.

20         2.  The issuer's history of rating and underwriting

21  individuals.

22         3.  The issuer's commitment to market fairly to all

23  individuals in the state or its service area, as applicable.

24         4.  The issuer's ability to assume and manage the risk

25  of enrolling individuals without the protection of the

26  reinsurance program provided in subsection (7).

27         (c)  The office department shall provide public notice

28  of an issuer's designation of election under this subsection

29  to become a risk-assuming carrier and shall provide at least a

30  21-day period for public comment prior to making a decision on

31  

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 1  the election. The office department shall hold a hearing on

 2  the election at the request of the issuer.

 3         (d)  The office department may rescind the approval

 4  granted to a risk-assuming carrier under this subsection if

 5  the office department finds that the carrier no longer meets

 6  the criteria of paragraph (b).

 7         (7)  INDIVIDUAL HEALTH REINSURANCE PROGRAM.--

 8         (b)  A reinsuring carrier may reinsure with the program

 9  coverage of an eligible individual, subject to each of the

10  following provisions:

11         1.  A reinsuring carrier may reinsure an eligible

12  individual within 60 days after commencement of the coverage

13  of the eligible individual.

14         2.  The program may not reimburse a participating

15  carrier with respect to the claims of a reinsured eligible

16  individual until the carrier has paid incurred claims of at

17  least $5,000 in a calendar year for benefits covered by the

18  program. In addition, the reinsuring carrier is responsible

19  for 10 percent of the next $50,000 and 5 percent of the next

20  $100,000 of incurred claims during a calendar year, and the

21  program shall reinsure the remainder.

22         3.  The board shall annually adjust the initial level

23  of claims and the maximum limit to be retained by the carrier

24  to reflect increases in costs and utilization within the

25  standard market for health benefit plans within the state. The

26  adjustment may not be less than the annual change in the

27  medical component of the "Commerce Price Index for All Urban

28  Consumers" of the Bureau of Labor Statistics of the United

29  States Department of Labor, unless the board proposes and the

30  office department approves a lower adjustment factor.

31  

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 1         4.  A reinsuring carrier may terminate reinsurance for

 2  all reinsured eligible individuals on any plan anniversary.

 3         5.  The premium rate charged for reinsurance by the

 4  program to a health maintenance organization that is approved

 5  by the Secretary of Health and Human Services as a federally

 6  qualified health maintenance organization pursuant to 42

 7  U.S.C. s. 300e(c)(2)(A) and that, as such, is subject to

 8  requirements that limit the amount of risk that may be ceded

 9  to the program, which requirements are more restrictive than

10  subparagraph 2., shall be reduced by an amount equal to that

11  portion of the risk, if any, which exceeds the amount set

12  forth in subparagraph 2., which may not be ceded to the

13  program.

14         6.  The board may consider adjustments to the premium

15  rates charged for reinsurance by the program or carriers that

16  use effective cost-containment measures, including high-cost

17  case management, as defined by the board.

18         7.  A reinsuring carrier shall apply its

19  case-management and claims-handling techniques, including, but

20  not limited to, utilization review, individual case

21  management, preferred provider provisions, other managed-care

22  provisions, or methods of operation consistently with both

23  reinsured business and nonreinsured business.

24         (c)1.  The board, as part of the plan of operation,

25  shall establish a methodology for determining premium rates to

26  be charged by the program for reinsuring eligible individuals

27  pursuant to this section. The methodology must include a

28  system for classifying individuals which reflects the types of

29  case characteristics commonly used by carriers in this state.

30  The methodology must provide for the development of basic

31  reinsurance premium rates, which shall be multiplied by the

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 1  factors set for them in this paragraph to determine the

 2  premium rates for the program. The basic reinsurance premium

 3  rates shall be established by the board, subject to the

 4  approval of the office department, and shall be set at levels

 5  that reasonably approximate gross premiums charged to eligible

 6  individuals for individual health insurance by health

 7  insurance issuers. The premium rates set by the board may vary

 8  by geographical area, as determined under this section, to

 9  reflect differences in cost. An eligible individual may be

10  reinsured for a rate that is five times the rate established

11  by the board.

12         2.  The board shall periodically review the methodology

13  established, including the system of classification and any

14  rating factors, to ensure that it reasonably reflects the

15  claims experience of the program. The board may propose

16  changes to the rates that are subject to the approval of the

17  office department.

18         (e)1.  Before March 1 of each calendar year, the board

19  shall determine and report to the office department the

20  program net loss in the individual account for the previous

21  year, including administrative expenses for that year and the

22  incurred losses for that year, taking into account investment

23  income and other appropriate gains and losses.

24         2.  Any net loss in the individual account for the year

25  shall be recouped by assessing the carriers as follows:

26         a.  The operating losses of the program shall be

27  assessed in the following order subject to the specified

28  limitations. The first tier of assessments shall be made

29  against reinsuring carriers in an amount that may not exceed 5

30  percent of each reinsuring carrier's premiums for individual

31  health insurance. If such assessments have been collected and

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 1  additional moneys are needed, the board shall make a second

 2  tier of assessments in an amount that may not exceed 0.5

 3  percent of each carrier's health benefit plan premiums.

 4         b.  Except as provided in paragraph (f), risk-assuming

 5  carriers are exempt from all assessments authorized pursuant

 6  to this section. The amount paid by a reinsuring carrier for

 7  the first tier of assessments shall be credited against any

 8  additional assessments made.

 9         c.  The board shall equitably assess reinsuring

10  carriers for operating losses of the individual account based

11  on market share. The board shall annually assess each carrier

12  a portion of the operating losses of the individual account.

13  The first tier of assessments shall be determined by

14  multiplying the operating losses by a fraction, the numerator

15  of which equals the reinsuring carrier's earned premium

16  pertaining to direct writings of individual health insurance

17  in the state during the calendar year for which the assessment

18  is levied, and the denominator of which equals the total of

19  all such premiums earned by reinsuring carriers in the state

20  during that calendar year. The second tier of assessments

21  shall be based on the premiums that all carriers, except

22  risk-assuming carriers, earned on all health benefit plans

23  written in this state. The board may levy interim assessments

24  against reinsuring carriers to ensure the financial ability of

25  the plan to cover claims expenses and administrative expenses

26  paid or estimated to be paid in the operation of the plan for

27  the calendar year prior to the association's anticipated

28  receipt of annual assessments for that calendar year. Any

29  interim assessment is due and payable within 30 days after

30  receipt by a carrier of the interim assessment notice. Interim

31  assessment payments shall be credited against the carrier's

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 1  annual assessment. Health benefit plan premiums and benefits

 2  paid by a carrier that are less than an amount determined by

 3  the board to justify the cost of collection may not be

 4  considered for purposes of determining assessments.

 5         d.  Subject to the approval of the office department,

 6  the board shall adjust the assessment formula for reinsuring

 7  carriers that are approved as federally qualified health

 8  maintenance organizations by the Secretary of Health and Human

 9  Services pursuant to 42 U.S.C. s. 300e(c)(2)(A) to the extent,

10  if any, that restrictions are placed on them which are not

11  imposed on other carriers.

12         3.  Before March 1 of each year, the board shall

13  determine and file with the office department an estimate of

14  the assessments needed to fund the losses incurred by the

15  program in the individual account for the previous calendar

16  year.

17         4.  If the board determines that the assessments needed

18  to fund the losses incurred by the program in the individual

19  account for the previous calendar year will exceed the amount

20  specified in subparagraph 2., the board shall evaluate the

21  operation of the program and report its findings and

22  recommendations to the office department in the format

23  established in s. 627.6699(11) for the comparable report for

24  the small employer reinsurance program.

25         (g)  Except as otherwise provided in this section, the

26  board and the office department shall have all powers, duties,

27  and responsibilities with respect to carriers that issue and

28  reinsure individual health insurance, as specified for the

29  board and the office department in s. 627.6699(11) with

30  respect to small employer carriers, including, but not limited

31  to, the provisions of s. 627.6699(11) relating to:

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 1         1.  Use of assessments that exceed the amount of actual

 2  losses and expenses.

 3         2.  The annual determination of each carrier's

 4  proportion of the assessment.

 5         3.  Interest for late payment of assessments.

 6         4.  Authority for the office department to approve

 7  deferment of an assessment against a carrier.

 8         5.  Limited immunity from legal actions or carriers.

 9         6.  Development of standards for compensation to be

10  paid to agents. Such standards shall be limited to those

11  specifically enumerated in s. 627.6699(13)(d).

12         7.  Monitoring compliance by carriers with this

13  section.

14         (9)  RULEMAKING AUTHORITY.--The commission department

15  may adopt rules to administer this section, including rules

16  governing compliance by carriers.

17         Section 1156.  Subsections (11) and (12) of section

18  627.6482, Florida Statutes, are amended to read:

19         627.6482  Definitions.--As used in ss.

20  627.648-627.6498, the term:

21         (11)  "Plan" means the comprehensive health insurance

22  plan adopted by the association or by rule of the commission

23  Department of Insurance.

24         (12)  "Premium" means the entire cost of an insurance

25  plan, including the administrative fee, the risk assumption

26  charge, and, in the instance of a minimum premium plan or

27  stop-loss coverage, the incurred claims whether or not such

28  claims are paid directly by the insurer.  "Premium" shall not

29  include a health maintenance organization's annual earned

30  premium revenue for Medicare and Medicaid contracts for any

31  assessment due for calendar years 1990 and 1991.  For

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 1  assessments due for calendar year 1992 and subsequent years, a

 2  health maintenance organization's annual earned premium

 3  revenue for Medicare and Medicaid contracts is subject to

 4  assessments unless the office department determines that the

 5  health maintenance organization has made a reasonable effort

 6  to amend its Medicare or Medicaid government contract for 1992

 7  and subsequent years to provide reimbursement for any

 8  assessment on Medicare or Medicaid premiums paid by the health

 9  maintenance organization and the contract does not provide for

10  such reimbursement.

11         Section 1157.  Subsections (1) and (2) of section

12  627.6484, Florida Statutes, are amended to read:

13         627.6484  Termination of enrollment; availability of

14  other coverage.--

15         (1)  The association shall accept applications for

16  insurance only until June 30, 1991, after which date no

17  further applications may be accepted. Upon receipt of an

18  application for insurance, the association shall issue

19  coverage for an eligible applicant.  When appropriate, the

20  administrator shall forward a copy of the application to a

21  market assistance plan created by the office department, which

22  shall conduct a diligent search of the private marketplace for

23  a carrier willing to accept the application.

24         (2)  The office department shall, after consultation

25  with the health insurers licensed in this state, adopt a

26  market assistance plan to assist in the placement of risks of

27  Florida Comprehensive Health Association applicants. All

28  health insurers and health maintenance organizations licensed

29  in this state shall participate in the plan.

30  

31  

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 1         Section 1158.  Paragraph (b) of subsection (4),

 2  paragraph (a) of subsection (5), and subsection (6) of section

 3  627.6487, Florida Statutes, are amended to read:

 4         627.6487  Guaranteed availability of individual health

 5  insurance coverage to eligible individuals.--

 6         (4)

 7         (b)  The requirement of this subsection is met for

 8  health insurance coverage policy forms offered by an issuer in

 9  the individual market if the issuer offers the policy forms

10  for individual health insurance coverage with the largest, and

11  next to largest, premium volume of all such policy forms

12  offered by the issuer in this state or applicable marketing or

13  service area, as prescribed in rules adopted by the commission

14  department, in the individual market in the period involved.

15  To the greatest extent possible, such rules must be consistent

16  with regulations adopted by the United States Department of

17  Health and Human Services.

18         (5)(a)  In the case of a health insurance issuer that

19  offers individual health insurance coverage through a network

20  plan, the issuer may:

21         1.  Limit the individuals who may be enrolled under

22  such coverage to those who live, reside, or work within the

23  service area for such network plan; and

24         2.  Within the service area of such plan, deny such

25  coverage to such individuals if the issuer has demonstrated to

26  the office department that:

27         a.  It will not have the capacity to deliver services

28  adequately to additional individual enrollees because of its

29  obligations to existing group contract holders and enrollees

30  and individual enrollees; and

31  

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 1         b.  It is applying this paragraph uniformly to

 2  individuals without regard to any health-status-related factor

 3  of such individuals and without regard to whether the

 4  individuals are eligible individuals.

 5         (6)(a)  A health insurance issuer may deny individual

 6  health insurance coverage to an eligible individual if the

 7  issuer has demonstrated to the office department that:

 8         1.  It does not have the financial reserves necessary

 9  to underwrite additional coverage; and

10         2.  It is applying this paragraph uniformly to all

11  individuals in the individual market in this state consistent

12  with the laws of this state and without regard to any

13  health-status-related factor of such individuals and without

14  regard to whether the individuals are eligible individuals.

15         (b)  An issuer, upon denying individual health

16  insurance coverage in any service area in accordance with

17  paragraph (a), may not offer such coverage in the individual

18  market within such service area for a period of 180 days after

19  the date such coverage is denied or until the issuer has

20  demonstrated to the office department that the issuer has

21  sufficient financial reserves to underwrite additional

22  coverage, whichever occurs later.

23         Section 1159.  Paragraphs (a) and (e) of subsection

24  (2), subsection (3), paragraphs (e), (j), and (k) of

25  subsection (4), and subsection (6) of section 627.6488,

26  Florida Statutes, are amended to read:

27         627.6488  Florida Comprehensive Health Association.--

28         (2)(a)  The association shall operate subject to the

29  supervision and approval of a three-member board of directors.

30  The board of directors shall be appointed by the Chief

31  Financial Officer Insurance Commissioner as follows:

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 1         1.  The chair of the board shall be the Chief Financial

 2  Officer Insurance Commissioner or his or her designee.

 3         2.  One representative of policyholders who is not

 4  associated with the medical profession, a hospital, or an

 5  insurer.

 6         3.  One representative of insurers.

 7  

 8  The administrator or his or her affiliate shall not be a

 9  member of the board. Any board member appointed by the Chief

10  Financial Officer commissioner may be removed and replaced by

11  him or her at any time without cause.

12         (e)  There shall be no liability on the part of, and no

13  cause of action of any nature shall arise against, any member

14  insurer, or its agents or employees, agents or employees of

15  the association, members of the board of directors of the

16  association, or the Chief Financial Officer's departmental

17  representatives for any act or omission taken by them in the

18  performance of their powers and duties under this act, unless

19  such act or omission by such person is in intentional

20  disregard of the rights of the claimant.

21         (3)  The association shall adopt a plan pursuant to

22  this act and submit its articles, bylaws, and operating rules

23  to the office department for approval.  If the association

24  fails to adopt such plan and suitable articles, bylaws, and

25  operating rules within 180 days after the appointment of the

26  board, the commission department shall adopt rules to

27  effectuate the provisions of this act; and such rules shall

28  remain in effect until superseded by a plan and articles,

29  bylaws, and operating rules submitted by the association and

30  approved by the office department.

31         (4)  The association shall:

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 1         (e)  Require that all policy forms issued by the

 2  association conform to standard forms developed by the

 3  association. The forms shall be approved by the office

 4  department.

 5         (j)  Make a report to the Governor, the office

 6  Insurance Commissioner, the President of the Senate, the

 7  Speaker of the House of Representatives, and the Minority

 8  Leaders of the Senate and House of Representatives, not later

 9  than 45 days after the close of each calendar quarter, which

10  includes, for the prior quarter, current data and estimates of

11  net written and earned premiums, the expenses of

12  administration, and the paid and incurred losses.  The report

13  shall identify any statutorily mandated program that has not

14  been fully implemented by the board.

15         (k)  To facilitate preparation of assessments and for

16  other purposes, the board shall direct preparation of annual

17  audited financial statements for each calendar year as soon as

18  feasible following the conclusion of that calendar year, and

19  shall, within 30 days after rendition of such statements, file

20  with the office department the annual report containing such

21  information as required by the office department to be filed

22  on March 1 of each year.

23         (6)  The office department shall examine and

24  investigate the association in the manner provided in part II

25  of chapter 624.

26         Section 1160.  Paragraph (f) of subsection (3) of

27  section 627.649, Florida Statutes, is amended to read:

28         627.649  Administrator.--

29         (3)  The administrator shall:

30         (f)  Following the close of each calendar year,

31  determine net premiums, reinsurance premiums less

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 1  administrative expense allowance, the expense of

 2  administration pertaining to the reinsurance operations of the

 3  association, and the incurred losses of the year and report

 4  this information to the association and the office department.

 5         Section 1161.  Subsection (2) of section 627.6494,

 6  Florida Statutes, is amended to read:

 7         627.6494  Assessments; deferment, limitation.--

 8         (2)  The association, upon approval of the office

 9  department, may abate or defer, in whole or in part, the

10  assessment of a participating insurer if, in the opinion of

11  the board, payment of the assessment would endanger the

12  ability of the participating insurer to fulfill its

13  contractual obligations. In the event that an assessment

14  against a participating insurer is abated or deferred, in

15  whole or in part, the amount by which such assessment is

16  abated or deferred may be assessed against the other

17  participating insurers in a manner consistent with the basis

18  for assessments set forth in s. 627.6492; and the insurer

19  receiving such abatement or deferment shall remain liable to

20  the association for the deficiency for 4 years.

21         Section 1162.  Paragraph (a) of subsection (4) of

22  section 627.6498, Florida Statutes, is amended to read:

23         627.6498  Minimum benefits coverage; exclusions;

24  premiums; deductibles.--

25         (4)  PREMIUMS, DEDUCTIBLES, AND COINSURANCE.--

26         (a)  The plan shall provide for annual deductibles for

27  major medical expense coverage in the amount of $1,000 or any

28  higher amounts proposed by the board and approved by the

29  office department, plus the benefits payable under any other

30  type of insurance coverage or workers' compensation.  The

31  schedule of premiums and deductibles shall be established by

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 1  the association. With regard to any preferred provider

 2  arrangement utilized by the association, the deductibles

 3  provided in this paragraph shall be the minimum deductibles

 4  applicable to the preferred providers and higher deductibles,

 5  as approved by the office department, may be applied to

 6  providers who are not preferred providers.

 7         1.  Separate schedules of premium rates based on age

 8  may apply for individual risks.

 9         2.  Rates are subject to approval by the office

10  department.

11         3.  Standard risk rates for coverages issued by the

12  association shall be established by the office department,

13  pursuant to s. 627.6675(3).

14         4.  The board shall establish separate premium

15  schedules for low-risk individuals, medium-risk individuals,

16  and high-risk individuals and shall revise premium schedules

17  annually beginning January 1999. No rate shall exceed 200

18  percent of the standard risk rate for low-risk individuals,

19  225 percent of the standard risk rate for medium-risk

20  individuals, or 250 percent of the standard risk rate for

21  high-risk individuals. For the purpose of determining what

22  constitutes a low-risk individual, medium-risk individual, or

23  high-risk individual, the board shall consider the anticipated

24  claims payment for individuals based upon an individual's

25  health condition.

26         Section 1163.  Section 627.6499, Florida Statutes, is

27  amended to read:

28         627.6499  Reporting by insurers and third-party

29  administrators.--The office department may require any

30  insurer, third-party administrator, or service company to

31  

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 1  report any information reasonably required to assist the board

 2  in assessing insurers as required by this act.

 3         Section 1164.  Subsections (4) and (5) of section

 4  627.6515, Florida Statutes, are amended to read:

 5         627.6515  Out-of-state groups.--

 6         (4)  Prior to solicitation in this state, a copy of the

 7  master policy and a copy of the form of the certificate

 8  evidencing coverage that will be issued to residents of this

 9  state shall be filed with the office department for

10  informational purposes.

11         (5)  Prior to solicitation in this state, an officer of

12  the insurer shall truthfully certify to the office department

13  that the policy and certificates evidencing coverage have been

14  reviewed and approved by the state in which the group policy

15  is issued.

16         Section 1165.  Paragraphs (a), (b), and (c) of

17  subsection (5), paragraph (b) of subsection (7), paragraphs

18  (a) and (e) of subsection (8), and paragraph (b) of subsection

19  (9) of section 627.6561, Florida Statutes, are amended to

20  read:

21         627.6561  Preexisting conditions.--

22         (5)(a)  The term, "creditable coverage," means, with

23  respect to an individual, coverage of the individual under any

24  of the following:

25         1.  A group health plan, as defined in s. 2791 of the

26  Public Health Service Act.

27         2.  Health insurance coverage consisting of medical

28  care, provided directly, through insurance or reimbursement,

29  or otherwise and including terms and services paid for as

30  medical care, under any hospital or medical service policy or

31  certificate, hospital or medical service plan contract, or

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 1  health maintenance contract offered by a health insurance

 2  issuer.

 3         3.  Part A or part B of Title XVIII of the Social

 4  Security Act.

 5         4.  Title XIX of the Social Security Act, other than

 6  coverage consisting solely of benefits under s. 1928.

 7         5.  Chapter 55 of Title 10, United States Code.

 8         6.  A medical care program of the Indian Health Service

 9  or of a tribal organization.

10         7.  The Florida Comprehensive Health Association or

11  another state health benefit risk pool.

12         8.  A health plan offered under chapter 89 of Title 5,

13  United States Code.

14         9.  A public health plan as defined by rules adopted by

15  the commission department. To the greatest extent possible,

16  such rules must be consistent with regulations adopted by the

17  United States Department of Health and Human Services.

18         10.  A health benefit plan under s. 5(e) of the Peace

19  Corps Act (22 U.S.C. s. 2504(e)).

20         (b)  Creditable coverage does not include coverage that

21  consists solely of one or more or any combination thereof of

22  the following excepted benefits:

23         1.  Coverage only for accident, or disability income

24  insurance, or any combination thereof.

25         2.  Coverage issued as a supplement to liability

26  insurance.

27         3.  Liability insurance, including general liability

28  insurance and automobile liability insurance.

29         4.  Workers' compensation or similar insurance.

30         5.  Automobile medical payment insurance.

31         6.  Credit-only insurance.

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 1         7.  Coverage for on-site medical clinics, including

 2  prepaid health clinics under part II of chapter 641.

 3         8.  Other similar insurance coverage, specified in

 4  rules adopted by the commission department, under which

 5  benefits for medical care are secondary or incidental to other

 6  insurance benefits. To the extent possible, such rules must be

 7  consistent with regulations adopted by the United States

 8  Department of Health and Human Services.

 9         (c)  The following benefits are not subject to the

10  creditable coverage requirements, if offered separately:

11         1.  Limited scope dental or vision benefits.

12         2.  Benefits for long-term care, nursing home care,

13  home health care, community-based care, or any combination

14  thereof.

15         3.  Such other similar, limited benefits as are

16  specified in rules adopted by the commission department.

17         (7)

18         (b)  An insurer may elect to count, as creditable

19  coverage, coverage of benefits within each of several classes

20  or categories of benefits specified in rules adopted by the

21  commission department rather than as provided under paragraph

22  (a). To the extent possible, such rules must be consistent

23  with regulations adopted by the United States Department of

24  Health and Human Services. Such election shall be made on a

25  uniform basis for all participants and beneficiaries. Under

26  such election, an insurer shall count a period of creditable

27  coverage with respect to any class or category of benefits if

28  any level of benefits is covered within such class or

29  category.

30         (8)(a)  Periods of creditable coverage with respect to

31  an individual shall be established through presentation of

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 1  certifications described in this subsection or in such other

 2  manner as is specified in rules adopted by the commission

 3  department. To the extent possible, such rules must be

 4  consistent with regulations adopted by the United States

 5  Department of Health and Human Services.

 6         (e)  The commission department shall adopt rules to

 7  prevent an insurer's failure to provide information under this

 8  subsection with respect to previous coverage of an individual

 9  from adversely affecting any subsequent coverage of the

10  individual under another group health plan or health insurance

11  coverage. To the greatest extent possible, such rules must be

12  consistent with regulations adopted by the United States

13  Department of Health and Human Services.

14         (9)

15         (b)  The commission department shall adopt rules that

16  provide a process whereby individuals who need to establish

17  creditable coverage for periods before July 1, 1996, and who

18  would have such coverage credited but for paragraph (a), may

19  be given credit for creditable coverage for such periods

20  through the presentation of documents or other means. To the

21  greatest extent possible, such rules must be consistent with

22  regulations adopted by the United States Department of Health

23  and Human Services.

24         Section 1166.  Paragraph (b) of subsection (3) of

25  section 627.6571, Florida Statutes, is amended to read:

26         627.6571  Guaranteed renewability of coverage.--

27         (3)

28         (b)1.  In any case in which an insurer elects to

29  discontinue offering all health insurance coverage in the

30  small-group market or the large-group market, or both, in this

31  

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 1  state, health insurance coverage may be discontinued by the

 2  insurer only if:

 3         a.  The insurer provides notice to the office

 4  department and to each policyholder, and participants and

 5  beneficiaries covered under such coverage, of such

 6  discontinuation at least 180 days prior to the date of the

 7  nonrenewal of such coverage; and

 8         b.  All health insurance issued or delivered for

 9  issuance in this state in such market is discontinued and

10  coverage under such health insurance coverage in such market

11  is not renewed.

12         2.  In the case of a discontinuation under subparagraph

13  1. in a market, the insurer may not provide for the issuance

14  of any health insurance coverage in the market in this state

15  during the 5-year period beginning on the date of the

16  discontinuation of the last insurance coverage not renewed.

17         Section 1167.  Section 627.6675, Florida Statutes, is

18  amended to read:

19         627.6675  Conversion on termination of

20  eligibility.--Subject to all of the provisions of this

21  section, a group policy delivered or issued for delivery in

22  this state by an insurer or nonprofit health care services

23  plan that provides, on an expense-incurred basis, hospital,

24  surgical, or major medical expense insurance, or any

25  combination of these coverages, shall provide that an employee

26  or member whose insurance under the group policy has been

27  terminated for any reason, including discontinuance of the

28  group policy in its entirety or with respect to an insured

29  class, and who has been continuously insured under the group

30  policy, and under any group policy providing similar benefits

31  that the terminated group policy replaced, for at least 3

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 1  months immediately prior to termination, shall be entitled to

 2  have issued to him or her by the insurer a policy or

 3  certificate of health insurance, referred to in this section

 4  as a "converted policy." A group insurer may meet the

 5  requirements of this section by contracting with another

 6  insurer, authorized in this state, to issue an individual

 7  converted policy, which policy has been approved by the office

 8  department under s. 627.410. An employee or member shall not

 9  be entitled to a converted policy if termination of his or her

10  insurance under the group policy occurred because he or she

11  failed to pay any required contribution, or because any

12  discontinued group coverage was replaced by similar group

13  coverage within 31 days after discontinuance.

14         (1)  TIME LIMIT.--Written application for the converted

15  policy shall be made and the first premium must be paid to the

16  insurer, not later than 63 days after termination of the group

17  policy. However, if termination was the result of failure to

18  pay any required premium or contribution and such nonpayment

19  of premium was due to acts of an employer or policyholder

20  other than the employee or certificateholder, written

21  application for the converted policy must be made and the

22  first premium must be paid to the insurer not later than 63

23  days after notice of termination is mailed by the insurer or

24  the employer, whichever is earlier, to the employee's or

25  certificateholder's last address as shown by the record of the

26  insurer or the employer, whichever is applicable. In such case

27  of termination due to nonpayment of premium by the employer or

28  policyholder, the premium for the converted policy may not

29  exceed the rate for the prior group coverage for the period of

30  coverage under the converted policy prior to the date notice

31  of termination is mailed to the employee or certificateholder.

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 1  For the period of coverage after such date, the premium for

 2  the converted policy is subject to the requirements of

 3  subsection (3).

 4         (2)  EVIDENCE OF INSURABILITY.--The converted policy

 5  shall be issued without evidence of insurability.

 6         (3)  CONVERSION PREMIUM; EFFECT ON PREMIUM RATES FOR

 7  GROUP COVERAGE.--

 8         (a)  The premium for the converted policy shall be

 9  determined in accordance with premium rates applicable to the

10  age and class of risk of each person to be covered under the

11  converted policy and to the type and amount of insurance

12  provided.  However, the premium for the converted policy may

13  not exceed 200 percent of the standard risk rate as

14  established by the office department, pursuant to this

15  subsection.

16         (b)  Actual or expected experience under converted

17  policies may be combined with such experience under group

18  policies for the purposes of determining premium and loss

19  experience and establishing premium rate levels for group

20  coverage.

21         (c)  The office department shall annually determine

22  standard risk rates, using reasonable actuarial techniques and

23  standards adopted by the commission department by rule. The

24  standard risk rates must be determined as follows:

25         1.  Standard risk rates for individual coverage must be

26  determined separately for indemnity policies, preferred

27  provider/exclusive provider policies, and health maintenance

28  organization contracts.

29         2.  The office department shall survey insurers and

30  health maintenance organizations representing at least an 80

31  percent market share, based on premiums earned in the state

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 1  for the most recent calendar year, for each of the categories

 2  specified in subparagraph 1.

 3         3.  Standard risk rate schedules must be determined,

 4  computed as the average rates charged by the carriers

 5  surveyed, giving appropriate weight to each carrier's

 6  statewide market share of earned premiums.

 7         4.  The rate schedule shall be determined from analysis

 8  of the one county with the largest market share in the state

 9  of all such carriers.

10         5.  The rate for other counties must be determined by

11  using the weighted average of each carrier's county factor

12  relationship to the county determined in subparagraph 4.

13         6.  The rate schedule must be determined for different

14  age brackets and family size brackets.

15         (4)  EFFECTIVE DATE OF COVERAGE.--The effective date of

16  the converted policy shall be the day following the

17  termination of insurance under the group policy.

18         (5)  SCOPE OF COVERAGE.--The converted policy shall

19  cover the employee or member and his or her dependents who

20  were covered by the group policy on the date of termination of

21  insurance.  At the option of the insurer, a separate converted

22  policy may be issued to cover any dependent.

23         (6)  OPTIONAL COVERAGE.--The insurer shall not be

24  required to issue a converted policy covering any person who

25  is or could be covered by Medicare. The insurer shall not be

26  required to issue a converted policy covering a person if

27  paragraphs (a) and (b) apply to the person:

28         (a)  If any of the following apply to the person:

29         1.  The person is covered for similar benefits by

30  another hospital, surgical, medical, or major medical expense

31  insurance policy or hospital or medical service subscriber

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 1  contract or medical practice or other prepayment plan, or by

 2  any other plan or program.

 3         2.  The person is eligible for similar benefits,

 4  whether or not actually provided coverage, under any

 5  arrangement of coverage for individuals in a group, whether on

 6  an insured or uninsured basis.

 7         3.  Similar benefits are provided for or are available

 8  to the person under any state or federal law.

 9         (b)  If the benefits provided under the sources

10  referred to in subparagraph (a)1. or the benefits provided or

11  available under the sources referred to in subparagraphs (a)2.

12  and 3., together with the benefits provided by the converted

13  policy, would result in overinsurance according to the

14  insurer's standards.  The insurer's standards must bear some

15  reasonable relationship to actual health care costs in the

16  area in which the insured lives at the time of conversion and

17  must be filed with the office department prior to their use in

18  denying coverage.

19         (7)  INFORMATION REQUESTED BY INSURER.--

20         (a)  A converted policy may include a provision under

21  which the insurer may request information, in advance of any

22  premium due date, of any person covered thereunder as to

23  whether:

24         1.  The person is covered for similar benefits by

25  another hospital, surgical, medical, or major medical expense

26  insurance policy or hospital or medical service subscriber

27  contract or medical practice or other prepayment plan or by

28  any other plan or program.

29         2.  The person is covered for similar benefits under

30  any arrangement of coverage for individuals in a group,

31  whether on an insured or uninsured basis.

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 1         3.  Similar benefits are provided for or are available

 2  to the person under any state or federal law.

 3         (b)  The converted policy may provide that the insurer

 4  may refuse to renew the policy or the coverage of any person

 5  only for one or more of the following reasons:

 6         1.  Either the benefits provided under the sources

 7  referred to in subparagraphs (a)1. and 2. for the person or

 8  the benefits provided or available under the sources referred

 9  to in subparagraph (a)3. for the person, together with the

10  benefits provided by the converted policy, would result in

11  overinsurance according to the insurer's standards on file

12  with the office department.

13         2.  The converted policyholder fails to provide the

14  information requested pursuant to paragraph (a).

15         3.  Fraud or intentional misrepresentation in applying

16  for any benefits under the converted policy.

17         4.  Other reasons approved by the office department.

18         (8)  BENEFITS OFFERED.--

19         (a)  An insurer shall not be required to issue a

20  converted policy that provides benefits in excess of those

21  provided under the group policy from which conversion is made.

22         (b)  An insurer shall offer the benefits specified in

23  s. 627.668 and the benefits specified in s. 627.669 if those

24  benefits were provided in the group plan.

25         (c)  An insurer shall offer maternity benefits and

26  dental benefits if those benefits were provided in the group

27  plan.

28         (9)  PREEXISTING CONDITION PROVISION.--The converted

29  policy shall not exclude a preexisting condition not excluded

30  by the group policy. However, the converted policy may provide

31  that any hospital, surgical, or medical benefits payable under

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 1  the converted policy may be reduced by the amount of any such

 2  benefits payable under the group policy after the termination

 3  of coverage covered under the group policy. The converted

 4  policy may also provide that during the first policy year the

 5  benefits payable under the converted policy, together with the

 6  benefits payable under the group policy, shall not exceed

 7  those that would have been payable had the individual's

 8  insurance under the group policy remained in force.

 9         (10)  REQUIRED OPTION FOR MAJOR MEDICAL

10  COVERAGE.--Subject to the provisions and conditions of this

11  part, the employee or member shall be entitled to obtain a

12  converted policy providing major medical coverage under a plan

13  meeting the following requirements:

14         (a)  A maximum benefit equal to the lesser of the

15  policy limit of the group policy from which the individual

16  converted or $500,000 per covered person for all covered

17  medical expenses incurred during the covered person's

18  lifetime.

19         (b)  Payment of benefits at the rate of 80 percent of

20  covered medical expenses which are in excess of the

21  deductible, until 20 percent of such expenses in a benefit

22  period reaches $2,000, after which benefits will be paid at

23  the rate of 90 percent during the remainder of the contract

24  year unless the insured is in the insurer's case management

25  program, in which case benefits shall be paid at the rate of

26  100 percent during the remainder of the contract year.  For

27  the purposes of this paragraph, "case management program"

28  means the specific supervision and management of the medical

29  care provided or prescribed for a specific individual, which

30  may include the use of health care providers designated by the

31  insurer.  Payment of benefits for outpatient treatment of

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 1  mental illness, if provided in the converted policy, may be at

 2  a lesser rate but not less than 50 percent.

 3         (c)  A deductible for each calendar year that must be

 4  $500, $1,000, or $2,000, at the option of the policyholder.

 5         (d)  The term "covered medical expenses," as used in

 6  this subsection, shall be consistent with those customarily

 7  offered by the insurer under group or individual health

 8  insurance policies but is not required to be identical to the

 9  covered medical expenses provided in the group policy from

10  which the individual converted.

11         (11)  ALTERNATIVE PLANS.--The insurer shall, in

12  addition to the option required by subsection (10), offer the

13  standard health benefit plan, as established pursuant to s.

14  627.6699(12). The insurer may, at its option, also offer

15  alternative plans for group health conversion in addition to

16  the plans required by this section.

17         (12)  RETIREMENT COVERAGE.--If coverage would be

18  continued under the group policy on an employee following the

19  employee's retirement prior to the time he or she is or could

20  be covered by Medicare, the employee may elect, instead of

21  such continuation of group insurance, to have the same

22  conversion rights as would apply had his or her insurance

23  terminated at retirement by reason or termination of

24  employment or membership.

25         (13)  REDUCTION OF COVERAGE DUE TO MEDICARE.--The

26  converted policy may provide for reduction of coverage on any

27  person upon his or her eligibility for coverage under Medicare

28  or under any other state or federal law providing for benefits

29  similar to those provided by the converted policy.

30         (14)  CONVERSION PRIVILEGE ALLOWED.--The conversion

31  privilege shall also be available to any of the following:

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 1         (a)  The surviving spouse, if any, at the death of the

 2  employee or member, with respect to the spouse and the

 3  children whose coverages under the group policy terminate by

 4  reason of the death, otherwise to each surviving child whose

 5  coverage under the group policy terminates by reason of such

 6  death, or, if the group policy provides for continuation of

 7  dependents' coverages following the employee's or member's

 8  death, at the end of such continuation.

 9         (b)  The former spouse whose coverage would otherwise

10  terminate because of annulment or dissolution of marriage, if

11  the former spouse is dependent for financial support.

12         (c)  The spouse of the employee or member upon

13  termination of coverage of the spouse, while the employee or

14  member remains insured under the group policy, by reason of

15  ceasing to be a qualified family member under the group

16  policy, with respect to the spouse and the children whose

17  coverages under the group policy terminate at the same time.

18         (d)  A child solely with respect to himself or herself

19  upon termination of his or her coverage by reason of ceasing

20  to be a qualified family member under the group policy, if a

21  conversion privilege is not otherwise provided in this

22  subsection with respect to such termination.

23         (15)  BENEFIT LEVELS.--If the benefit levels required

24  in subsection (10) exceed the benefit levels provided under

25  the group policy, the conversion policy may offer benefits

26  which are substantially similar to those provided under the

27  group policy in lieu of those required in subsection (10).

28         (16)  GROUP COVERAGE INSTEAD OF INDIVIDUAL

29  COVERAGE.--The insurer may elect to provide group insurance

30  coverage instead of issuing a converted individual policy.

31  

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 1         (17)  NOTIFICATION.--A notification of the conversion

 2  privilege shall be included in each certificate of coverage.

 3  The insurer shall mail an election and premium notice form,

 4  including an outline of coverage, on a form approved by the

 5  office department, within 14 days after an individual who is

 6  eligible for a converted policy gives notice to the insurer

 7  that the individual is considering applying for the converted

 8  policy or otherwise requests such information. The outline of

 9  coverage must contain a description of the principal benefits

10  and coverage provided by the policy and its principal

11  exclusions and limitations, including, but not limited to,

12  deductibles and coinsurance.

13         (18)  OUTSIDE CONVERSIONS.--A converted policy that is

14  delivered outside of this state must be on a form that could

15  be delivered in the other jurisdiction as a converted policy

16  had the group policy been issued in that jurisdiction.

17         (19)  APPLICABILITY.--This section does not require

18  conversion on termination of eligibility for a policy or

19  contract that provides benefits for specified diseases, or for

20  accidental injuries only, disability income, Medicare

21  supplement, hospital indemnity, limited benefit,

22  nonconventional, or excess policies.

23         (20)  Nothing in this section or in the incorporation

24  of it into insurance policies shall be construed to require

25  insurers to provide benefits equal to those provided in the

26  group policy from which the individual converted; provided,

27  however, that comprehensive benefits are offered which shall

28  be subject to approval by the office Insurance Commissioner.

29         Section 1168.  Paragraph (a) of subsection (2) of

30  section 627.6685, Florida Statutes, is amended to read:

31         627.6685  Mental health coverage.--

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 1         (2)  BENEFITS.--

 2         (a)1.  In the case of a group health plan, or health

 3  insurance coverage offered in connection with such a plan,

 4  which provides both medical and surgical benefits and mental

 5  health benefits:

 6         a.  If the plan or coverage does not include an

 7  aggregate lifetime limit on substantially all medical and

 8  surgical benefits, the plan or coverage may not impose any

 9  aggregate lifetime limit on mental health benefits.

10         b.  If the plan or coverage includes an aggregate

11  lifetime limit on substantially all medical and surgical

12  benefits, the plan or coverage must:

13         (I)  Apply that applicable lifetime limit both to the

14  medical and surgical benefits to which it otherwise would

15  apply and to mental health benefits and not distinguish in the

16  application of such limit between such medical and surgical

17  benefits and mental health benefits; or

18         (II)  Not include any aggregate lifetime limit on

19  mental health benefits which is less than that applicable

20  lifetime limit.

21         c.  For any plan or coverage that is not described in

22  sub-subparagraph a. or sub-subparagraph b. and that includes

23  no or different aggregate lifetime limits on different

24  categories of medical and surgical benefits, the commission

25  department shall establish rules under which sub-subparagraph

26  b. is applied to such plan or coverage with respect to mental

27  health benefits by substituting for the applicable lifetime

28  limit an average aggregate lifetime limit that is computed

29  taking into account the weighted average of the aggregate

30  lifetime limits applicable to such categories.

31  

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 1         2.  In the case of a group health plan, or health

 2  insurance coverage offered in connection with such a plan,

 3  which provides both medical and surgical benefits and mental

 4  health benefits:

 5         a.  If the plan or coverage does not include an annual

 6  limit on substantially all medical and surgical benefits, the

 7  plan or coverage may not impose any annual limit on mental

 8  health benefits.

 9         b.  If the plan or coverage includes an annual limit on

10  substantially all medical and surgical benefits, the plan or

11  coverage must:

12         (I)  Apply that applicable annual limit both to medical

13  and surgical benefits to which it otherwise would apply and to

14  mental health benefits and not distinguish in the application

15  of such limit between such medical and surgical benefits and

16  mental health benefits; or

17         (II)  Not include any annual limit on mental health

18  benefits which is less than the applicable annual limit.

19         c.  For any plan or coverage that is not described in

20  sub-subparagraph a. or sub-subparagraph b. and that includes

21  no or different annual limits on different categories of

22  medical and surgical benefits, the commission department shall

23  establish rules under which sub-subparagraph b. is applied to

24  such plan or coverage with respect to mental health benefits

25  by substituting for the applicable annual limit an average

26  annual limit that is computed taking into account the weighted

27  average of the annual limits applicable to such categories.

28         Section 1169.  Paragraph (d) of subsection (5) and

29  subsection (9) of section 627.6692, Florida Statutes, are

30  amended to read:

31  

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 1         627.6692  Florida Health Insurance Coverage

 2  Continuation Act.--

 3         (5)  CONTINUATION OF COVERAGE UNDER GROUP HEALTH

 4  PLANS.--

 5         (d)1.  A qualified beneficiary must give written notice

 6  to the insurance carrier within 30 days after the occurrence

 7  of a qualifying event.  Unless otherwise specified in the

 8  notice, a notice by any qualified beneficiary constitutes

 9  notice on behalf of all qualified beneficiaries.  The written

10  notice must inform the insurance carrier of the occurrence and

11  type of the qualifying event giving rise to the potential

12  election by a qualified beneficiary of continuation of

13  coverage under the group health plan issued by that insurance

14  carrier, except that in cases where the covered employee has

15  been involuntarily discharged, the nature of such discharge

16  need not be disclosed. The written notice must, at a minimum,

17  identify the employer, the group health plan number, the name

18  and address of all qualified beneficiaries, and such other

19  information required by the insurance carrier under the terms

20  of the group health plan or the commission department by rule,

21  to the extent that such information is known by the qualified

22  beneficiary.

23         2.  Within 14 days after the receipt of written notice

24  under subparagraph 1., the insurance carrier shall send each

25  qualified beneficiary by certified mail an election and

26  premium notice form, approved by the office department, which

27  form must provide for the qualified beneficiary's election or

28  nonelection of continuation of coverage under the group health

29  plan and the applicable premium amount due after the election

30  to continue coverage.  This subparagraph does not require

31  separate mailing of notices to qualified beneficiaries

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 1  residing in the same household, but requires a separate

 2  mailing for each separate household.

 3         (9)  RULES.--The commission department shall adopt

 4  rules establishing standards for the initial notice of rights

 5  and as otherwise necessary to administer this section.

 6         Section 1170.  Paragraph (a) of subsection (3),

 7  paragraphs (c), (d), (e), and (i) of subsection (5),

 8  paragraphs (a) and (b) of subsection (6), paragraphs (b), (c),

 9  and (d) of subsection (8), paragraphs (a) and (b) of

10  subsection (9), subsection (10), paragraphs (b), (c), (d),

11  (e), (g), (h), (j), and (m) of subsection (11), subsection

12  (12), paragraph (i) of subsection (13), paragraph (a) of

13  subsection (15), and subsection (16) of section 627.6699,

14  Florida Statutes, are amended to read:

15         627.6699  Employee Health Care Access Act.--

16         (3)  DEFINITIONS.--As used in this section, the term:

17         (a)  "Actuarial certification" means a written

18  statement, by a member of the American Academy of Actuaries or

19  another person acceptable to the office department, that a

20  small employer carrier is in compliance with subsection (6),

21  based upon the person's examination, including a review of the

22  appropriate records and of the actuarial assumptions and

23  methods used by the carrier in establishing premium rates for

24  applicable health benefit plans.

25         (5)  AVAILABILITY OF COVERAGE.--

26         (c)  Every small employer carrier must, as a condition

27  of transacting business in this state:

28         1.  Beginning July 1, 2000, Offer and issue all small

29  employer health benefit plans on a guaranteed-issue basis to

30  every eligible small employer, with 2 to 50 eligible

31  employees, that elects to be covered under such plan, agrees

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 1  to make the required premium payments, and satisfies the other

 2  provisions of the plan. A rider for additional or increased

 3  benefits may be medically underwritten and may only be added

 4  to the standard health benefit plan.  The increased rate

 5  charged for the additional or increased benefit must be rated

 6  in accordance with this section.

 7         2.  Beginning July 1, 2000, and until July 31, 2001,

 8  offer and issue basic and standard small employer health

 9  benefit plans on a guaranteed-issue basis to every eligible

10  small employer which is eligible for guaranteed renewal, has

11  less than two eligible employees, is not formed primarily for

12  the purpose of buying health insurance, elects to be covered

13  under such plan, agrees to make the required premium payments,

14  and satisfies the other provisions of the plan. A rider for

15  additional or increased benefits may be medically underwritten

16  and may be added only to the standard benefit plan. The

17  increased rate charged for the additional or increased benefit

18  must be rated in accordance with this section. For purposes of

19  this subparagraph, a person, his or her spouse, and his or her

20  dependent children shall constitute a single eligible employee

21  if that person and spouse are employed by the same small

22  employer and either one has a normal work week of less than 25

23  hours.

24         2.3.  Beginning August 1, 2001, Offer and issue basic

25  and standard small employer health benefit plans on a

26  guaranteed-issue basis, during a 31-day open enrollment period

27  of August 1 through August 31 of each year, to every eligible

28  small employer, with fewer than two eligible employees, which

29  small employer is not formed primarily for the purpose of

30  buying health insurance and which elects to be covered under

31  such plan, agrees to make the required premium payments, and

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 1  satisfies the other provisions of the plan. Coverage provided

 2  under this subparagraph shall begin on October 1 of the same

 3  year as the date of enrollment, unless the small employer

 4  carrier and the small employer agree to a different date. A

 5  rider for additional or increased benefits may be medically

 6  underwritten and may only be added to the standard health

 7  benefit plan.  The increased rate charged for the additional

 8  or increased benefit must be rated in accordance with this

 9  section. For purposes of this subparagraph, a person, his or

10  her spouse, and his or her dependent children constitute a

11  single eligible employee if that person and spouse are

12  employed by the same small employer and either that person or

13  his or her spouse has a normal work week of less than 25

14  hours.

15         3.4.  This paragraph does not limit a carrier's ability

16  to offer other health benefit plans to small employers if the

17  standard and basic health benefit plans are offered and

18  rejected.

19         (d)  A small employer carrier must file with the office

20  department, in a format and manner prescribed by the

21  committee, a standard health care plan and a basic health care

22  plan to be used by the carrier.

23         (e)  The office department at any time may, after

24  providing notice and an opportunity for a hearing, disapprove

25  the continued use by the small employer carrier of the

26  standard or basic health benefit plan on the grounds that such

27  plan does not meet the requirements of this section.

28         (i)1.  A small employer carrier need not offer coverage

29  or accept applications pursuant to paragraph (a):

30         a.  To a small employer if the small employer is not

31  physically located in an established geographic service area

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 1  of the small employer carrier, provided such geographic

 2  service area shall not be less than a county;

 3         b.  To an employee if the employee does not work or

 4  reside within an established geographic service area of the

 5  small employer carrier; or

 6         c.  To a small employer group within an area in which

 7  the small employer carrier reasonably anticipates, and

 8  demonstrates to the satisfaction of the office department,

 9  that it cannot, within its network of providers, deliver

10  service adequately to the members of such groups because of

11  obligations to existing group contract holders and enrollees.

12         2.  A small employer carrier that cannot offer coverage

13  pursuant to sub-subparagraph 1.c. may not offer coverage in

14  the applicable area to new cases of employer groups having

15  more than 50 eligible employees or small employer groups until

16  the later of 180 days following each such refusal or the date

17  on which the carrier notifies the office department that it

18  has regained its ability to deliver services to small employer

19  groups.

20         3.a.  A small employer carrier may deny health

21  insurance coverage in the small-group market if the carrier

22  has demonstrated to the office department that:

23         (I)  It does not have the financial reserves necessary

24  to underwrite additional coverage; and

25         (II)  It is applying this sub-subparagraph uniformly to

26  all employers in the small-group market in this state

27  consistent with this section and without regard to the claims

28  experience of those employers and their employees and their

29  dependents or any health-status-related factor that relates to

30  such employees and dependents.

31  

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 1         b.  A small employer carrier, upon denying health

 2  insurance coverage in connection with health benefit plans in

 3  accordance with sub-subparagraph a., may not offer coverage in

 4  connection with group health benefit plans in the small-group

 5  market in this state for a period of 180 days after the date

 6  such coverage is denied or until the insurer has demonstrated

 7  to the office department that the insurer has sufficient

 8  financial reserves to underwrite additional coverage,

 9  whichever is later. The office department may provide for the

10  application of this sub-subparagraph on a

11  service-area-specific basis.

12         4.  Beginning in 1994, The commission department shall,

13  by rule, require each small employer carrier to report, on or

14  before March 1 of each year, its gross annual premiums for all

15  health benefit plans issued to small employers during the

16  previous calendar year, and also to report its gross annual

17  premiums for new, but not renewal, standard and basic health

18  benefit plans subject to this section issued during the

19  previous calendar year. No later than May 1 of each year, the

20  office department shall calculate each carrier's percentage of

21  all small employer group health premiums for the previous

22  calendar year and shall calculate the aggregate gross annual

23  premiums for new, but not renewal, standard and basic health

24  benefit plans for the previous calendar year.

25         (6)  RESTRICTIONS RELATING TO PREMIUM RATES.--

26         (a)  The commission department may, by rule, establish

27  regulations to administer this section and to assure that

28  rating practices used by small employer carriers are

29  consistent with the purpose of this section, including

30  assuring that differences in rates charged for health benefit

31  plans by small employer carriers are reasonable and reflect

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 1  objective differences in plan design, not including

 2  differences due to the nature of the groups assumed to select

 3  particular health benefit plans.

 4         (b)  For all small employer health benefit plans that

 5  are subject to this section and are issued by small employer

 6  carriers on or after January 1, 1994, premium rates for health

 7  benefit plans subject to this section are subject to the

 8  following:

 9         1.  Small employer carriers must use a modified

10  community rating methodology in which the premium for each

11  small employer must be determined solely on the basis of the

12  eligible employee's and eligible dependent's gender, age,

13  family composition, tobacco use, or geographic area as

14  determined under paragraph (5)(j) and in which the premium may

15  be adjusted as permitted by this paragraph.

16         2.  Rating factors related to age, gender, family

17  composition, tobacco use, or geographic location may be

18  developed by each carrier to reflect the carrier's experience.

19  The factors used by carriers are subject to office department

20  review and approval.

21         3.  Small employer carriers may not modify the rate for

22  a small employer for 12 months from the initial issue date or

23  renewal date, unless the composition of the group changes or

24  benefits are changed. However, a small employer carrier may

25  modify the rate one time prior to 12 months after the initial

26  issue date for a small employer who enrolls under a previously

27  issued group policy that has a common anniversary date for all

28  employers covered under the policy if:

29         a.  The carrier discloses to the employer in a clear

30  and conspicuous manner the date of the first renewal and the

31  fact that the premium may increase on or after that date.

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 1         b.  The insurer demonstrates to the office department

 2  that efficiencies in administration are achieved and reflected

 3  in the rates charged to small employers covered under the

 4  policy.

 5         4.  A carrier may issue a group health insurance policy

 6  to a small employer health alliance or other group association

 7  with rates that reflect a premium credit for expense savings

 8  attributable to administrative activities being performed by

 9  the alliance or group association if such expense savings are

10  specifically documented in the insurer's rate filing and are

11  approved by the office department.  Any such credit may not be

12  based on different morbidity assumptions or on any other

13  factor related to the health status or claims experience of

14  any person covered under the policy. Nothing in this

15  subparagraph exempts an alliance or group association from

16  licensure for any activities that require licensure under the

17  insurance code. A carrier issuing a group health insurance

18  policy to a small employer health alliance or other group

19  association shall allow any properly licensed and appointed

20  agent of that carrier to market and sell the small employer

21  health alliance or other group association policy. Such agent

22  shall be paid the usual and customary commission paid to any

23  agent selling the policy.

24         5.  Any adjustments in rates for claims experience,

25  health status, or duration of coverage may not be charged to

26  individual employees or dependents. For a small employer's

27  policy, such adjustments may not result in a rate for the

28  small employer which deviates more than 15 percent from the

29  carrier's approved rate. Any such adjustment must be applied

30  uniformly to the rates charged for all employees and

31  dependents of the small employer. A small employer carrier may

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 1  make an adjustment to a small employer's renewal premium, not

 2  to exceed 10 percent annually, due to the claims experience,

 3  health status, or duration of coverage of the employees or

 4  dependents of the small employer. Semiannually, small group

 5  carriers shall report information on forms adopted by rule by

 6  the commission department, to enable the office department to

 7  monitor the relationship of aggregate adjusted premiums

 8  actually charged policyholders by each carrier to the premiums

 9  that would have been charged by application of the carrier's

10  approved modified community rates. If the aggregate resulting

11  from the application of such adjustment exceeds the premium

12  that would have been charged by application of the approved

13  modified community rate by 5 percent for the current reporting

14  period, the carrier shall limit the application of such

15  adjustments only to minus adjustments beginning not more than

16  60 days after the report is sent to the office department. For

17  any subsequent reporting period, if the total aggregate

18  adjusted premium actually charged does not exceed the premium

19  that would have been charged by application of the approved

20  modified community rate by 5 percent, the carrier may apply

21  both plus and minus adjustments. A small employer carrier may

22  provide a credit to a small employer's premium based on

23  administrative and acquisition expense differences resulting

24  from the size of the group. Group size administrative and

25  acquisition expense factors may be developed by each carrier

26  to reflect the carrier's experience and are subject to office

27  department review and approval.

28         6.  A small employer carrier rating methodology may

29  include separate rating categories for one dependent child,

30  for two dependent children, and for three or more dependent

31  children for family coverage of employees having a spouse and

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 1  dependent children or employees having dependent children

 2  only. A small employer carrier may have fewer, but not

 3  greater, numbers of categories for dependent children than

 4  those specified in this subparagraph.

 5         7.  Small employer carriers may not use a composite

 6  rating methodology to rate a small employer with fewer than 10

 7  employees. For the purposes of this subparagraph, a "composite

 8  rating methodology" means a rating methodology that averages

 9  the impact of the rating factors for age and gender in the

10  premiums charged to all of the employees of a small employer.

11         8.a.  A carrier may separate the experience of small

12  employer groups with less than 2 eligible employees from the

13  experience of small employer groups with 2-50 eligible

14  employees for purposes of determining an alternative modified

15  community rating.

16         b.  If a carrier separates the experience of small

17  employer groups as provided in sub-subparagraph a., the rate

18  to be charged to small employer groups of less than 2 eligible

19  employees may not exceed 150 percent of the rate determined

20  for small employer groups of 2-50 eligible employees. However,

21  the carrier may charge excess losses of the experience pool

22  consisting of small employer groups with less than 2 eligible

23  employees to the experience pool consisting of small employer

24  groups with 2-50 eligible employees so that all losses are

25  allocated and the 150-percent rate limit on the experience

26  pool consisting of small employer groups with less than 2

27  eligible employees is maintained. Notwithstanding s.

28  627.411(1), the rate to be charged to a small employer group

29  of fewer than 2 eligible employees, insured as of July 1,

30  2002, may be up to 125 percent of the rate determined for

31  

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 1  small employer groups of 2-50 eligible employees for the first

 2  annual renewal and 150 percent for subsequent annual renewals.

 3         (8)  MAINTENANCE OF RECORDS.--

 4         (b)  Each small employer carrier must file with the

 5  office department on or before March 15 of each year an

 6  actuarial certification that the carrier is in compliance with

 7  this section and that the rating methods of the carrier are

 8  actuarially sound. The certification must be in a form and

 9  manner and contain the information prescribed by the

10  commission department.  The carrier must retain a copy of the

11  certification at its principal place of business.

12         (c)  A small employer carrier must make the information

13  and documentation described in paragraph (a) available to the

14  office department upon request.  The information constitutes

15  proprietary and trade secret information and may not be

16  disclosed by the office department to persons outside the

17  office department, except as agreed to by the carrier or as

18  ordered by a court of competent jurisdiction.

19         (d)  Each small employer carrier must file with the

20  office department quarterly an enrollment report as directed

21  by the office department.  Such report shall not constitute

22  proprietary or trade secret information.

23         (9)  SMALL EMPLOYER CARRIER'S ELECTION TO BECOME A

24  RISK-ASSUMING CARRIER OR A REINSURING CARRIER.--

25         (a)  A small employer carrier must elect to become

26  either a risk-assuming carrier or a reinsuring carrier. Each

27  small employer carrier must make an initial election, binding

28  through January 1, 1994.  The carrier's initial election must

29  be made no later than October 31, 1992.  By October 31, 1993,

30  all small employer carriers must file a final election, which

31  is binding for 2 years, from January 1, 1994, through December

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 1  31, 1995, after which an election shall be binding for a

 2  period of 5 years.  Any carrier that is not a small employer

 3  carrier on October 31, 1992, and intends to become a small

 4  employer carrier after October 31, 1992, must file its

 5  designation when it files the forms and rates it intends to

 6  use for small employer group health insurance; such

 7  designation shall be binding for 2 years after the date of

 8  approval of the forms and rates, and any subsequent

 9  designation is binding for 5 years.  The office department may

10  permit a carrier to modify its election at any time for good

11  cause shown, after a hearing.

12         (b)  The commission department shall establish an

13  application process for small employer carriers seeking to

14  change their status under this subsection.

15         (10)  ELECTION PROCESS TO BECOME A RISK-ASSUMING

16  CARRIER.--

17         (a)1.  A small employer carrier may become a

18  risk-assuming carrier by filing with the office department a

19  designation of election under subsection (9) in a format and

20  manner prescribed by the commission department.  The office

21  department shall approve the election of a small employer

22  carrier to become a risk-assuming carrier if the office

23  department finds that the carrier is capable of assuming that

24  status pursuant to the criteria set forth in paragraph (b).

25         2.  The office department must approve or disapprove

26  any designation as a risk-assuming carrier within 60 days

27  after filing.

28         (b)  In determining whether to approve an application

29  by a small employer carrier to become a risk-assuming carrier,

30  the office department shall consider:

31  

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 1         1.  The carrier's financial ability to support the

 2  assumption of the risk of small employer groups.

 3         2.  The carrier's history of rating and underwriting

 4  small employer groups.

 5         3.  The carrier's commitment to market fairly to all

 6  small employers in the state or its service area, as

 7  applicable.

 8         4.  The carrier's ability to assume and manage the risk

 9  of enrolling small employer groups without the protection of

10  the reinsurance program provided in subsection (11).

11         (c)  A small employer carrier that becomes a

12  risk-assuming carrier pursuant to this subsection is not

13  subject to the assessment provisions of subsection (11).

14         (d)  The office department shall provide public notice

15  of a small employer carrier's designation of election under

16  subsection (9) to become a risk-assuming carrier and shall

17  provide at least a 21-day period for public comment prior to

18  making a decision on the election.  The office department

19  shall hold a hearing on the election at the request of the

20  carrier.

21         (e)  The office department may rescind the approval

22  granted to a risk-assuming carrier under this subsection if

23  the office department finds that the carrier no longer meets

24  the criteria of paragraph (b).

25         (11)  SMALL EMPLOYER HEALTH REINSURANCE PROGRAM.--

26         (b)1.  The program shall operate subject to the

27  supervision and control of the board.

28         2.  Effective upon this act becoming a law, the board

29  shall consist of the Chief Financial Officer commissioner or

30  his or her designee, who shall serve as the chairperson, and

31  13 additional members who are representatives of carriers and

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 1  insurance agents and are appointed by the Chief Financial

 2  Officer commissioner and serve as follows:

 3         a.  The Chief Financial Officer commissioner shall

 4  include representatives of small employer carriers subject to

 5  assessment under this subsection.  If two or more carriers

 6  elect to be risk-assuming carriers, the membership must

 7  include at least two representatives of risk-assuming

 8  carriers; if one carrier is risk-assuming, one member must be

 9  a representative of such carrier.  At least one member must be

10  a carrier who is subject to the assessments, but is not a

11  small employer carrier.  Subject to such restrictions, at

12  least five members shall be selected from individuals

13  recommended by small employer carriers pursuant to procedures

14  provided by rule of the commission department. Three members

15  shall be selected from a list of health insurance carriers

16  that issue individual health insurance policies. At least two

17  of the three members selected must be reinsuring carriers. Two

18  members shall be selected from a list of insurance agents who

19  are actively engaged in the sale of health insurance.

20         b.  A member appointed under this subparagraph shall

21  serve a term of 4 years and shall continue in office until the

22  member's successor takes office, except that, in order to

23  provide for staggered terms, the Chief Financial Officer

24  commissioner shall designate two of the initial appointees

25  under this subparagraph to serve terms of 2 years and shall

26  designate three of the initial appointees under this

27  subparagraph to serve terms of 3 years.

28         3.  The Chief Financial Officer commissioner may remove

29  a member for cause.

30  

31  

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 1         4.  Vacancies on the board shall be filled in the same

 2  manner as the original appointment for the unexpired portion

 3  of the term.

 4         5.  The Chief Financial Officer commissioner may

 5  require an entity that recommends persons for appointment to

 6  submit additional lists of recommended appointees.

 7         (c)1.  No later than August 15, 1992, The board shall

 8  submit to the office department a plan of operation to assure

 9  the fair, reasonable, and equitable administration of the

10  program.  The board may at any time submit to the office

11  department any amendments to the plan that the board finds to

12  be necessary or suitable.

13         2.  No later than September 15, 1992, The office

14  department shall, after notice and hearing, approve the plan

15  of operation if it determines that the plan submitted by the

16  board is suitable to assure the fair, reasonable, and

17  equitable administration of the program and provides for the

18  sharing of program gains and losses equitably and

19  proportionately in accordance with paragraph (j).

20         3.  The plan of operation, or any amendment thereto,

21  becomes effective upon written approval of the office

22  department.

23         (d)  The plan of operation must, among other things:

24         1.  Establish procedures for handling and accounting

25  for program assets and moneys and for an annual fiscal

26  reporting to the office department.

27         2.  Establish procedures for selecting an administering

28  carrier and set forth the powers and duties of the

29  administering carrier.

30         3.  Establish procedures for reinsuring risks.

31  

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 1         4.  Establish procedures for collecting assessments

 2  from participating carriers to provide for claims reinsured by

 3  the program and for administrative expenses, other than

 4  amounts payable to the administrative carrier, incurred or

 5  estimated to be incurred during the period for which the

 6  assessment is made.

 7         5.  Provide for any additional matters at the

 8  discretion of the board.

 9         (e)  The board shall recommend to the office department

10  market conduct requirements and other requirements for

11  carriers and agents, including requirements relating to:

12         1.  Registration by each carrier with the office

13  department of its intention to be a small employer carrier

14  under this section;

15         2.  Publication by the office department of a list of

16  all small employer carriers, including a requirement

17  applicable to agents and carriers that a health benefit plan

18  may not be sold by a carrier that is not identified as a small

19  employer carrier;

20         3.  The availability of a broadly publicized, toll-free

21  telephone number for access by small employers to information

22  concerning this section;

23         4.  Periodic reports by carriers and agents concerning

24  health benefit plans issued; and

25         5.  Methods concerning periodic demonstration by small

26  employer carriers and agents that they are marketing or

27  issuing health benefit plans to small employers.

28         (g)  A reinsuring carrier may reinsure with the program

29  coverage of an eligible employee of a small employer, or any

30  dependent of such an employee, subject to each of the

31  following provisions:

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 1         1.  With respect to a standard and basic health care

 2  plan, the program must reinsure the level of coverage

 3  provided; and, with respect to any other plan, the program

 4  must reinsure the coverage up to, but not exceeding, the level

 5  of coverage provided under the standard and basic health care

 6  plan.

 7         2.  Except in the case of a late enrollee, a reinsuring

 8  carrier may reinsure an eligible employee or dependent within

 9  60 days after the commencement of the coverage of the small

10  employer. A newly employed eligible employee or dependent of a

11  small employer may be reinsured within 60 days after the

12  commencement of his or her coverage.

13         3.  A small employer carrier may reinsure an entire

14  employer group within 60 days after the commencement of the

15  group's coverage under the plan. The carrier may choose to

16  reinsure newly eligible employees and dependents of the

17  reinsured group pursuant to subparagraph 1.

18         4.  The program may not reimburse a participating

19  carrier with respect to the claims of a reinsured employee or

20  dependent until the carrier has paid incurred claims of at

21  least $5,000 in a calendar year for benefits covered by the

22  program.  In addition, the reinsuring carrier shall be

23  responsible for 10 percent of the next $50,000 and 5 percent

24  of the next $100,000 of incurred claims during a calendar year

25  and the program shall reinsure the remainder.

26         5.  The board annually shall adjust the initial level

27  of claims and the maximum limit to be retained by the carrier

28  to reflect increases in costs and utilization within the

29  standard market for health benefit plans within the state. The

30  adjustment shall not be less than the annual change in the

31  medical component of the "Consumer Price Index for All Urban

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 1  Consumers" of the Bureau of Labor Statistics of the Department

 2  of Labor, unless the board proposes and the office department

 3  approves a lower adjustment factor.

 4         6.  A small employer carrier may terminate reinsurance

 5  for all reinsured employees or dependents on any plan

 6  anniversary.

 7         7.  The premium rate charged for reinsurance by the

 8  program to a health maintenance organization that is approved

 9  by the Secretary of Health and Human Services as a federally

10  qualified health maintenance organization pursuant to 42

11  U.S.C. s. 300e(c)(2)(A) and that, as such, is subject to

12  requirements that limit the amount of risk that may be ceded

13  to the program, which requirements are more restrictive than

14  subparagraph 4., shall be reduced by an amount equal to that

15  portion of the risk, if any, which exceeds the amount set

16  forth in subparagraph 4. which may not be ceded to the

17  program.

18         8.  The board may consider adjustments to the premium

19  rates charged for reinsurance by the program for carriers that

20  use effective cost containment measures, including high-cost

21  case management, as defined by the board.

22         9.  A reinsuring carrier shall apply its

23  case-management and claims-handling techniques, including, but

24  not limited to, utilization review, individual case

25  management, preferred provider provisions, other managed care

26  provisions or methods of operation, consistently with both

27  reinsured business and nonreinsured business.

28         (h)1.  The board, as part of the plan of operation,

29  shall establish a methodology for determining premium rates to

30  be charged by the program for reinsuring small employers and

31  individuals pursuant to this section.  The methodology shall

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 1  include a system for classification of small employers that

 2  reflects the types of case characteristics commonly used by

 3  small employer carriers in the state.  The methodology shall

 4  provide for the development of basic reinsurance premium

 5  rates, which shall be multiplied by the factors set for them

 6  in this paragraph to determine the premium rates for the

 7  program. The basic reinsurance premium rates shall be

 8  established by the board, subject to the approval of the

 9  office department, and shall be set at levels which reasonably

10  approximate gross premiums charged to small employers by small

11  employer carriers for health benefit plans with benefits

12  similar to the standard and basic health benefit plan.  The

13  premium rates set by the board may vary by geographical area,

14  as determined under this section, to reflect differences in

15  cost.  The multiplying factors must be established as follows:

16         a.  The entire group may be reinsured for a rate that

17  is 1.5 times the rate established by the board.

18         b.  An eligible employee or dependent may be reinsured

19  for a rate that is 5 times the rate established by the board.

20         2.  The board periodically shall review the methodology

21  established, including the system of classification and any

22  rating factors, to assure that it reasonably reflects the

23  claims experience of the program.  The board may propose

24  changes to the rates which shall be subject to the approval of

25  the office department.

26         (j)1.  Before March 1 of each calendar year, the board

27  shall determine and report to the office department the

28  program net loss for the previous year, including

29  administrative expenses for that year, and the incurred losses

30  for the year, taking into account investment income and other

31  appropriate gains and losses.

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 1         2.  Any net loss for the year shall be recouped by

 2  assessment of the carriers, as follows:

 3         a.  The operating losses of the program shall be

 4  assessed in the following order subject to the specified

 5  limitations.  The first tier of assessments shall be made

 6  against reinsuring carriers in an amount which shall not

 7  exceed 5 percent of each reinsuring carrier's premiums from

 8  health benefit plans covering small employers.  If such

 9  assessments have been collected and additional moneys are

10  needed, the board shall make a second tier of assessments in

11  an amount which shall not exceed 0.5 percent of each carrier's

12  health benefit plan premiums.  Except as provided in paragraph

13  (n), risk-assuming carriers are exempt from all assessments

14  authorized pursuant to this section.  The amount paid by a

15  reinsuring carrier for the first tier of assessments shall be

16  credited against any additional assessments made.

17         b.  The board shall equitably assess carriers for

18  operating losses of the plan based on market share.  The board

19  shall annually assess each carrier a portion of the operating

20  losses of the plan.  The first tier of assessments shall be

21  determined by multiplying the operating losses by a fraction,

22  the numerator of which equals the reinsuring carrier's earned

23  premium pertaining to direct writings of small employer health

24  benefit plans in the state during the calendar year for which

25  the assessment is levied, and the denominator of which equals

26  the total of all such premiums earned by reinsuring carriers

27  in the state during that calendar year. The second tier of

28  assessments shall be based on the premiums that all carriers,

29  except risk-assuming carriers, earned on all health benefit

30  plans written in this state. The board may levy interim

31  assessments against carriers to ensure the financial ability

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 1  of the plan to cover claims expenses and administrative

 2  expenses paid or estimated to be paid in the operation of the

 3  plan for the calendar year prior to the association's

 4  anticipated receipt of annual assessments for that calendar

 5  year.  Any interim assessment is due and payable within 30

 6  days after receipt by a carrier of the interim assessment

 7  notice. Interim assessment payments shall be credited against

 8  the carrier's annual assessment.  Health benefit plan premiums

 9  and benefits paid by a carrier that are less than an amount

10  determined by the board to justify the cost of collection may

11  not be considered for purposes of determining assessments.

12         c.  Subject to the approval of the office department,

13  the board shall make an adjustment to the assessment formula

14  for reinsuring carriers that are approved as federally

15  qualified health maintenance organizations by the Secretary of

16  Health and Human Services pursuant to 42 U.S.C. s.

17  300e(c)(2)(A) to the extent, if any, that restrictions are

18  placed on them that are not imposed on other small employer

19  carriers.

20         3.  Before March 1 of each year, the board shall

21  determine and file with the office department an estimate of

22  the assessments needed to fund the losses incurred by the

23  program in the previous calendar year.

24         4.  If the board determines that the assessments needed

25  to fund the losses incurred by the program in the previous

26  calendar year will exceed the amount specified in subparagraph

27  2., the board shall evaluate the operation of the program and

28  report its findings, including any recommendations for changes

29  to the plan of operation, to the office department within 90

30  days following the end of the calendar year in which the

31  losses were incurred.  The evaluation shall include an

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 1  estimate of future assessments, the administrative costs of

 2  the program, the appropriateness of the premiums charged and

 3  the level of carrier retention under the program, and the

 4  costs of coverage for small employers. If the board fails to

 5  file a report with the office department within 90 days

 6  following the end of the applicable calendar year, the office

 7  department may evaluate the operations of the program and

 8  implement such amendments to the plan of operation the office

 9  department deems necessary to reduce future losses and

10  assessments.

11         5.  If assessments exceed the amount of the actual

12  losses and administrative expenses of the program, the excess

13  shall be held as interest and used by the board to offset

14  future losses or to reduce program premiums. As used in this

15  paragraph, the term "future losses" includes reserves for

16  incurred but not reported claims.

17         6.  Each carrier's proportion of the assessment shall

18  be determined annually by the board, based on annual

19  statements and other reports considered necessary by the board

20  and filed by the carriers with the board.

21         7.  Provision shall be made in the plan of operation

22  for the imposition of an interest penalty for late payment of

23  an assessment.

24         8.  A carrier may seek, from the office commissioner, a

25  deferment, in whole or in part, from any assessment made by

26  the board.  The office department may defer, in whole or in

27  part, the assessment of a carrier if, in the opinion of the

28  office department, the payment of the assessment would place

29  the carrier in a financially impaired condition.  If an

30  assessment against a carrier is deferred, in whole or in part,

31  the amount by which the assessment is deferred may be assessed

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 1  against the other carriers in a manner consistent with the

 2  basis for assessment set forth in this section. The carrier

 3  receiving such deferment remains liable to the program for the

 4  amount deferred and is prohibited from reinsuring any

 5  individuals or groups in the program if it fails to pay

 6  assessments.

 7         (m)  The board shall monitor compliance with this

 8  section, including the market conduct of small employer

 9  carriers, and shall report to the office department any unfair

10  trade practices and misleading or unfair conduct by a small

11  employer carrier that has been reported to the board by

12  agents, consumers, or any other person. The office department

13  shall investigate all reports and, upon a finding of

14  noncompliance with this section or of unfair or misleading

15  practices, shall take action against the small employer

16  carrier as permitted under the insurance code or chapter 641.

17  The board is not given investigatory or regulatory powers, but

18  must forward all reports of cases or abuse or

19  misrepresentation to the office department.

20         (12)  STANDARD, BASIC, AND LIMITED HEALTH BENEFIT

21  PLANS.--

22         (a)1.  By May 15, 1993, The Chief Financial Officer

23  commissioner shall appoint a health benefit plan committee

24  composed of four representatives of carriers which shall

25  include at least two representatives of HMOs, at least one of

26  which is a staff model HMO, two representatives of agents,

27  four representatives of small employers, and one employee of a

28  small employer.  The carrier members shall be selected from a

29  list of individuals recommended by the board.  The Chief

30  Financial Officer commissioner may require the board to submit

31  additional recommendations of individuals for appointment.

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 1         2.  The plans shall comply with all of the requirements

 2  of this subsection.

 3         3.  The plans must be filed with and approved by the

 4  office department prior to issuance or delivery by any small

 5  employer carrier.

 6         4.  After approval of the revised health benefit plans,

 7  if the office department determines that modifications to a

 8  plan might be appropriate, the Chief Financial Officer

 9  commissioner shall appoint a new health benefit plan committee

10  in the manner provided in subparagraph 1. to submit

11  recommended modifications to the office department for

12  approval.

13         (b)1.  Each small employer carrier issuing new health

14  benefit plans shall offer to any small employer, upon request,

15  a standard health benefit plan and a basic health benefit plan

16  that meets the criteria set forth in this section.

17         2.  For purposes of this subsection, the terms

18  "standard health benefit plan" and "basic health benefit plan"

19  mean policies or contracts that a small employer carrier

20  offers to eligible small employers that contain:

21         a.  An exclusion for services that are not medically

22  necessary or that are not covered preventive health services;

23  and

24         b.  A procedure for preauthorization by the small

25  employer carrier, or its designees.

26         3.  A small employer carrier may include the following

27  managed care provisions in the policy or contract to control

28  costs:

29         a.  A preferred provider arrangement or exclusive

30  provider organization or any combination thereof, in which a

31  small employer carrier enters into a written agreement with

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 1  the provider to provide services at specified levels of

 2  reimbursement or to provide reimbursement to specified

 3  providers. Any such written agreement between a provider and a

 4  small employer carrier must contain a provision under which

 5  the parties agree that the insured individual or covered

 6  member has no obligation to make payment for any medical

 7  service rendered by the provider which is determined not to be

 8  medically necessary.  A carrier may use preferred provider

 9  arrangements or exclusive provider arrangements to the same

10  extent as allowed in group products that are not issued to

11  small employers.

12         b.  A procedure for utilization review by the small

13  employer carrier or its designees.

14  

15  This subparagraph does not prohibit a small employer carrier

16  from including in its policy or contract additional managed

17  care and cost containment provisions, subject to the approval

18  of the office department, which have potential for controlling

19  costs in a manner that does not result in inequitable

20  treatment of insureds or subscribers.  The carrier may use

21  such provisions to the same extent as authorized for group

22  products that are not issued to small employers.

23         4.  The standard health benefit plan shall include:

24         a.  Coverage for inpatient hospitalization;

25         b.  Coverage for outpatient services;

26         c.  Coverage for newborn children pursuant to s.

27  627.6575;

28         d.  Coverage for child care supervision services

29  pursuant to s. 627.6579;

30         e.  Coverage for adopted children upon placement in the

31  residence pursuant to s. 627.6578;

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 1         f.  Coverage for mammograms pursuant to s. 627.6613;

 2         g.  Coverage for handicapped children pursuant to s.

 3  627.6615;

 4         h.  Emergency or urgent care out of the geographic

 5  service area; and

 6         i.  Coverage for services provided by a hospice

 7  licensed under s. 400.602 in cases where such coverage would

 8  be the most appropriate and the most cost-effective method for

 9  treating a covered illness.

10         5.  The standard health benefit plan and the basic

11  health benefit plan may include a schedule of benefit

12  limitations for specified services and procedures.  If the

13  committee develops such a schedule of benefits limitation for

14  the standard health benefit plan or the basic health benefit

15  plan, a small employer carrier offering the plan must offer

16  the employer an option for increasing the benefit schedule

17  amounts by 4 percent annually.

18         6.  The basic health benefit plan shall include all of

19  the benefits specified in subparagraph 4.; however, the basic

20  health benefit plan shall place additional restrictions on the

21  benefits and utilization and may also impose additional cost

22  containment measures.

23         7.  Sections 627.419(2), (3), and (4), 627.6574,

24  627.6612, 627.66121, 627.66122, 627.6616, 627.6618, 627.668,

25  and 627.66911 apply to the standard health benefit plan and to

26  the basic health benefit plan. However, notwithstanding said

27  provisions, the plans may specify limits on the number of

28  authorized treatments, if such limits are reasonable and do

29  not discriminate against any type of provider.

30         8.  Each small employer carrier that provides for

31  inpatient and outpatient services by allopathic hospitals may

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 1  provide as an option of the insured similar inpatient and

 2  outpatient services by hospitals accredited by the American

 3  Osteopathic Association when such services are available and

 4  the osteopathic hospital agrees to provide the service.

 5         (c)  If a small employer rejects, in writing, the

 6  standard health benefit plan and the basic health benefit

 7  plan, the small employer carrier may offer the small employer

 8  a limited benefit policy or contract.

 9         (d)1.  Upon offering coverage under a standard health

10  benefit plan, a basic health benefit plan, or a limited

11  benefit policy or contract for any small employer, the small

12  employer carrier shall provide such employer group with a

13  written statement that contains, at a minimum:

14         a.  An explanation of those mandated benefits and

15  providers that are not covered by the policy or contract;

16         b.  An explanation of the managed care and cost control

17  features of the policy or contract, along with all appropriate

18  mailing addresses and telephone numbers to be used by insureds

19  in seeking information or authorization; and

20         c.  An explanation of the primary and preventive care

21  features of the policy or contract.

22  

23  Such disclosure statement must be presented in a clear and

24  understandable form and format and must be separate from the

25  policy or certificate or evidence of coverage provided to the

26  employer group.

27         2.  Before a small employer carrier issues a standard

28  health benefit plan, a basic health benefit plan, or a limited

29  benefit policy or contract, it must obtain from the

30  prospective policyholder a signed written statement in which

31  the prospective policyholder:

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 1         a.  Certifies as to eligibility for coverage under the

 2  standard health benefit plan, basic health benefit plan, or

 3  limited benefit policy or contract;

 4         b.  Acknowledges the limited nature of the coverage and

 5  an understanding of the managed care and cost control features

 6  of the policy or contract;

 7         c.  Acknowledges that if misrepresentations are made

 8  regarding eligibility for coverage under a standard health

 9  benefit plan, a basic health benefit plan, or a limited

10  benefit policy or contract, the person making such

11  misrepresentations forfeits coverage provided by the policy or

12  contract; and

13         d.  If a limited plan is requested, acknowledges that

14  the prospective policyholder had been offered, at the time of

15  application for the insurance policy or contract, the

16  opportunity to purchase any health benefit plan offered by the

17  carrier and that the prospective policyholder had rejected

18  that coverage.

19  

20  A copy of such written statement shall be provided to the

21  prospective policyholder no later than at the time of delivery

22  of the policy or contract, and the original of such written

23  statement shall be retained in the files of the small employer

24  carrier for the period of time that the policy or contract

25  remains in effect or for 5 years, whichever period is longer.

26         3.  Any material statement made by an applicant for

27  coverage under a health benefit plan which falsely certifies

28  as to the applicant's eligibility for coverage serves as the

29  basis for terminating coverage under the policy or contract.

30         4.  Each marketing communication that is intended to be

31  used in the marketing of a health benefit plan in this state

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 1  must be submitted for review by the office department prior to

 2  use and must contain the disclosures stated in this

 3  subsection.

 4         (e)  A small employer carrier may not use any policy,

 5  contract, form, or rate under this section, including

 6  applications, enrollment forms, policies, contracts,

 7  certificates, evidences of coverage, riders, amendments,

 8  endorsements, and disclosure forms, until the insurer has

 9  filed it with the office department and the office department

10  has approved it under ss. 627.410 and 627.411 and this

11  section.

12         (13)  STANDARDS TO ASSURE FAIR MARKETING.--

13         (i)  The commission department may establish

14  regulations setting forth additional standards to provide for

15  the fair marketing and broad availability of health benefit

16  plans to small employers in this state.

17         (15)  APPLICABILITY OF OTHER STATE LAWS.--

18         (a)  Except as expressly provided in this section, a

19  law requiring coverage for a specific health care service or

20  benefit, or a law requiring reimbursement, utilization, or

21  consideration of a specific category of licensed health care

22  practitioner, does not apply to a standard or basic health

23  benefit plan policy or contract or a limited benefit policy or

24  contract offered or delivered to a small employer unless that

25  law is made expressly applicable to such policies or

26  contracts. A law restricting or limiting deductibles,

27  coinsurance, copayments, or annual or lifetime maximum

28  payments does not apply to any health plan policy, including a

29  standard or basic health benefit plan policy or contract,

30  offered or delivered to a small employer unless such law is

31  made expressly applicable to such policy or contract. However,

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 1  every small employer carrier must offer to eligible small

 2  employers the standard benefit plan and the basic benefit

 3  plan, as required by subsection (5), as such plans have been

 4  approved by the office department pursuant to subsection (12).

 5         (16)  RULEMAKING AUTHORITY.--The commission department

 6  may adopt rules to administer this section, including rules

 7  governing compliance by small employer carriers and small

 8  employers.

 9         Section 1171.  Subsection (2) of section 627.673,

10  Florida Statutes, is amended to read:

11         627.673  Designation as Medicare supplement policy;

12  penalties for violations.--

13         (2)  A violation of this part is punishable under s.

14  624.4211.  In addition, the office department may require

15  insurers violating this part to cease marketing any Medicare

16  supplement policy in this state which is related directly or

17  indirectly to a violation of this part, or the office

18  department may require the insurer to take any action

19  necessary to comply with this part.

20         Section 1172.  Section 627.6735, Florida Statutes, is

21  amended to read:

22         627.6735  Order to discontinue certain advertising.--An

23  insurer must file with the office department all

24  advertisements for Medicare supplement policies pursuant to

25  rules adopted by the commission department.  If, in the

26  opinion of the office department, any advertisement by a

27  Medicare supplement policy insurer violates any of the

28  provisions of part IX of chapter 626 or any rule of the

29  commission department, the office department may enter an

30  immediate order requiring that the use of the advertisement be

31  discontinued. If requested by the insurer, the office

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 1  department shall conduct a hearing within 10 days of the entry

 2  of such order.  If, after the hearing or by agreement with the

 3  insurer, a final determination is made that the advertising

 4  was in fact violative of any provision of part IX of chapter

 5  626 or of any rule of the commission department, the office

 6  department may, in lieu of revocation of the certificate of

 7  authority, require the publication of a corrective

 8  advertisement; impose an administrative penalty of up to

 9  $10,000; and, in the case of an initial solicitation, require

10  that the insurer, prior to accepting any application received

11  in response to the advertisement, provide an acceptable

12  clarification of the advertisement to each individual

13  applicant.

14         Section 1173.  Section 627.674, Florida Statutes, is

15  amended to read:

16         627.674  Minimum standards; filing requirements.--

17         (1)  An insurance policy or subscriber contract may not

18  be advertised, solicited, or issued for delivery in this state

19  as a Medicare supplement policy unless it meets the minimum

20  standards adopted under this section.  The minimum standards

21  do not preclude other provisions or benefits which are not

22  inconsistent with the minimum standards.

23         (2)(a)  The commission department must adopt rules

24  establishing minimum standards for Medicare supplement

25  policies that, taken together with the requirements of this

26  part, are no less comprehensive or beneficial to persons

27  insured or covered under Medicare supplement policies issued,

28  delivered, or issued for delivery in this state, including

29  certificates under group or blanket policies issued,

30  delivered, or issued for delivery in this state, than the

31  standards provided in 42 U.S.C. s. 1395ss, or the most recent

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 1  version of the NAIC Model Regulation To Implement the NAIC

 2  Medicare Supplement Insurance Minimum Standards Model Act

 3  adopted by the National Association of Insurance

 4  Commissioners.

 5         (b)  The rules must establish specific standards,

 6  including standards of full and fair disclosure, that set

 7  forth the manner, content, and required disclosure for the

 8  sale of group, blanket, franchise, and individual Medicare

 9  supplement policies and Medicare supplement subscriber

10  contracts of dental service plans and nonprofit health care

11  services plans.  The standards may cover, but not be limited

12  to:

13         1.  Terms of renewability.

14         2.  Initial and subsequent conditions of eligibility.

15         3.  Nonduplication of coverage.

16         4.  Probationary periods.

17         5.  Benefit limitations, exceptions, and reductions.

18         6.  Elimination periods.

19         7.  Requirements for replacement coverage.

20         8.  Recurrent conditions.

21         9.  Definitions of terms.

22         10.  Application forms.

23         (c)  The commission department may adopt rules that

24  specify prohibited policies or policy provisions, not

25  otherwise specifically authorized by statute, which in the

26  opinion of the office department are unjust, unfair, or

27  unfairly discriminatory to the policyholder, the person

28  insured under the policy, or the beneficiary.

29         (d)  For policies issued on or after January 1, 1991,

30  the commission department may adopt rules to establish minimum

31  policy standards to authorize the types of policies specified

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 1  by 42 U.S.C. s. 1395ss(p)(2)(C) and any optional benefits to

 2  facilitate policy comparisons.

 3         (3)  A policy may not be filed with the office

 4  department as a Medicare supplement policy unless the policy

 5  meets or exceeds the requirements of 42 U.S.C. s. 1395ss, or

 6  the most recent version of the NAIC Medicare Supplement

 7  Insurance Minimum Standards Model Act, adopted by the National

 8  Association of Insurance Commissioners.

 9         (4)  A policy filed with the office department as a

10  Medicare supplement policy must:

11         (a)  Have a definition of "Medicare eligible expense"

12  that is not more restrictive than health care expenses of the

13  kinds covered by Medicare or to the extent recognized as

14  reasonable by Medicare.  Payment of benefits by insurers for

15  Medicare eligible expenses may be conditioned upon the same or

16  less restrictive payment conditions, including determinations

17  of medical necessity, as apply to Medicare claims.

18         (b)  Provide that benefits designed to cover

19  cost-sharing amounts under Medicare will be changed

20  automatically to coincide with any changes in the applicable

21  Medicare deductible amount and copayment percentage factor.

22  Premiums may be modified to correspond with such changes,

23  subject to prior approval by the office department.

24         (c)  Be written in simplified language, be easily

25  understood by purchasers, and otherwise comply with s.

26  627.602.

27         (d)  Contain a prominently displayed no-loss

28  cancellation clause enabling the applicant to return the

29  policy within 30 days after receiving the policy, or the

30  certificate issued thereunder, with return in full of any

31  premium paid.  The insurer must, in a timely manner, pay a

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 1  refund under this paragraph directly to the individual who

 2  paid the premium.

 3         (e)  Contain a prominently displayed notice of any

 4  coordination-of-benefits clause which might in any way

 5  restrict payment under the policy.

 6         (f)1.  Be accompanied by a copy of the Medicare

 7  Supplement Buyer's Guide developed jointly by the National

 8  Association of Insurance Commissioners and the Health Care

 9  Financing Administration of the United States Department of

10  Health and Human Services.

11         2.  A policy referred to in subparagraph (g)4. that

12  does not qualify as a Medicare supplement policy under this

13  part must also be accompanied by the buyer's guide pursuant to

14  this paragraph.

15         3.  Except in the case of a direct response insurer,

16  delivery of the buyer's guide shall be made at the time of

17  application, and acknowledgment of receipt or certification of

18  delivery of the buyer's guide shall be provided to the

19  insurer. Direct response insurers shall deliver the buyer's

20  guide upon request, but not later than at the time the policy

21  is delivered.

22         (g)1.  Be accompanied by an outline of coverage in the

23  form prescribed by the National Association of Insurance

24  Commissioners in the NAIC Model Regulation To Implement the

25  NAIC Medicare Supplement Insurance Minimum Standards Model

26  Act, adopted by the National Association of Insurance

27  Commissioners on July 31, 1991, and as prescribed in s.

28  627.6743.

29         2.  The outline shall be delivered to the applicant at

30  the time application is made, and, except for the direct

31  response policy, acknowledgment of receipt or certification of

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 1  delivery of the outline of coverage shall be provided to the

 2  insurer.

 3         3.  If the policy is issued on a basis which would

 4  require revision of the outline, a substitute outline of

 5  coverage properly describing the policy, contract, or group

 6  certificate must accompany the policy, when it is delivered,

 7  and contain the following statement, in no less than 12-point

 8  type, immediately above the company name:  "NOTICE:  Read this

 9  outline of coverage carefully.  It is not identical to the

10  outline of coverage provided upon application, and the

11  coverage originally applied for has not been issued."

12         4.  The following language must be printed on or

13  attached to the first page of the outline of coverage

14  delivered in conjunction with an individual policy of hospital

15  confinement insurance, indemnity insurance, specified disease

16  insurance, specified accident insurance, supplemental health

17  insurance other than Medicare supplement insurance, or

18  nonconventional health insurance coverage, as defined by law

19  in this state, to a person eligible for Medicare: "This policy

20  IS NOT A MEDICARE SUPPLEMENT policy.  If you are eligible for

21  Medicare, review the Medicare Supplement Buyer's Guide

22  available from the company."

23         (5)  A Medicare supplement policy may not contain

24  benefits which duplicate benefits provided by Medicare.

25         Section 1174.  Subsection (5) of section 627.6741,

26  Florida Statutes, is amended to read:

27         627.6741  Issuance, cancellation, nonrenewal, and

28  replacement.--

29         (5)  The commission department shall by rule prescribe

30  standards relating to the guaranteed issue of coverage,

31  without exclusions for preexisting conditions, for

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 1  continuously covered individuals consistent with the

 2  provisions of 42 U.S.C. s. 1395ss(s)(3).

 3         Section 1175.  Subsection (1) of section 627.6742,

 4  Florida Statutes, is amended to read:

 5         627.6742  Permitted compensation arrangements.--

 6         (1)  The commission department shall adopt rules

 7  governing the permitted compensation arrangements between

 8  insurers and agents with respect to Medicare supplement

 9  policies.

10         Section 1176.  Subsection (1) of section 627.6744,

11  Florida Statutes, is amended to read:

12         627.6744  Recommended purchase and excessive

13  insurance.--

14         (1)  Medicare supplement insurance may not be issued or

15  sold, whether directly, through the mail, or otherwise, to an

16  individual unless the issuer or seller obtains from the

17  individual, as a part of the application, a written statement

18  signed by the individual stating what Medicare supplement

19  policies the individual has, from what source, and whether the

20  individual has applied for and been determined to be entitled

21  to Medicaid.  The written statement must be accompanied by a

22  written acknowledgment, signed by the seller, of the request

23  for and receipt of the statement. The written acknowledgment

24  does not constitute a verification or affirmation by the

25  seller of the truth of any information supplied by the

26  individual in the written statement.  The written statement

27  shall be on forms prescribed by the commission department in

28  accordance with the Omnibus Budget Reconciliation Act of 1990

29  (Pub. L. No. 101-508).

30         Section 1177.  Subsections (4) and (7) of section

31  627.6745, Florida Statutes, are amended to read:

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 1         627.6745  Loss ratio standards; public rate hearings.--

 2         (4)  Each insurer providing Medicare supplement

 3  insurance to residents of this state shall annually submit to

 4  the office department information on actual loss ratios on

 5  forms prescribed by the National Association of Insurance

 6  Commissioners pursuant to the Omnibus Budget Reconciliation

 7  Act of 1990 (Pub. L. No. 101-508).

 8         (7)  The commission department shall adopt a written

 9  policy statement regarding the holding of public hearings

10  prior to approval of any premium increases for Medicare

11  supplement insurance policies.

12         Section 1178.  Section 627.678, Florida Statutes, is

13  amended to read:

14         627.678  Rules.--

15         (1)  For the effective protection of the public

16  interest, the commission department shall have full power and

17  authority to adopt, promulgate, and the office shall enforce,

18  separate rules pertaining to issuance and use of each type of

19  credit insurance defined in s. 627.677.

20         (2)  Rules made pursuant to this section shall be

21  principally designed, and shall be promulgated with the

22  purpose of protecting the borrower from excessive charges by

23  or collected through the lender for insurance in relation to

24  the amount of the loan, to avoid duplication or overlapping of

25  insurance coverage and to avoid loss of the borrower's funds

26  by short-rate cancellation or termination of such insurance.

27  However, nothing in such rules shall be construed to authorize

28  the department, commission, or office to prohibit operation of

29  normal dividend distributions under participating insurance

30  contracts.

31  

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 1         Section 1179.  Subsections (1) and (2) of section

 2  627.6785, Florida Statutes, are amended to read:

 3         627.6785  Filing of rates with department.--

 4         (1)  Credit disability and credit life insurers shall

 5  file with the office department a copy of all rates and any

 6  rate changes used in this state.

 7         (2)  No credit disability rate and no credit life rate

 8  shall exceed the maximum allowable rate promulgated by the

 9  commission department.

10         Section 1180.  Section 627.682, Florida Statutes, is

11  amended to read:

12         627.682  Filing, approval of forms.--All forms of

13  policies, certificates of insurance, statements of insurance,

14  applications for insurance, binders, endorsements, and riders

15  of credit life or disability insurance delivered or issued for

16  delivery in this state shall be filed with and approved by the

17  office department before use as provided in ss. 627.410 and

18  627.411.  In addition to grounds as specified in s. 627.411,

19  the office department, upon compliance with the procedures set

20  forth in s. 627.410, shall disapprove any such form and may

21  withdraw any previous approval thereof if the benefits

22  provided therein are not reasonable in relation to the

23  premiums charged, or if it contains provisions which are

24  unjust, unfair, inequitable, misleading, or deceptive or which

25  encourage misrepresentation of such policy.

26         Section 1181.  Section 627.6844, Florida Statutes, is

27  amended to read:

28         627.6844  Replacement rules.--Group-to-group

29  consolidations are exempt from any rule of the commission

30  department relating to the replacement of existing life or

31  health insurance.  Sections 627.6841-627.6845 do not create an

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 1  exemption from any such rule for consolidations that involve

 2  individual policies.

 3         Section 1182.  Section 627.6845, Florida Statutes, is

 4  amended to read:

 5         627.6845  Policy forms used in connection with

 6  consolidations.--A policy or group certificate of credit

 7  insurance used in connection with any consolidation, or an

 8  application, endorsement, or rider which becomes a part of any

 9  such policy or certificate, may not be issued or delivered in

10  this state until a copy of the form has been filed with and

11  approved by the office department pursuant to s. 627.682.

12         Section 1183.  Subsection (2), paragraph (b) of

13  subsection (3), paragraph (d) of subsection (5), and

14  subsections (6) and (8) of section 627.701, Florida Statutes,

15  are amended to read:

16         627.701  Liability of insureds; coinsurance;

17  deductibles.--

18         (2)  Unless the office department determines that the

19  deductible provision is clear and unambiguous, a property

20  insurer may not issue an insurance policy or contract covering

21  real property in this state which contains a deductible

22  provision that:

23         (a)  Applies solely to hurricane losses.

24         (b)  States the deductible as a percentage rather than

25  as a specific amount of money.

26         (3)

27         (b)1.  Except as otherwise provided in this paragraph,

28  prior to issuing a personal lines residential property

29  insurance policy on or after April 1, 1996, or prior to the

30  first renewal of a residential property insurance policy on or

31  after April 1, 1996, the insurer must offer alternative

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 1  deductible amounts applicable to hurricane or wind losses

 2  equal to $500 and 2 percent of the policy dwelling limits,

 3  unless the 2 percent deductible is less than $500. The written

 4  notice of the offer shall specify the hurricane or wind

 5  deductible to be applied in the event that the applicant or

 6  policyholder fails to affirmatively choose a hurricane

 7  deductible. The insurer must provide such policyholder with

 8  notice of the availability of the deductible amounts specified

 9  in this paragraph in a form approved specified by the office

10  department in conjunction with each renewal of the policy. The

11  failure to provide such notice constitutes a violation of this

12  code but does not affect the coverage provided under the

13  policy.

14         2.  This paragraph does not apply with respect to a

15  deductible program lawfully in effect on June 14, 1995, or to

16  any similar deductible program, if the deductible program

17  requires a minimum deductible amount of no less than 2 percent

18  of the policy limits.

19         3.  With respect to a policy covering a risk with

20  dwelling limits of at least $100,000, but less than $250,000,

21  the insurer may, in lieu of offering a policy with a $500

22  hurricane or wind deductible as required by subparagraph 1.,

23  offer a policy that the insurer guarantees it will not

24  nonrenew for reasons of reducing hurricane loss for one

25  renewal period and that contains up to a 2 percent hurricane

26  or wind deductible as required by subparagraph 1.

27         4.  With respect to a policy covering a risk with

28  dwelling limits of $250,000 or more, the insurer need not

29  offer the $500 hurricane or wind deductible as required by

30  subparagraph 1., but must, except as otherwise provided in

31  

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 1  this subsection, offer the 2 percent hurricane or wind

 2  deductible as required by subparagraph 1.

 3         (5)

 4         (d)  The office department shall draft and formally

 5  propose as a rule the form for the certificate of security no

 6  later than July 1, 1996. The certificate of security may be

 7  issued in any of the following circumstances:

 8         1.  A mortgage lender or other financial institution

 9  may issue a certificate of security after granting the

10  applicant a line of credit, secured by equity in real property

11  or other reasonable security, which line of credit may be

12  drawn on only to pay for the deductible portion of insured

13  construction or reconstruction after a hurricane loss. In the

14  sole discretion of the mortgage lender or other financial

15  institution, the line of credit may be issued to an applicant

16  on an unsecured basis.

17         2.  A licensed insurance agent may issue a certificate

18  of security after obtaining for an applicant a line of credit,

19  secured by equity in real property or other reasonable

20  security, which line of credit may be drawn on only to pay for

21  the deductible portion of insured construction or

22  reconstruction after a hurricane loss. The Florida Hurricane

23  Catastrophe Fund shall negotiate agreements creating a

24  financing consortium to serve as an additional source of lines

25  of credit to secure deductibles. Any licensed insurance agent

26  may act as the agent of such consortium.

27         3.  Any person qualified to act as a trustee for any

28  purpose may issue a certificate of security secured by a

29  pledge of assets, with the restriction that the assets may be

30  drawn on only to pay for the deductible portion of insured

31  construction or reconstruction after a hurricane loss.

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 1         4.  Any insurer, including any admitted insurer or any

 2  surplus lines insurer, may issue a certificate of security

 3  after issuing the applicant a policy of supplemental insurance

 4  that will pay for 100 percent of the deductible portion of

 5  insured construction or reconstruction after a hurricane loss.

 6         5.  Any other method approved by the office department

 7  upon finding that such other method provides a similar level

 8  of security as the methods specified in this paragraph and

 9  that such other method has no negative impact on residential

10  property insurance catastrophic capacity. The legislative

11  intent of this subparagraph is to provide the flexibility

12  needed to achieve the public policy of expanding property

13  insurance capacity while improving the affordability of

14  property insurance.

15         (6)  Prior to issuing a personal lines residential

16  property insurance policy on or after April 1, 1997, or prior

17  to the first renewal of a residential property insurance

18  policy on or after April 1, 1997, the insurer must offer a

19  deductible equal to $500 applicable to losses from perils

20  other than hurricane. The insurer must provide the

21  policyholder with notice of the availability of the deductible

22  specified in this subsection in a form approved specified by

23  the office department at least once every 3 years. The failure

24  to provide such notice constitutes a violation of this code

25  but does not affect the coverage provided under the policy. An

26  insurer may require a higher deductible only as part of a

27  deductible program lawfully in effect on June 1, 1996, or as

28  part of a similar deductible program.

29         (8)  Notwithstanding the other provisions of this

30  section or of other law, but only as to hurricane coverage as

31  defined in s. 627.4025 for commercial lines residential

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 1  coverages, an insurer may offer a deductible in an amount not

 2  exceeding 5 percent of the insured value with respect to a

 3  condominium association or cooperative association policy, or

 4  in an amount not exceeding 10 percent of the insured value

 5  with respect to any other commercial lines residential policy,

 6  if, at the time of such offer and at each renewal, the insurer

 7  also offers to the policyholder a deductible in the amount of

 8  3 percent of the insured value. Nothing in this subsection

 9  prohibits any deductible otherwise authorized by this section.

10  All forms by which the offers authorized in this subsection

11  are made or required to be made shall be on forms that are

12  adopted or approved by the commission or office department.

13         Section 1184.  Subsection (2) of section 627.7011,

14  Florida Statutes, is amended to read:

15         627.7011  Homeowners' policies; offer of replacement

16  cost coverage and law and ordinance coverage.--

17         (2)  Unless the insurer obtains the policyholder's

18  written refusal of the policies or endorsements specified in

19  subsection (1), any policy covering the dwelling is deemed to

20  include the coverage specified in paragraph (1)(b). The

21  rejection or selection of alternative coverage shall be made

22  on a form approved by the office department. The form shall

23  fully advise the applicant of the nature of the coverage being

24  rejected. If this form is signed by a named insured, it will

25  be conclusively presumed that there was an informed, knowing

26  rejection of the coverage or election of the alternative

27  coverage on behalf of all insureds. Unless the policyholder

28  requests in writing the coverage specified in this section, it

29  need not be provided in or supplemental to any other policy

30  that renews, insures, extends, changes, supersedes, or

31  replaces an existing policy when the policyholder has rejected

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 1  the coverage specified in this section or has selected

 2  alternative coverage. The insurer must provide such

 3  policyholder with notice of the availability of such coverage

 4  in a form approved specified by the office department at least

 5  once every 3 years. The failure to provide such notice

 6  constitutes a violation of this code, but does not affect the

 7  coverage provided under the policy.

 8         Section 1185.  Section 627.7012, Florida Statutes, is

 9  amended to read:

10         627.7012  Pools of insurance adjusters.--The Commission

11  Department of Insurance may, by rule, establish a pool of

12  qualified insurance adjusters. The rules must provide that, if

13  a hurricane occurs or an emergency is declared, the office

14  department may assign members of the pool to the affected area

15  and that an insurer may request that a member of the pool

16  adjust claims in the assigned area. The rules may not require

17  that an insurer use those adjusters assigned by the office

18  department.

19         Section 1186.  Section 627.7015, Florida Statutes, is

20  amended to read:

21         627.7015  Alternative procedure for resolution of

22  disputed property insurance claims.--

23         (1)  PURPOSE AND SCOPE.--This section sets forth a

24  nonadversarial alternative dispute resolution procedure for a

25  mediated claim resolution conference prompted by the need for

26  effective, fair, and timely handling of property insurance

27  claims. There is a particular need for an informal,

28  nonthreatening forum for helping parties who elect this

29  procedure to resolve their claims disputes because most

30  homeowner's insurance policies obligate insureds to

31  participate in a potentially expensive and time-consuming

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 1  adversarial appraisal process prior to litigation. The

 2  procedure set forth in this section is designed to bring the

 3  parties together for a mediated claims settlement conference

 4  without any of the trappings or drawbacks of an adversarial

 5  process. Before resorting to these procedures, insureds and

 6  insurers are encouraged to resolve claims as quickly and

 7  fairly as possible. This section is available with respect to

 8  claims under personal lines policies for all claimants and

 9  insurers prior to commencing the appraisal process, or

10  commencing litigation. If requested by the insured,

11  participation by legal counsel shall be permitted. Mediation

12  under this section is also available to litigants referred to

13  the department by a county court or circuit court. This

14  section does not apply to commercial coverages, to private

15  passenger motor vehicle insurance coverages, or to disputes

16  relating to liability coverages in policies of property

17  insurance.

18         (2)  At the time a first-party claim within the scope

19  of this section is filed, the insurer shall notify all

20  first-party claimants of their right to participate in the

21  mediation program under this section. The department shall

22  prepare a consumer information pamphlet for distribution to

23  persons participating in mediation under this section.

24         (3)  The costs of mediation shall be reasonable, and

25  the insurer shall bear all of the cost of conducting mediation

26  conferences, except as otherwise provided in this section. If

27  an insured fails to appear at the conference, the conference

28  shall be rescheduled upon the insured's payment of the costs

29  of a rescheduled conference. If the insurer fails to appear at

30  the conference, the insurer shall pay the insured's actual

31  cash expenses incurred in attending the conference if the

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 1  insurer's failure to attend was not due to a good cause

 2  acceptable to the department. An insurer will be deemed to

 3  have failed to appear if the insurer's representative lacks

 4  authority to settle the full value of the claim. The insurer

 5  shall incur an additional fee for a rescheduled conference

 6  necessitated by the insurer's failure to appear at a scheduled

 7  conference. The fees assessed by the administrator shall

 8  include a charge necessary to defray the expenses of the

 9  department related to its duties under this section and shall

10  be deposited in the Insurance Commissioner's Regulatory Trust

11  Fund.

12         (4)  The department shall adopt by rule a property

13  insurance mediation program to be administered by the

14  department or its designee. The department may also adopt

15  special rules which are applicable in cases of an emergency

16  within the state. The rules shall be modeled after practices

17  and procedures set forth in mediation rules of procedure

18  adopted by the Supreme Court. The rules shall provide for:

19         (a)  Reasonable requirement for processing and

20  scheduling of requests for mediation.

21         (b)  Qualifications of mediators as provided in s.

22  627.745 and in the Florida Rules of Certified and Court

23  Appointed Mediators, and for such other individuals as are

24  qualified by education, training, or experience as the

25  department determines to be appropriate.

26         (c)  Provisions governing who may attend mediation

27  conferences.

28         (d)  Selection of mediators.

29         (e)  Criteria for the conduct of mediation conferences.

30         (f)  Right to legal counsel.

31  

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 1         (5)  All statements made and documents produced at a

 2  mediation conference shall be deemed to be settlement

 3  negotiations in anticipation of litigation within the scope of

 4  s. 90.408. All parties to the mediation must negotiate in good

 5  faith and must have the authority to immediately settle the

 6  claim. Mediators are deemed to be agents of the department and

 7  shall have the immunity from suit provided in s. 44.107.

 8         (6)  Mediation is nonbinding; however, if a written

 9  settlement is reached, the insured has 3 business days within

10  which the insured may rescind the settlement unless the

11  insured has cashed or deposited any check or draft disbursed

12  to the insured for the disputed matters as a result of the

13  conference. If a settlement agreement is reached and is not

14  rescinded, it shall be binding and act as a release of all

15  specific claims that were presented in that mediation

16  conference.

17         (7)  If the insurer requests the mediation, and the

18  mediation results are rejected by either party, the insured

19  shall not be required to submit to or participate in any

20  contractual loss appraisal process of the property loss damage

21  as a precondition to legal action for breach of contract

22  against the insurer for its failure to pay the policyholder's

23  claims covered by the policy.

24         (8)  The department may designate an entity or person

25  to serve as administrator to carry out any of the provisions

26  of this section and may take this action by means of a written

27  contract or agreement.

28         Section 1187.  Section 627.7017, Florida Statutes, is

29  amended to read:

30         627.7017  Hurricane loss mitigation projects.--In

31  addition to any other hurricane loss mitigation activities

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 1  authorized or required by law, the office department may

 2  contract with public or private entities for hurricane loss

 3  mitigation projects.

 4         Section 1188.  Subsection (6) of section 627.702,

 5  Florida Statutes, is amended to read:

 6         627.702  Valued policy law.--

 7         (6)  With regard to mobile homes included in subsection

 8  (1), any total loss shall be adjusted on the basis of the

 9  amount of money for which such property was insured as

10  specified in the policy, whether on an actual cash value

11  basis, replacement cost basis, or stated amount, and for which

12  a premium has been charged and paid only if the insured has

13  elected to purchase such coverage at the inception of the

14  policy.  However, when coverage is written for a mobile home

15  on any basis other than stated value, a complete disclosure of

16  the relative cost between that policy and the stated value

17  policy shall be made to the insured on a form and in a format

18  approved by the office department. Such forms shall disclose

19  and describe the differences between the types of policies and

20  shall be signed by the insured.  Copies shall be maintained in

21  the insurer's file, and a copy shall be made available to the

22  insured.  Each insurer licensed to write insurance covering

23  mobile homes shall make such stated value coverage available

24  at the option of the insured.

25         Section 1189.  Subsection (4) of section 627.706,

26  Florida Statutes, is amended to read:

27         627.706  Sinkhole insurance.--

28         (4)  Every insurer authorized to transact property

29  insurance in this state shall make a proper filing with the

30  office department for the purpose of extending the appropriate

31  

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 1  forms of property insurance to include coverage for insurable

 2  sinkhole losses.

 3         Section 1190.  Subsections (1), (5), and (9) of section

 4  627.727, Florida Statutes, are amended to read:

 5         627.727  Motor vehicle insurance; uninsured and

 6  underinsured vehicle coverage; insolvent insurer protection.--

 7         (1)  No motor vehicle liability insurance policy which

 8  provides bodily injury liability coverage shall be delivered

 9  or issued for delivery in this state with respect to any

10  specifically insured or identified motor vehicle registered or

11  principally garaged in this state unless uninsured motor

12  vehicle coverage is provided therein or supplemental thereto

13  for the protection of persons insured thereunder who are

14  legally entitled to recover damages from owners or operators

15  of uninsured motor vehicles because of bodily injury,

16  sickness, or disease, including death, resulting therefrom.

17  However, the coverage required under this section is not

18  applicable when, or to the extent that, an insured named in

19  the policy makes a written rejection of the coverage on behalf

20  of all insureds under the policy.  When a motor vehicle is

21  leased for a period of 1 year or longer and the lessor of such

22  vehicle, by the terms of the lease contract, provides

23  liability coverage on the leased vehicle, the lessee of such

24  vehicle shall have the sole privilege to reject uninsured

25  motorist coverage or to select lower limits than the bodily

26  injury liability limits, regardless of whether the lessor is

27  qualified as a self-insurer pursuant to s. 324.171.  Unless an

28  insured, or lessee having the privilege of rejecting uninsured

29  motorist coverage, requests such coverage or requests higher

30  uninsured motorist limits in writing, the coverage or such

31  higher uninsured motorist limits need not be provided in or

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 1  supplemental to any other policy which renews, extends,

 2  changes, supersedes, or replaces an existing policy with the

 3  same bodily injury liability limits when an insured or lessee

 4  had rejected the coverage.  When an insured or lessee has

 5  initially selected limits of uninsured motorist coverage lower

 6  than her or his bodily injury liability limits, higher limits

 7  of uninsured motorist coverage need not be provided in or

 8  supplemental to any other policy which renews, extends,

 9  changes, supersedes, or replaces an existing policy with the

10  same bodily injury liability limits unless an insured requests

11  higher uninsured motorist coverage in writing. The rejection

12  or selection of lower limits shall be made on a form approved

13  by the office Insurance Commissioner.  The form shall fully

14  advise the applicant of the nature of the coverage and shall

15  state that the coverage is equal to bodily injury liability

16  limits unless lower limits are requested or the coverage is

17  rejected.  The heading of the form shall be in 12-point bold

18  type and shall state: "You are electing not to purchase

19  certain valuable coverage which protects you and your family

20  or you are purchasing uninsured motorist limits less than your

21  bodily injury liability limits when you sign this form.

22  Please read carefully."  If this form is signed by a named

23  insured, it will be conclusively presumed that there was an

24  informed, knowing rejection of coverage or election of lower

25  limits on behalf of all insureds.  The insurer shall notify

26  the named insured at least annually of her or his options as

27  to the coverage required by this section.  Such notice shall

28  be part of, and attached to, the notice of premium, shall

29  provide for a means to allow the insured to request such

30  coverage, and shall be given in a manner approved by the

31  office department.  Receipt of this notice does not constitute

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 1  an affirmative waiver of the insured's right to uninsured

 2  motorist coverage where the insured has not signed a selection

 3  or rejection form.  The coverage described under this section

 4  shall be over and above, but shall not duplicate, the benefits

 5  available to an insured under any workers' compensation law,

 6  personal injury protection benefits, disability benefits law,

 7  or similar law; under any automobile medical expense coverage;

 8  under any motor vehicle liability insurance coverage; or from

 9  the owner or operator of the uninsured motor vehicle or any

10  other person or organization jointly or severally liable

11  together with such owner or operator for the accident; and

12  such coverage shall cover the difference, if any, between the

13  sum of such benefits and the damages sustained, up to the

14  maximum amount of such coverage provided under this section.

15  The amount of coverage available under this section shall not

16  be reduced by a setoff against any coverage, including

17  liability insurance.  Such coverage shall not inure directly

18  or indirectly to the benefit of any workers' compensation or

19  disability benefits carrier or any person or organization

20  qualifying as a self-insurer under any workers' compensation

21  or disability benefits law or similar law.

22         (5)  Any person having a claim against an insolvent

23  insurer as defined in s. 631.54(5) s. 631.54(6) under the

24  provisions of this section shall present such claim for

25  payment to the Florida Insurance Guaranty Association only.

26  In the event of a payment to any person in settlement of a

27  claim arising under the provisions of this section, the

28  association is not subrogated or entitled to any recovery

29  against the claimant's insurer.  The association, however, has

30  the rights of recovery as set forth in chapter 631 in the

31  proceeds recoverable from the assets of the insolvent insurer.

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 1         (9)  Insurers may offer policies of uninsured motorist

 2  coverage containing policy provisions, in language approved by

 3  the office department, establishing that if the insured

 4  accepts this offer:

 5         (a)  The coverage provided as to two or more motor

 6  vehicles shall not be added together to determine the limit of

 7  insurance coverage available to an injured person for any one

 8  accident, except as provided in paragraph (c).

 9         (b)  If at the time of the accident the injured person

10  is occupying a motor vehicle, the uninsured motorist coverage

11  available to her or him is the coverage available as to that

12  motor vehicle.

13         (c)  If the injured person is occupying a motor vehicle

14  which is not owned by her or him or by a family member

15  residing with her or him, the injured person is entitled to

16  the highest limits of uninsured motorist coverage afforded for

17  any one vehicle as to which she or he is a named insured or

18  insured family member.  Such coverage shall be excess over the

19  coverage on the vehicle the injured person is occupying.

20         (d)  The uninsured motorist coverage provided by the

21  policy does not apply to the named insured or family members

22  residing in her or his household who are injured while

23  occupying any vehicle owned by such insureds for which

24  uninsured motorist coverage was not purchased.

25         (e)  If, at the time of the accident the injured person

26  is not occupying a motor vehicle, she or he is entitled to

27  select any one limit of uninsured motorist coverage for any

28  one vehicle afforded by a policy under which she or he is

29  insured as a named insured or as an insured resident of the

30  named insured's household.

31  

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 1  In connection with the offer authorized by this subsection,

 2  insurers shall inform the named insured, applicant, or lessee,

 3  on a form approved by the office department, of the

 4  limitations imposed under this subsection and that such

 5  coverage is an alternative to coverage without such

 6  limitations.  If this form is signed by a named insured,

 7  applicant, or lessee, it shall be conclusively presumed that

 8  there was an informed, knowing acceptance of such limitations.

 9  When the named insured, applicant, or lessee has initially

10  accepted such limitations, such acceptance shall apply to any

11  policy which renews, extends, changes, supersedes, or replaces

12  an existing policy unless the named insured requests deletion

13  of such limitations and pays the appropriate premium for such

14  coverage.  Any insurer who provides coverage which includes

15  the limitations provided in this subsection shall file revised

16  premium rates with the office department for such uninsured

17  motorist coverage to take effect prior to initially providing

18  such coverage.  The revised rates shall reflect the

19  anticipated reduction in loss costs attributable to such

20  limitations but shall in any event reflect a reduction in the

21  uninsured motorist coverage premium of at least 20 percent for

22  policies with such limitations.  Such filing shall not

23  increase the rates for coverage which does not contain the

24  limitations authorized by this subsection, and such rates

25  shall remain in effect until the insurer demonstrates the need

26  for a change in uninsured motorist rates pursuant to s.

27  627.0651.

28         Section 1191.  Subsection (1) of section 627.7275,

29  Florida Statutes, is amended to read:

30         627.7275  Motor vehicle property damage liability.--

31  

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 1         (1)  No motor vehicle insurance policy providing

 2  personal injury protection as set forth in s. 627.736 shall be

 3  delivered or issued for delivery in this state with respect to

 4  any specifically insured or identified motor vehicle

 5  registered or principally garaged in this state unless the

 6  policy also provides coverage for property damage liability in

 7  the amount of at least $10,000 because of damage to, or

 8  destruction of, property of others in any one accident arising

 9  out of the use of the motor vehicle or provides coverage in

10  the amount of at least $30,000 for combined property damage

11  liability and bodily injury liability in any one accident

12  arising out of the use of the motor vehicle.  The policy, as

13  to coverage of property damage liability, shall meet the

14  applicable requirements of s. 324.151, subject to the usual

15  policy exclusions such as have been approved in policy forms

16  by the office department.

17         Section 1192.  Subsections (7), (8), and (9) of section

18  627.728, Florida Statutes, are amended to read:

19         627.728  Cancellations; nonrenewals.--

20         (7)  Except in the case of cancellation for nonpayment

21  of premium or nonrenewal of the policy, the notice of

22  cancellation as provided by this section must contain the

23  following words which are to be prominently displayed:  "You

24  are permitted by law to appeal this cancellation.  An appeal

25  must be filed no later than 20 days before the effective date

26  of cancellation set forth in this notice.  Forms for such

27  appeal and the regulations pertaining thereto may be obtained

28  from the office offices of the Department of Insurance.  The

29  office Department of Insurance does not have the authority to

30  extend the effective date of cancellation; therefore you

31  

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 1  should obtain replacement coverage prior to the effective date

 2  of cancellation."

 3         (8)(a)  Within 2 working days after receipt of a timely

 4  appeal of the notice of cancellation, the office department

 5  shall initiate a proceeding.  If informal procedures fail to

 6  resolve the appeal, the office department shall, upon request

 7  of the insured, call a hearing upon 10 days' notice to the

 8  parties to be held by a disinterested employee of the office

 9  department.  Proceedings pursuant to this subsection are not

10  subject to the provisions of chapter 120.

11         (b)  Each insurer subject to this section shall

12  maintain on file with the office department the name and

13  address of the person authorized to receive notices pursuant

14  to this section on behalf of the insurer.

15         (c)  The office department shall, at the conclusion of

16  the proceeding or hearing or not later than 2 working days

17  thereafter, issue its written findings to the parties; and, if

18  it finds for the named insured, it shall either order the

19  insurer to rescind its notice of cancellation or, if the date

20  cancellation is to be effective has elapsed, order the policy

21  reinstated from the date of cancellation, and such coverage

22  shall be continuous to, and shall operate prospectively from,

23  the date of cancellation. However, no policy shall be

24  reinstated while the named insured is in arrears in payment of

25  premium on such policy.  If the office department finds for

26  the insurer, its written findings shall so state.

27         (d)  Reinstatement of a policy under this subsection

28  shall not operate in any way to extend the expiration,

29  termination, or anniversary date provided in the policy.  Upon

30  such reinstatement, costs and attorney's fees may be assessed

31  by the office department and paid to the named insured by an

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 1  insurer who has wrongfully canceled a policy, as determined by

 2  the proceeding or hearing provided for in paragraph (c).

 3         (9)  The office department shall deposit all fees

 4  provided for in this section into the Insurance Commissioner's

 5  Regulatory Trust Fund.

 6         Section 1193.  Subsection (5) of section 627.7282,

 7  Florida Statutes, is amended to read:

 8         627.7282  Notice of additional premium; cancellation

 9  upon nonpayment.--

10         (5)  The commission department may adopt rules

11  prescribing the format of the notice.

12         Section 1194.  Paragraph (a) of subsection (5) of

13  section 627.7295, Florida Statutes, is amended to read:

14         627.7295  Motor vehicle insurance contracts.--

15         (5)(a)  A licensed general lines agent may charge a

16  per-policy fee not to exceed $10 to cover the administrative

17  costs of the agent associated with selling the motor vehicle

18  insurance policy if the policy covers only personal injury

19  protection coverage as provided by s. 627.736 and property

20  damage liability coverage as provided by s. 627.7275 and if no

21  other insurance is sold or issued in conjunction with or

22  collateral to the policy. The per-policy fee must be a

23  component of the insurer's rate filing and may not be charged

24  by an agent unless the fee is included in the filing.  The fee

25  is not considered part of the premium except for purposes of

26  the office's department's review of expense factors in a

27  filing made pursuant to s. 627.062.

28         Section 1195.  Paragraph (c) of subsection (4),

29  paragraphs (a) and (e) of subsection (5), paragraph (a) of

30  subsection (6), and paragraph (c) of subsection (11) of

31  section 627.736, Florida Statutes, are amended to read:

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 1         627.736  Required personal injury protection benefits;

 2  exclusions; priority; claims.--

 3         (4)  BENEFITS; WHEN DUE.--Benefits due from an insurer

 4  under ss. 627.730-627.7405 shall be primary, except that

 5  benefits received under any workers' compensation law shall be

 6  credited against the benefits provided by subsection (1) and

 7  shall be due and payable as loss accrues, upon receipt of

 8  reasonable proof of such loss and the amount of expenses and

 9  loss incurred which are covered by the policy issued under ss.

10  627.730-627.7405. When the Agency for Health Care

11  Administration provides, pays, or becomes liable for medical

12  assistance under the Medicaid program related to injury,

13  sickness, disease, or death arising out of the ownership,

14  maintenance, or use of a motor vehicle, benefits under ss.

15  627.730-627.7405 shall be subject to the provisions of the

16  Medicaid program.

17         (c)  All overdue payments shall bear simple interest at

18  the rate established by the Comptroller under s. 55.03 or the

19  rate established in the insurance contract, whichever is

20  greater, for the year in which the payment became overdue,

21  calculated from the date the insurer was furnished with

22  written notice of the amount of covered loss. Interest shall

23  be due at the time payment of the overdue claim is made.

24         (5)  CHARGES FOR TREATMENT OF INJURED PERSONS.--

25         (a)  Any physician, hospital, clinic, or other person

26  or institution lawfully rendering treatment to an injured

27  person for a bodily injury covered by personal injury

28  protection insurance may charge only a reasonable amount for

29  the services and supplies rendered, and the insurer providing

30  such coverage may pay for such charges directly to such person

31  or institution lawfully rendering such treatment, if the

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 1  insured receiving such treatment or his or her guardian has

 2  countersigned the invoice, bill, or claim form approved by the

 3  office Department of Insurance upon which such charges are to

 4  be paid for as having actually been rendered, to the best

 5  knowledge of the insured or his or her guardian. In no event,

 6  however, may such a charge be in excess of the amount the

 7  person or institution customarily charges for like services or

 8  supplies in cases involving no insurance.

 9         (e)  All statements and bills for medical services

10  rendered by any physician, hospital, clinic, or other person

11  or institution shall be submitted to the insurer on a Health

12  Care Finance Administration 1500 form, UB 92 forms, or any

13  other standard form approved by the office or adopted by the

14  commission department for purposes of this paragraph. All

15  billings for such services shall, to the extent applicable,

16  follow the Physicians' Current Procedural Terminology (CPT) in

17  the year in which services are rendered. No statement of

18  medical services may include charges for medical services of a

19  person or entity that performed such services without

20  possessing the valid licenses required to perform such

21  services. For purposes of paragraph (4)(b), an insurer shall

22  not be considered to have been furnished with notice of the

23  amount of covered loss or medical bills due unless the

24  statements or bills comply with this paragraph.

25         (6)  DISCOVERY OF FACTS ABOUT AN INJURED PERSON;

26  DISPUTES.--

27         (a)  Every employer shall, if a request is made by an

28  insurer providing personal injury protection benefits under

29  ss. 627.730-627.7405 against whom a claim has been made,

30  furnish forthwith, in a form approved by the office

31  department, a sworn statement of the earnings, since the time

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 1  of the bodily injury and for a reasonable period before the

 2  injury, of the person upon whose injury the claim is based.

 3         (11)  DEMAND LETTER.--

 4         (c)  Each notice required by this section must be

 5  delivered to the insurer by United States certified or

 6  registered mail, return receipt requested.  Such postal costs

 7  shall be reimbursed by the insurer if so requested by the

 8  provider in the notice, when the insurer pays the overdue

 9  claim. Such notice must be sent to the person and address

10  specified by the insurer for the purposes of receiving notices

11  under this section, on the document denying or reducing the

12  amount asserted by the filer to be overdue. Each licensed

13  insurer, whether domestic, foreign, or alien, may file with

14  the office department designation of the name and address of

15  the person to whom notices pursuant to this section shall be

16  sent when such document does not specify the name and address

17  to whom the notices under this section are to be sent or when

18  there is no such document.  The name and address on file with

19  the office department pursuant to s. 624.422 shall be deemed

20  the authorized representative to accept notice pursuant to

21  this section in the event no other designation has been made.

22         Section 1196.  Subsection (5) of section 627.739,

23  Florida Statutes, is amended to read:

24         627.739  Personal injury protection; optional

25  limitations; deductibles.--

26         (5)  All such offers shall be made in clear and

27  unambiguous language at the time the initial application is

28  taken and prior to each annual renewal and shall indicate that

29  a premium reduction will result from each election. At the

30  option of the insurer, the requirements of the preceding

31  sentence are met by using forms of notice approved by the

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 1  office department, or by providing the following notice in

 2  10-point type in the insurer's application for initial

 3  issuance of a policy of motor vehicle insurance and the

 4  insurer's annual notice of renewal premium:

 5         For personal injury protection insurance, the

 6         named insured may elect a deductible and to

 7         exclude coverage for loss of gross income and

 8         loss of earning capacity ("lost wages"). These

 9         elections apply to the named insured alone, or

10         to the named insured and all dependent resident

11         relatives. A premium reduction will result from

12         these elections. The named insured is hereby

13         advised not to elect the lost wage exclusion if

14         the named insured or dependent resident

15         relatives are employed, since lost wages will

16         not be payable in the event of an accident.

17         Section 1197.  Section 627.7401, Florida Statutes, is

18  amended to read:

19         627.7401  Notification of insured's rights.--

20         (1)  The commission department, by rule, shall adopt a

21  form for the notification of insureds of their right to

22  receive personal injury protection benefits under the Florida

23  Motor Vehicle No-Fault Law. Such notice shall include a

24  description of the benefits provided by personal injury

25  protection, including, but not limited to, the specific types

26  of services for which medical benefits are paid, disability

27  benefits, death benefits, significant exclusions from and

28  limitations on personal injury protection benefits, when

29  payments are due, how benefits are coordinated with other

30  insurance benefits that the insured may have, penalties and

31  interest that may be imposed on insurers for failure to make

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 1  timely payments of benefits, and rights of parties regarding

 2  disputes as to benefits.

 3         (2)  Each insurer issuing a policy in this state

 4  providing personal injury protection benefits must mail or

 5  deliver the notice as specified in subsection (1) to an

 6  insured within 21 days after receiving from the insured notice

 7  of an automobile accident or claim involving personal injury

 8  to an insured who is covered under the policy. The office

 9  department may allow an insurer additional time to provide the

10  notice specified in subsection (1) not to exceed 30 days, upon

11  a showing by the insurer that an emergency justifies an

12  extension of time.

13         (3)  The notice required by this section does not alter

14  or modify the terms of the insurance contract or other

15  requirements of this act.

16         Section 1198.  Paragraph (h) of subsection (2) and

17  subsections (4), (5), and (7) of section 627.744, Florida

18  Statutes, are amended to read:

19         627.744  Required preinsurance inspection of private

20  passenger motor vehicles.--

21         (2)  This section does not apply:

22         (h)  To any other vehicle or policy exempted by rule of

23  the commission department.  The commission department may base

24  a rule under this paragraph only on a determination that the

25  likelihood of a fraudulent physical damage claim is remote or

26  that the inspection would cause a serious hardship to the

27  insurer or the applicant.

28         (4)  The inspection required by this section shall be

29  provided by the insurer or by a person or organization

30  authorized by the insurer.  The applicant may be required to

31  pay the cost of the inspection, not to exceed $5. The

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 1  inspection shall be recorded on a form prescribed by the

 2  commission department, and the form or a copy shall be

 3  retained by the insurer with its policy records for the

 4  insured.  The insurer shall provide a copy of the form to the

 5  insured upon request.  Any inspection fee paid directly by the

 6  applicant may not be considered part of the premium.  However,

 7  an insurer that provides the inspection at no cost to the

 8  applicant may include the expense of the inspection within a

 9  rate filing.

10         (5)  The inspection shall include at least the

11  following:

12         (a)  Taking a physical imprint of the vehicle

13  identification number of the vehicle or otherwise recording

14  the vehicle identification number in a manner prescribed by

15  the commission department.

16         (b)  Recording the presence of accessories required by

17  the commission department to be recorded.

18         (c)  Recording the locations of and a description of

19  existing damage to the vehicle.

20         (7)  The commission department may, by rule, establish

21  such procedures and notice requirements that it finds

22  necessary to implement this section.

23         Section 1199.  Section 627.745, Florida Statutes, is

24  amended to read:

25         627.745  Mediation of claims.--

26         (1)(a)  In any claim filed with an insurer for personal

27  injury in an amount of $10,000 or less or any claim for

28  property damage in any amount, arising out of the ownership,

29  operation, use, or maintenance of a motor vehicle, either

30  party may demand mediation of the claim prior to the

31  institution of litigation.

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 1         (b)  A request for mediation shall be filed with the

 2  office department on a form approved by the office department.

 3  The request for mediation shall state the reason for the

 4  request for mediation and the issues in dispute which are to

 5  be mediated.  The filing of a request for mediation tolls the

 6  applicable time requirements for filing suit for a period of

 7  60 days following the conclusion of the mediation process or

 8  the time prescribed in s. 95.11, whichever is later.

 9         (c)  The insurance policy must specify in detail the

10  terms and conditions for mediation of a first-party claim.

11         (d)  The mediation shall be conducted as an informal

12  process in which formal rules of evidence and procedure need

13  not be observed.  Any party participating in a mediation must

14  have the authority to make a binding decision.  All parties

15  must mediate in good faith.

16         (e)  The office department shall randomly select

17  mediators.  Each party may once reject the mediator selected,

18  either originally or after the opposing side has exercised its

19  option to reject a mediator.

20         (f)  Costs of mediation shall be borne equally by both

21  parties unless the mediator determines that one party has not

22  mediated in good faith.

23         (g)  Only one mediation may be requested for each

24  claim, unless all parties agree to further mediation.

25         (2)  Upon receipt of a request for mediation, the

26  office department shall refer the request to a mediator.  The

27  mediator shall notify the applicant and all interested

28  parties, as identified by the applicant, and any other parties

29  the mediator believes may have an interest in the mediation,

30  of the date, time, and place of the mediation conference.  The

31  conference may be held by telephone, if feasible.  The

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 1  mediation conference shall be held within 45 days after the

 2  request for mediation.

 3         (3)(a)  The office department shall approve mediators

 4  to conduct mediations pursuant to this section.  All mediators

 5  must file an application under oath for approval as a

 6  mediator.

 7         (b)  To qualify for approval as a mediator, a person

 8  must meet the following qualifications:

 9         1.  Possess a masters or doctorate degree in

10  psychology, counseling, business, accounting, or economics, be

11  a member of The Florida Bar, be licensed as a certified public

12  accountant, or demonstrate that the applicant for approval has

13  been actively engaged as a qualified mediator for at least 4

14  years prior to July 1, 1990.

15         2.  Within 4 years immediately preceding the date the

16  application for approval is filed with the office department,

17  have completed a minimum of a 40-hour training program

18  approved by the office department and successfully passed a

19  final examination included in the training program and

20  approved by the office department. The training program shall

21  include and address all of the following:

22         a.  Mediation theory.

23         b.  Mediation process and techniques.

24         c.  Standards of conduct for mediators.

25         d.  Conflict management and intervention skills.

26         e.  Insurance nomenclature.

27         (4)  The commission department must adopt rules of

28  procedure for claims mediation, taking into consideration a

29  system which:

30         (a)  Is fair.

31         (b)  Promotes settlement.

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 1         (c)  Avoids delay.

 2         (d)  Is nonadversarial.

 3         (e)  Uses a framework for modern mediating technique.

 4         (f)  Controls costs and expenses of mediation.

 5         (5)  Disclosures and information divulged in the

 6  mediation process are not admissible in any subsequent action

 7  or proceeding relating to the claim or to the cause of action

 8  giving rise to the claim.  A person demanding mediation under

 9  this section may not demand or request mediation after a suit

10  is filed relating to the same facts already mediated.

11         Section 1200.  Subsections (1) and (2) of section

12  627.758, Florida Statutes, are amended to read:

13         627.758  Surety on auto club traffic arrest bond;

14  conditions, limit; bail bond.--

15         (1)  Any authorized surety insurer may, in any year,

16  become surety in an amount not to exceed $1,000 with respect

17  to any guaranteed traffic arrest bond certificate issued in

18  such year by an automobile club or association by filing with

19  the office department an undertaking to become surety.

20         (2)  The undertaking shall be in the form prescribed by

21  the commission department and shall state the following:

22         (a)  The name and address of the automobile club or

23  association with respect to the guaranteed traffic arrest bond

24  certificates for which the surety insurer undertakes to be

25  surety.

26         (b)  The unqualified obligation of the surety insurer

27  to pay the fine or forfeiture in an amount not to exceed

28  $1,000 for any person who, after posting a guaranteed traffic

29  arrest bond certificate with respect to which the insurer has

30  undertaken to be surety, fails to make the appearance for

31  which the certificate was posted.

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 1         Section 1201.  Subsection (2) of section 627.7711,

 2  Florida Statutes, is amended to read:

 3         627.7711  Definitions.--As used in this part, the term:

 4         (2)  "Premium" means the charge, as specified by rule

 5  of the commission department, that is made by a title insurer

 6  for a title insurance policy, including the charge for

 7  performance of primary title services by a title insurer or

 8  title insurance agent or agency, and incurring the risks

 9  incident to such policy, under the several classifications of

10  title insurance contracts and forms, and upon which charge a

11  premium tax is paid under s. 624.509.  As used in this part or

12  in any other law, with respect to title insurance, the word

13  "premium" does not include a commission.

14         Section 1202.  Section 627.777, Florida Statutes, is

15  amended to read:

16         627.777  Approval of forms.--A title insurer may not

17  issue or agree to issue any form of title insurance

18  commitment, title insurance policy, other contract of title

19  insurance, or related form until it is filed with and approved

20  by the office department.  The office department may not

21  disapprove a title guarantee or policy form on the ground that

22  it has on it a blank form for an attorney's opinion on the

23  title.

24         Section 1203.  Subsection (2) of section 627.7773,

25  Florida Statutes, is amended to read:

26         627.7773  Accounting and auditing of forms by title

27  insurers.--

28         (2)  If the office department has reason to believe

29  that an audit of outstanding forms should be required of any

30  title insurer as to a title insurance agent or agency, the

31  office department may require the title insurer to make a

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 1  special audit of the forms.  The title insurer shall complete

 2  the audit not later than 60 days after the request is received

 3  from the office department, and shall report the results of

 4  the special audit to the office department no later than 90

 5  days after the request is received.

 6         Section 1204.  Subsection (1) of section 627.780,

 7  Florida Statutes, is amended to read:

 8         627.780  Illegal dealings in risk premium.--

 9         (1)  A person may not knowingly quote, charge, accept,

10  collect, or receive a premium for title insurance other than

11  the premium adopted by the commission department.

12         Section 1205.  Subsections (1), (2), (7), and (8) of

13  section 627.782, Florida Statutes, are amended to read:

14         627.782  Adoption of rates.--

15         (1)  Subject to the rating provisions of this code, the

16  commission department must adopt a rule specifying the premium

17  to be charged in this state by title insurers for the

18  respective types of title insurance contracts and, for

19  policies issued through agents or agencies, the percentage of

20  such premium required to be retained by the title insurer

21  which shall not be less than 30 percent. However, in a

22  transaction subject to the Real Estate Settlement Procedures

23  Act of 1974, 12 U.S.C. ss. 2601 et seq., as amended, no

24  portion of the premium attributable to providing a primary

25  title service shall be paid to or retained by any person who

26  does not actually perform or is not liable for the performance

27  of such service. The commission department may, by rule,

28  establish limitations on related title services charges made

29  in addition to the premium based upon the expenses associated

30  with the services rendered and other relevant factors.

31  

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 1         (2)  In adopting premium rates, the commission

 2  department must give due consideration to the following:

 3         (a)  The title insurers' loss experience and

 4  prospective loss experience under closing protection letters

 5  and policy liabilities.

 6         (b)  A reasonable margin for underwriting profit and

 7  contingencies, including contingent liability under s.

 8  627.7865, sufficient to allow title insurers, agents, and

 9  agencies to earn a rate of return on their capital that will

10  attract and retain adequate capital investment in the title

11  insurance business and maintain an efficient title insurance

12  delivery system.

13         (c)  Past expenses and prospective expenses for

14  administration and handling of risks.

15         (d)  Liability for defalcation.

16         (e)  Other relevant factors.

17         (7)  The commission department shall, in accordance

18  with the standards provided in subsection (2), review the

19  premium as needed, but not less frequently than once every 3

20  years, and shall, based upon the review required by this

21  subsection, revise the premium if the results of the review so

22  warrant.

23         (8)  The commission department may, by rule, require

24  licensees under this part to annually submit statistical

25  information, including loss and expense data, as the

26  department determines to be necessary to analyze premium

27  rates, retention rates, and the condition of the title

28  insurance industry.

29         Section 1206.  Section 627.783, Florida Statutes, is

30  amended to read:

31         627.783  Rate deviation.--

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 1         (1)  A title insurer may petition the office department

 2  for an order authorizing a specific deviation from the adopted

 3  premium, and a title insurer or title insurance agent may

 4  petition the office department for an order authorizing and

 5  permitting a specific deviation above the reasonable charge

 6  for related title services rendered specified in s.

 7  627.782(1).  The petition shall be in writing and sworn to and

 8  shall set forth allegations of fact upon which the petitioner

 9  will rely, including the petitioner's reasons for requesting

10  the deviation.  Any authorized title insurer, agent, or agency

11  may join in the petition for like authority to deviate or may

12  file a separate petition praying for like authority or

13  opposing the deviation. The office department shall rule on

14  all such petitions simultaneously.

15         (2)  If, in the judgment of the office department, the

16  requested deviation is not justified, the office department

17  may enter an order denying the petition.  An order granting a

18  petition constitutes an amendment to the adopted premium as to

19  the petitioners named in the order, and is subject to s.

20  627.782.

21         Section 1207.  Subsection (3) of section 627.7843,

22  Florida Statutes, is amended to read:

23         627.7843  Ownership and encumbrance reports.--

24         (3)  Any ownership and encumbrance report or similar

25  report that is relied on or intended to be relied on by a

26  consumer must be on forms approved by the office department,

27  and must provide for a maximum liability for incorrect

28  information of not more than $1,000.

29         Section 1208.  Subsections (2) and (3) of section

30  627.7845, Florida Statutes, are amended to read:

31  

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 1         627.7845  Determination of insurability required;

 2  preservation of evidence of title search and examination.--

 3         (2)  The title insurer shall cause the evidence of the

 4  reasonable search and examination of the title to be preserved

 5  and retained in its files or in the files of its title

 6  insurance agent or agency for a period of not less than 7

 7  years after the title insurance commitment, title insurance

 8  policy, or guarantee of title was issued.  The title insurer

 9  or agent or agency must produce the evidence required to be

10  maintained by this subsection at its offices upon the demand

11  of the office department. Instead of retaining the original

12  evidence, the title insurer or the title insurance agent or

13  agency may, in the regular course of business, establish a

14  system under which all or part of the evidence is recorded,

15  copied, or reproduced by any photographic, photostatic,

16  microfilm, microcard, miniature photographic, or other process

17  which accurately reproduces or forms a durable medium for

18  reproducing the original.

19         (3)  The title insurer or its agent or agency must

20  maintain a record of the actual risk premium and related title

21  service charges made for issuance of the policy and any

22  endorsements in its files for a period of not less than 7

23  years.  The title insurer, agent, or agency must produce the

24  record at its office upon demand of the office department.

25         Section 1209.  Subsection (3) of section 627.786,

26  Florida Statutes, is amended to read:

27         627.786  Transaction of title insurance and any other

28  kind of insurance prohibited.--

29         (3)  Subsection (1) does not preclude a title insurer

30  from providing instruments to any prospective insured, in the

31  form and content approved by the office department, under

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 1  which the title insurer assumes liability for loss due to the

 2  fraud of, dishonesty of, misappropriation of funds by, or

 3  failure to comply with written closing instructions by, its

 4  contract agents, agencies, or approved attorneys in connection

 5  with a real property transaction for which the title insurer

 6  is to issue a title insurance policy.

 7         Section 1210.  Section 627.7865, Florida Statutes, is

 8  amended to read:

 9         627.7865  Title insurer assessments.--As a condition of

10  doing business in this state, each title insurer shall be

11  liable for an assessment to pay all unpaid title insurance

12  claims on real property in this state for any title insurer

13  which is liquidated with unpaid outstanding claims.  The

14  office department shall assess all title insurers on a pro

15  rata basis determined by their writings in this state for

16  amounts necessary to pay the claims.  A title insurer is not

17  required to pay an amount in excess of one-tenth of its

18  surplus as to policyholders.

19         Section 1211.  Section 627.791, Florida Statutes, is

20  amended to read:

21         627.791  Penalties against title insurers for

22  violations by persons or entities not licensed.--A title

23  insurer is subject to the penalties in ss. 624.418(2) and

24  624.4211 for any violation of a lawful order or rule of the

25  office or commission department, or for any violation of this

26  code, committed by:

27         (1)  A person, firm, association, corporation,

28  cooperative, joint-stock company, or other legal entity not

29  licensed under this part when issuing and countersigning

30  commitments or policies of title insurance on behalf of the

31  title insurer.

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 1         (2)  An attorney when issuing and countersigning

 2  commitments or policies of title insurance on behalf of the

 3  title insurer.

 4         Section 1212.  Section 627.793, Florida Statutes, is

 5  amended to read:

 6         627.793  Rulemaking authority.--The commission may

 7  department is authorized to adopt rules implementing the

 8  provisions of this part.

 9         Section 1213.  Section 627.798, Florida Statutes, is

10  amended to read:

11         627.798  Rulemaking authority.--The commission

12  department shall by rule adopt a form to be used to provide

13  notice to a purchaser-mortgagor that the purchaser-mortgagor

14  is not protected by the title policy of the mortgagee.

15         Section 1214.  Section 627.805, Florida Statutes, is

16  amended to read:

17         627.805  Departmental Regulation of variable and

18  indeterminate value contracts; rules.--The office department,

19  notwithstanding any other provision of law, shall have the

20  sole authority to regulate the issuance and sale of variable

21  and indeterminate value contracts, and the commission has

22  authority to adopt rules pursuant to ss. 120.536(1) and 120.54

23  to implement the provisions of this part.

24         Section 1215.  Section 627.8055, Florida Statutes, is

25  amended to read:

26         627.8055  Qualification of companies to issue variable

27  or indeterminate value contracts.--No insurance company shall

28  issue or deliver any contract on a variable or indeterminate

29  value basis until it has satisfied the office department that

30  its financial condition, management, history, and methods of

31  

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 1  operation are not such as would render its operation harmful

 2  to the public welfare.

 3         Section 1216.  Section 627.828, Florida Statutes, is

 4  amended to read:

 5         627.828  License required.--

 6         (1)  Except as provided in ss. 627.901 and 627.902, no

 7  person shall engage in the business of a premium finance

 8  company unless licensed by the office department.  Every

 9  premium finance company licensed under the provisions of this

10  part shall maintain at all times a net worth of $35,000.

11  However, in lieu of having a net worth of $35,000, a premium

12  finance company that has a net worth of $10,000 may file a

13  surety bond with the office or other acceptable collateral

14  with the department as approved by the office or department it

15  in the amount of $35,000, which bond or collateral must be

16  maintained.

17         (2)  The application for a license shall be in writing

18  and in the form prescribed by the commission department.

19  Every applicant shall provide evidence of a net worth of

20  $35,000 attested by two officers of the company, or a $35,000

21  surety bond and evidence of a net worth of $10,000 attested by

22  two officers of the company.  Assets to be used in computing

23  the required net worth shall be determined by rules adopted by

24  the commission department.

25         (3)(a)  Each premium finance company authorized under

26  the provisions of this part shall maintain at all times an

27  errors and omissions insurance policy of no less than $500,000

28  covering the acts of its officers, employees, and agents. The

29  policy may contain reasonable deductibles not to exceed 2

30  percent of the policy limits.

31  

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 1         (b)1.  A premium finance company with an unencumbered

 2  net worth of at least $15 million may self-insure the errors

 3  and omissions coverage if it meets the requirements of this

 4  paragraph.

 5         2.  To qualify as a self-insurer the premium finance

 6  company must:

 7         a.  Have and maintain an unencumbered net worth of $15

 8  million, which shall be determined based on assets permissible

 9  for insurers pursuant to ss. 625.012 and 625.031;

10         b.  Annually demonstrate as part of its annual report,

11  to the satisfaction of the department, that the net-worth

12  requirement is being met; and

13         c.  Obtain, as a part of its annual application for

14  licensure as a premium finance company, a certificate of

15  self-insurance from the office department to be renewed

16  annually.

17         3.  If the office department finds that the premium

18  finance company:

19         a.  Is not maintaining at all times an unencumbered net

20  worth of at least $15 million; or

21         b.  Is not, in good faith, covering the errors and

22  omissions of its officers, employees and agents,

23  

24  the office department shall, in addition to other penalties

25  under this code, revoke or suspend the certificate of

26  self-insurance, and the premium finance company shall be

27  subject to the requirements of paragraph (a).

28         (c)  The commission department may adopt rules

29  necessary to administer this subsection, including rules

30  prescribing the necessary forms.

31  

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 1         (4)  A single license shall entitle the holder to

 2  operate more than one office.

 3         (5)  At the time of filing an application for a

 4  license, the applicant shall pay to the office department the

 5  license fee and, upon original application or upon application

 6  subsequent to denial of application, or revocation, suspension

 7  or surrender of a license, an investigation fee.

 8         (6)  Such license shall state the name and address of

 9  the licensee, and a copy shall be kept conspicuously posted in

10  each office of the licensee and shall not be transferable or

11  assignable.

12         (7)  Prior to moving an existing office to another

13  location, a licensee shall notify the office department in

14  writing of its intention to do so.

15         Section 1217.  Section 627.829, Florida Statutes, is

16  amended to read:

17         627.829  Approval, disapproval of application; license

18  renewal.--

19         (1)  The office department shall issue the license,

20  unless it finds that the management of the premium finance

21  company filing the application is so lacking in managerial

22  experience as to make the proposed operation hazardous to the

23  insurance-buying public or unless it has good reason to

24  believe the management of the premium finance company is

25  affiliated directly or indirectly through ownership, control,

26  or in other business relations with any person whose business

27  operations are or have been marked as detrimental to the

28  public, policyholders, stockholders, investors, or creditors

29  by manipulation of assets or of accounts or by bad faith.

30         (2)  If the office department refuses to issue a

31  license, it shall notify the applicant of the denial and

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 1  return to the applicant the sum paid as a license fee, but

 2  shall retain the investigation fee to cover the costs of

 3  investigating the applicant.

 4         (3)  Each license shall remain in force until September

 5  30 of the year for which issued, unless earlier surrendered,

 6  suspended, or revoked, and may be renewed for the ensuing

 7  license year upon the filing of an application therefor.  If

 8  an application for renewal is filed with the office department

 9  before October 1 of any year, the license sought to be renewed

10  shall be continued in force either until the issuance by the

11  office department of the renewal license applied for or until

12  5 days after the office department refuses to renew the

13  license.

14         Section 1218.  Section 627.832, Florida Statutes, is

15  amended to read:

16         627.832  Grounds for refusal, suspension, or revocation

17  of license.--

18         (1)  The office department may deny, suspend, revoke,

19  or refuse to renew any license, if it finds:

20         (a)  That the licensee has failed to pay the annual

21  license fee or any sum of money lawfully demanded under

22  authority of any other section of this part or has failed to

23  comply with any order of the office department.

24         (b)  That the licensee has violated any provision of

25  this part or any rule of the commission department.

26         (c)  That any fact or condition exists which, if it had

27  existed at the time of the original application, clearly would

28  have warranted a refusal to issue the license.

29         (d)  Material misstatement, misrepresentation, or fraud

30  in obtaining the license or permit, or in attempting to obtain

31  the license or permit.

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 1         (e)  That the license or permit is being willfully

 2  used, or is to be used, to circumvent any of the requirements

 3  or prohibitions of this code.

 4         (f)  Willful misrepresentation of any premium finance

 5  contract or willful deception with regard to any such

 6  contract, accomplished either in person or by any form of

 7  dissemination of information.

 8         (g)  A demonstrated lack of fitness or trustworthiness.

 9         (h)  Fraudulent or dishonest practices in the conduct

10  of business.

11         (i)  Misappropriation, conversion, or unlawful

12  withholding of moneys belonging to insurers, insureds, or

13  beneficiaries or to others and received in the conduct of

14  business.

15         (j)  That the licensee has been found guilty of, or has

16  pleaded guilty to, a felony in this state or any other state.

17         (2)  A licensee may surrender a license by delivering

18  to the office department written notice that she or he thereby

19  surrenders such license, but such surrender shall not affect

20  such licensee's civil or criminal liability for acts committed

21  prior to such surrender.

22         (3)  No revocation, suspension, or surrender of a

23  license shall impair or affect the obligation of any insured

24  under any lawful premium finance agreement previously acquired

25  or held by the licensee.

26         (4)  Every license issued hereunder shall remain in

27  force and effect until it has been surrendered, revoked, or

28  suspended or expires in accordance with the provisions of this

29  part; but the office may department shall have authority to

30  reinstate a suspended license or to issue a new license to a

31  licensee whose license has been revoked, if no fact or

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 1  condition then exists which clearly would have warranted

 2  office departmental refusal originally to issue such license

 3  under this part.

 4         Section 1219.  Section 627.833, Florida Statutes, is

 5  amended to read:

 6         627.833  Administrative fine and probation in lieu of

 7  suspension, revocation, or refusal to renew license.--The

 8  office department may, in its discretion in lieu of a

 9  suspension, revocation, or refusal to renew or continue any

10  license, impose on the licensee an administrative penalty or

11  place such licensee on probation pursuant to ss. 626.681 and

12  626.691.

13         Section 1220.  Section 627.834, Florida Statutes, is

14  amended to read:

15         627.834  Examinations.--

16         (1)  The office department may conduct examinations and

17  investigations of premium finance companies under the

18  provisions of ss. 624.307 and 626.601.

19         (2)  As often as it deems necessary and not less

20  frequently than each 3 years, the office department shall

21  examine each licensed premium finance company.  The

22  examination shall be for the purpose of ascertaining

23  compliance by the person examined with the applicable

24  provisions of this code.

25         Section 1221.  Section 627.836, Florida Statutes, is

26  amended to read:

27         627.836  Licensee's books and records; reports.--

28         (1)  The licensee shall keep and use in her or his

29  business such books, accounts, and records as will enable the

30  office department to determine whether the licensee is

31  complying with the provisions of this part and with the rules

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 1  pertaining thereto. Every licensee shall preserve such books,

 2  accounts, and records, including cards used in a card system,

 3  if any, for at least 3 years after making the final entry in

 4  respect to any premium finance agreement recorded therein;

 5  however, the preservation of photographic reproductions

 6  thereof or records in photographic form shall constitute

 7  compliance with this requirement.

 8         (2)  Each licensee shall annually, on or before March

 9  1, file a report with the office department giving such

10  information as the office department may require.  The report

11  shall be made under oath and in the form prescribed by the

12  commission department and shall be accompanied by the annual

13  report filing fee specified in s. 627.849.  The office

14  department may make and publish annually an analysis and

15  recapitulation of such reports.  In addition, the office

16  department may require such additional regular or special

17  reports as it may deem necessary.

18         Section 1222.  Section 627.838, Florida Statutes, is

19  amended to read:

20         627.838  Filing and approval of forms; service

21  charges.--

22         (1)  No premium finance agreement form or related form

23  shall be used in this state by a premium finance company

24  unless it has been filed with and approved by the office

25  department.  Every filing shall be made within 30 days of

26  issuance or use.

27         (2)  Each premium finance company shall file with the

28  office department the service charge and interest rate plan,

29  including all modifications thereto, for informational

30  purposes only.  Every filing shall be made within 30 days of

31  its effective date.

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 1         (3)  Each filing shall be accompanied by the filing fee

 2  specified in s. 627.849.

 3         Section 1223.  Paragraph (b) of subsection (3) of

 4  section 627.840, Florida Statutes, is amended to read:

 5         627.840  Limitation on service and other charges.--

 6         (3)

 7         (b)  The service charge shall be a maximum of $12 per

 8  $100 per year plus an additional charge not exceeding $20,

 9  which additional charge need not be refunded upon prepayment.

10  Such additional charge may be charged only once in a 12-month

11  period for any one customer unless that customer's policy has

12  been canceled due to nonpayment within the immediately

13  preceding 12-month period. However, any insured may prepay her

14  or his premium finance agreement in full at any time before

15  the due date of the final payment; and in such event the

16  unearned service charge shall be refunded in accordance with

17  the "Rule of 78ths," or any other method at least as

18  beneficial to the insured and approved by the office

19  department, and shall represent at least as great a proportion

20  of the service charge, if any, as the sum of the periodic

21  balances after the month in which prepayment is made bears to

22  the sum of all periodic balances under the schedule of

23  payments in the agreement.  When the amount of the refund is

24  less than $1, no refund need be made if the agreement so

25  states.

26         Section 1224.  Section 627.8405, Florida Statutes, is

27  amended to read:

28         627.8405  Prohibited acts; financing companies.--No

29  premium finance company shall, in a premium finance agreement

30  or other agreement, finance the cost of or otherwise provide

31  

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 1  for the collection or remittance of dues, assessments, fees,

 2  or other periodic payments of money for the cost of:

 3         (1)  A membership in an automobile club. The term

 4  "automobile club" means a legal entity which, in consideration

 5  of dues, assessments, or periodic payments of money, promises

 6  its members or subscribers to assist them in matters relating

 7  to the ownership, operation, use, or maintenance of a motor

 8  vehicle; however, this definition of "automobile club" does

 9  not include persons, associations, or corporations which are

10  organized and operated solely for the purpose of conducting,

11  sponsoring, or sanctioning motor vehicle races, exhibitions,

12  or contests upon racetracks, or upon racecourses established

13  and marked as such for the duration of such particular events.

14  The words "motor vehicle" used herein have the same meaning as

15  defined in chapter 320.

16         (2)  An accidental death and dismemberment policy sold

17  in combination with a personal injury protection and property

18  damage only policy.

19         (3)  Any product not regulated under the provisions of

20  this insurance code.

21  

22  This section also applies to premium financing by any

23  insurance agent or insurance company under part XVI. The

24  commission department shall adopt rules to assure disclosure,

25  at the time of sale, of coverages financed with personal

26  injury protection and shall prescribe the form of such

27  disclosure.

28         Section 1225.  Paragraph (e) of subsection (1) and

29  subsection (3) of section 627.848, Florida Statutes, are

30  amended to read:

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 1         627.848  Cancellation of insurance contract upon

 2  default.--

 3         (1)  When a premium finance agreement contains a power

 4  of attorney or other authority enabling the premium finance

 5  company to cancel any insurance contract listed in the

 6  agreement, the insurance contract shall not be canceled unless

 7  cancellation is in accordance with the following provisions:

 8         (e)  Whenever an insurance contract is canceled in

 9  accordance with this section, the insurer shall promptly

10  return the unpaid balance due under the finance contract, up

11  to the gross amount available upon the cancellation of the

12  policy, to the premium finance company and any remaining

13  unearned premium to the agent or the insured, or both, for the

14  benefit of the insured or insureds. The insurer shall notify

15  the insured and the agent of the amount of unearned premium

16  returned to the premium finance company and the amount of

17  unearned commission held by the agent. The premium finance

18  company within 15 days shall notify the insured and the agent

19  of the amount of unearned premium. Within 15 days of receipt

20  of notification from the premium finance company, the agent

21  shall return such amount including any unearned commission to

22  the insured or with the written approval of the insured apply

23  such amount to the purchase of other insurance products

24  regulated by the office department. The commission department

25  may adopt rules necessary to implement the provisions of this

26  subsection.

27         (3)  The commission department shall adopt a standard

28  cancellation notice for use by premium finance companies in

29  canceling insurance policies. The commission department shall

30  specify the color of the notice so as to promote usability and

31  standardization.

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 1         Section 1226.  Section 627.849, Florida Statutes, is

 2  amended to read:

 3         627.849  Fees.--

 4         (1)  The office department shall collect in advance,

 5  and the persons so served shall pay to it in advance, the

 6  following fees:

 7         (a)  Annual license fee............................$250

 8         (b)  Investigation fee..............................100

 9         (c)  Annual report filing fee........................25

10         (d)  Form filing fee.................................10

11         (2)  The fees received under this section shall be

12  credited to the Insurance Commissioner's Regulatory Trust

13  Fund.

14         Section 1227.  Section 627.912, Florida Statutes, is

15  amended to read:

16         627.912  Professional liability claims and actions;

17  reports by insurers.--

18         (1)  Each self-insurer authorized under s. 627.357 and

19  each insurer or joint underwriting association providing

20  professional liability insurance to a practitioner of medicine

21  licensed under chapter 458, to a practitioner of osteopathic

22  medicine licensed under chapter 459, to a podiatric physician

23  licensed under chapter 461, to a dentist licensed under

24  chapter 466, to a hospital licensed under chapter 395, to a

25  crisis stabilization unit licensed under part IV of chapter

26  394, to a health maintenance organization certificated under

27  part I of chapter 641, to clinics included in chapter 390, to

28  an ambulatory surgical center as defined in s. 395.002, or to

29  a member of The Florida Bar shall report in duplicate to the

30  office Department of Insurance any claim or action for damages

31  for personal injuries claimed to have been caused by error,

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 1  omission, or negligence in the performance of such insured's

 2  professional services or based on a claimed performance of

 3  professional services without consent, if the claim resulted

 4  in:

 5         (a)  A final judgment in any amount.

 6         (b)  A settlement in any amount.

 7  

 8  Reports shall be filed with the office department and, if the

 9  insured party is licensed under chapter 458, chapter 459,

10  chapter 461, or chapter 466, with the Department of Health, no

11  later than 30 days following the occurrence of any event

12  listed in paragraph (a) or paragraph (b). The Department of

13  Health shall review each report and determine whether any of

14  the incidents that resulted in the claim potentially involved

15  conduct by the licensee that is subject to disciplinary

16  action, in which case the provisions of s. 456.073 shall

17  apply. The Department of Health, as part of the annual report

18  required by s. 456.026, shall publish annual statistics,

19  without identifying licensees, on the reports it receives,

20  including final action taken on such reports by the Department

21  of Health or the appropriate regulatory board.

22         (2)  The reports required by subsection (1) shall

23  contain:

24         (a)  The name, address, and specialty coverage of the

25  insured.

26         (b)  The insured's policy number.

27         (c)  The date of the occurrence which created the

28  claim.

29         (d)  The date the claim was reported to the insurer or

30  self-insurer.

31  

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 1         (e)  The name and address of the injured person. This

 2  information is confidential and exempt from the provisions of

 3  s. 119.07(1), and must not be disclosed by the office

 4  department without the injured person's consent, except for

 5  disclosure by the office department to the Department of

 6  Health. This information may be used by the office department

 7  for purposes of identifying multiple or duplicate claims

 8  arising out of the same occurrence.

 9         (f)  The date of suit, if filed.

10         (g)  The injured person's age and sex.

11         (h)  The total number and names of all defendants

12  involved in the claim.

13         (i)  The date and amount of judgment or settlement, if

14  any, including the itemization of the verdict, together with a

15  copy of the settlement or judgment.

16         (j)  In the case of a settlement, such information as

17  the office department may require with regard to the injured

18  person's incurred and anticipated medical expense, wage loss,

19  and other expenses.

20         (k)  The loss adjustment expense paid to defense

21  counsel, and all other allocated loss adjustment expense paid.

22         (l)  The date and reason for final disposition, if no

23  judgment or settlement.

24         (m)  A summary of the occurrence which created the

25  claim, which shall include:

26         1.  The name of the institution, if any, and the

27  location within the institution at which the injury occurred.

28         2.  The final diagnosis for which treatment was sought

29  or rendered, including the patient's actual condition.

30         3.  A description of the misdiagnosis made, if any, of

31  the patient's actual condition.

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 1         4.  The operation, diagnostic, or treatment procedure

 2  causing the injury.

 3         5.  A description of the principal injury giving rise

 4  to the claim.

 5         6.  The safety management steps that have been taken by

 6  the insured to make similar occurrences or injuries less

 7  likely in the future.

 8         (n)  Any other information required by the office

 9  department to analyze and evaluate the nature, causes,

10  location, cost, and damages involved in professional liability

11  cases.

12         (3)  Upon request by the Department of Health, the

13  office department shall provide the Department of Health with

14  any information received under this section related to persons

15  licensed under chapter 458, chapter 459, chapter 461, or

16  chapter 466. For purposes of safety management, the office

17  department shall annually provide the Department of Health

18  with copies of the reports in cases resulting in an indemnity

19  being paid to the claimants.

20         (4)  There shall be no liability on the part of, and no

21  cause of action of any nature shall arise against, any insurer

22  reporting hereunder or its agents or employees or the office

23  department or its employees for any action taken by them under

24  this section.  The office department may impose a fine of $250

25  per day per case, but not to exceed a total of $1,000 per

26  case, against an insurer that violates the requirements of

27  this section. This subsection applies to claims accruing on or

28  after October 1, 1997.

29         (5)  Any self-insurance program established under s.

30  1004.24 shall report in duplicate to the office Department of

31  Insurance any claim or action for damages for personal

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 1  injuries claimed to have been caused by error, omission, or

 2  negligence in the performance of professional services

 3  provided by the state university board of trustees through an

 4  employee or agent of the state university board of trustees,

 5  including practitioners of medicine licensed under chapter

 6  458, practitioners of osteopathic medicine licensed under

 7  chapter 459, podiatric physicians licensed under chapter 461,

 8  and dentists licensed under chapter 466, or based on a claimed

 9  performance of professional services without consent if the

10  claim resulted in a final judgment in any amount, or a

11  settlement in any amount. The reports required by this

12  subsection shall contain the information required by

13  subsection (3) and the name, address, and specialty of the

14  employee or agent of the state university board of trustees

15  whose performance or professional services is alleged in the

16  claim or action to have caused personal injury.

17         Section 1228.  Section 627.9122, Florida Statutes, is

18  amended to read:

19         627.9122  Officers' and directors' liability claims;

20  reports by insurers.--

21         (1)  Each insurer providing coverage for officers' and

22  directors' liability coverage shall report to the office

23  Department of Insurance any claim or action for damages

24  claimed to have been caused by error, omission, or negligence

25  in the performance of the officer's or director's services, if

26  the claim resulted in:

27         (a)  A final judgment in any amount.

28         (b)  A settlement in any amount.

29         (c)  A final disposition not resulting in payment on

30  behalf of the insured.

31  

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 1  Reports shall be filed with the office department no later

 2  than 60 days following the occurrence of any event listed in

 3  paragraph (a), paragraph (b), or paragraph (c).

 4         (2)  The reports required by subsection (1) shall

 5  contain:

 6         (a)  The name, address, and position held by the

 7  insured, and the type of corporation or organization,

 8  including classifications as provided in s. 501(c) of the

 9  Internal Revenue Code of 1986, as amended.

10         (b)  The insured's policy number.

11         (c)  The date of the occurrence which created the

12  claim.

13         (d)  The date the claim was reported to the insurer.

14         (e)  The name of the injured person. This information

15  is confidential and exempt from the provisions of s.

16  119.07(1), and must not be disclosed by the office department

17  without the consent of the injured person. This information

18  may be used by the office department for purposes of

19  identifying multiple or duplicate claims arising out of the

20  same occurrence.

21         (f)  The date of suit, if filed.

22         (g)  The total number and names of all defendants

23  involved in the claim.

24         (h)  The date and amount of judgment or settlement,

25  together with a copy of the settlement or judgment.

26         (i)  In the case of a settlement, such information as

27  the office department may require with regard to the

28  claimant's anticipated future losses.

29         (j)  The loss adjustment expense paid to defense

30  counsel, and all other allocated loss adjustment expenses

31  paid.

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 1         (k)  The date and reason for final disposition, if no

 2  judgment or settlement.

 3         (l)  A summary of the occurrence which created the

 4  claim, which shall include:

 5         1.  Whether the injuries claimed were the result of

 6  physical damage to the claimant, were the result of damage to

 7  the reputation of the claimant, were based on self-dealing by

 8  the defendant, or were in the nature of a shareholder dispute.

 9         2.  A description of the type of activity which caused

10  the injury.

11         3.  The steps taken by the officers or directors to

12  assure that similar occurrences are less likely in the future.

13         (m)  Any other information required by the office

14  department to analyze and evaluate the nature, causes, costs,

15  and damages involved in officers' and directors' liability

16  cases.

17         (3)  The office department shall include a summary of

18  this information in its annual report.

19         Section 1229.  Section 627.9126, Florida Statutes, is

20  amended to read:

21         627.9126  Reports by liability insurers.--

22         (1)  Each insurer transacting commercial multiperil,

23  products liability, commercial automobile liability, private

24  passenger automobile liability, or other line of liability

25  insurance shall maintain information as specified in this

26  section. Such information shall be maintained for each line of

27  insurance and for direct Florida business only. The office

28  department may conduct a sampling of claims or actions for

29  damages for personal injury or property damage claimed to have

30  been caused by error, omission, or negligence of insureds if

31  the claim resulted in:

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 1         (a)  A final judgment in any amount.

 2         (b)  A settlement in any amount.

 3         (c)  A final disposition not resulting in payment on

 4  behalf of the insured.

 5         (2)  Upon request of the office department, an insurer

 6  shall, within 60 days, submit to the office department a

 7  report that contains:

 8         (a)  A final judgment in any amount.

 9         (b)  A settlement in any amount.

10         (c)  A final disposition not resulting in payment on

11  behalf of the insured.

12         (3)  The reports required by subsection (2) shall

13  contain:

14         (a)1.  The name, address, and class or line of coverage

15  of the insured.

16         2.  The insured's policy number.

17         3.  The date of the occurrence which created the claim.

18         4.  The date the claim was reported to the insurer or

19  self-insurer.

20         5.  The date of suit, if filed.

21         6.  The claimant's name, age, and sex; however, the

22  name of the claimant is confidential and exempt from the

23  provisions of s. 119.07(1).

24         7.  The total number and names of all defendants

25  involved in the claim.

26         8.  Claims settled after a suit was filed.

27         9.  Claims paid based on a judgment.

28         10.  Judgments appealed by the insurer, together with

29  the total results of such appeals.

30  

31  

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 1         11.  The date and amount of final judgment or

 2  settlement, if any, including the itemization of the verdict,

 3  together with a copy of the settlement or final judgment.

 4         12.  In the case of a settlement, such information as

 5  the office department may require with regard to the injured

 6  person's incurred and anticipated medical expense, wage loss,

 7  and other expenses.

 8         13.  The loss adjustment expense paid to defense

 9  counsel and other allocated loss adjustment expense paid.

10         14.  The date and reason for final disposition, if no

11  judgment or settlement.

12         (b)  A summary of the occurrence which created the

13  claim, which shall include:

14         1.  The name of the facility, business, or institution,

15  if any, and the location within the facility, business, or

16  institution at which the injury occurred.

17         2.  A description of the principal injury giving rise

18  to the claim.

19         3.  The safety management steps that have been taken by

20  the insured to make similar occurrences or injuries less

21  likely in the future.

22         (c)  Any other information required by the office

23  department to analyze and evaluate the nature, causes,

24  location, cost, and damages involved in liability cases.

25         (4)  There shall be no liability on the part of, and no

26  cause of action of any nature shall arise against, any insurer

27  reporting hereunder or its agents or employees or the office

28  department or its employees for any action taken by them

29  pursuant to this section.

30         Section 1230.  Section 627.913, Florida Statutes, is

31  amended to read:

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 1         627.913  Reports by products liability insurers.--The

 2  office department may require any insurer authorized to write

 3  a policy of products liability insurance in the state to

 4  transmit the following information, based on its statewide

 5  products liability insurance writings. Upon the request of the

 6  office department, an insurer shall, within 60 days, submit to

 7  the office department a report that contains:

 8         (1)  Premiums written;

 9         (2)  Premiums earned;

10         (3)  Unearned premiums;

11         (4)  The dollar amount of claims paid;

12         (5)  Incurred claims, not including claims incurred but

13  not reported;

14         (6)  Claims closed without payment, and the amount

15  reserved for such claims;

16         (7)  Loss reserves for all claims except claims

17  incurred but not reported;

18         (8)  Reserves for claims incurred but not reported;

19         (9)  Losses paid as a percentage of the amount reserved

20  for such losses;

21         (10)  Net investment gain or loss and other income gain

22  or loss allocated to products liability lines according to the

23  allocation formula used in the annual insurance expense

24  exhibit;

25         (11)  Underwriting income or loss;

26         (12)  Actual expenses in detail, including, but not

27  limited to, loss adjustment expense; commissions; general

28  expense; and advertising, home office, and defense costs;

29         (13)  Claims settled after a suit was filed;

30         (14)  Claims paid based on a judgment; and

31  

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 1         (15)  Judgments appealed by the insurer, together with

 2  the total results of such appeals.

 3         Section 1231.  Section 627.914, Florida Statutes, is

 4  amended to read:

 5         627.914  Reports of information by workers'

 6  compensation insurers required.--

 7         (1)  The commission department shall adopt rules and

 8  statistical plans that must thereafter be used by each insurer

 9  and self-insurance fund as defined in s. 624.461 in the

10  recording and reporting of loss, expense, and claims

11  experience, in order that the experience of all insurers and

12  self-insurance funds may be made available at least annually

13  in such form and detail as may be necessary to aid the office

14  department in determining whether Florida experience for

15  workers' compensation insurance is sufficient for establishing

16  rates.

17         (2)  Each insurer and self-insurance fund authorized to

18  write a policy of workers' compensation insurance shall

19  transmit the following information annually on both Florida

20  experience and nationwide experience separately:

21         (a)  Payrolls by classification.

22         (b)  Manual premiums by classification.

23         (c)  Standard premiums by classification.

24         (d)  Losses by classification and injury type.

25         (e)  Expenses.

26  

27  A report of this information shall be filed no later than July

28  1 of each year.  All reports shall be filed in accordance with

29  standard reporting procedures for insurers, which procedures

30  have received approval by the office department, and shall

31  contain data for the most recent policy period available.  A

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 1  statistical or rating organization may be used by insurers and

 2  self-insurance funds to report the data required by this

 3  section.  The statistical or rating organization shall report

 4  each data element in the aggregate only for insurers and

 5  self-insurance funds required to report under this section who

 6  elect to have the organization report on their behalf. Such

 7  insurers and self-insurance funds shall be named in the

 8  report.

 9         (3)  Individual self-insurers as defined in s. 440.02

10  shall report only Florida data as prescribed in paragraphs

11  (2)(a)-(e) to the office department.

12         (a)  The office department shall publish the dates and

13  forms necessary to enable individual self-insurers to comply

14  with this section.

15         (b)  A statistical or rating organization may be used

16  by individual self-insurers for the purposes of reporting the

17  data required by this section and calculating experience

18  ratings.

19         (4)  The office department shall provide a summary of

20  information provided pursuant to subsection (2) in its annual

21  report.

22         Section 1232.  Section 627.915, Florida Statutes, is

23  amended to read:

24         627.915  Insurer experience reporting.--

25         (1)  Each insurer transacting private passenger

26  automobile insurance in this state shall report certain

27  information annually to the office department.  The

28  information will be due on or before July 1 of each year. The

29  information shall be divided into the following categories:

30  bodily injury liability; property damage liability; uninsured

31  motorist; personal injury protection benefits; medical

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 1  payments; comprehensive and collision.  The information given

 2  shall be on direct insurance writings in the state alone and

 3  shall represent total limits data. The information set forth

 4  in paragraphs (a)-(f) is applicable to voluntary private

 5  passenger and Joint Underwriting Association private passenger

 6  writings and shall be reported for each of the latest 3

 7  calendar-accident years, with an evaluation date of March 31

 8  of the current year.  The information set forth in paragraphs

 9  (g)-(j) is applicable to voluntary private passenger writings

10  and shall be reported on a calendar-accident year basis

11  ultimately seven times at seven different stages of

12  development.

13         (a)  Premiums earned for the latest 3 calendar-accident

14  years.

15         (b)  Loss development factors and the historic

16  development of those factors.

17         (c)  Policyholder dividends incurred.

18         (d)  Expenses for other acquisition and general

19  expense.

20         (e)  Expenses for agents' commissions and taxes,

21  licenses, and fees.

22         (f)  Profit and contingency factors as utilized in the

23  insurer's automobile rate filings for the applicable years.

24         (g)  Losses paid.

25         (h)  Losses unpaid.

26         (i)  Loss adjustment expenses paid.

27         (j)  Loss adjustment expenses unpaid.

28         (2)  Each insurer transacting fire, homeowner's

29  multiple peril, commercial multiple peril, medical

30  malpractice, products liability, workers' compensation,

31  private passenger automobile liability, commercial automobile

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 1  liability, private passenger automobile physical damage,

 2  commercial automobile physical damage, officers' and

 3  directors' liability insurance, or other liability insurance

 4  shall report, for each such line of insurance, the information

 5  specified in this subsection to the office department.  The

 6  information shall be reported for direct Florida business only

 7  and shall be reported on a calendar-year basis annually by

 8  April 1 for the preceding calendar year:

 9         (a)  Direct premiums written.

10         (b)  Direct premiums earned.

11         (c)  Loss reserves for all known claims:

12         1.  At beginning of the year.

13         2.  At end of the year.

14         (d)  Reserves for losses incurred but not reported:

15         1.  At beginning of the year.

16         2.  At end of the year.

17         (e)  Allocated loss adjustment expense:

18         1.  Reserve at beginning of the year.

19         2.  Reserve at end of the year.

20         3.  Paid during the year.

21         (f)  Unallocated loss adjustment expense:

22         1.  Reserve at beginning of the year.

23         2.  Reserve at end of the year.

24         3.  Paid during the year.

25         (g)  Direct losses paid.

26         (h)  Underwriting income or loss.

27         (i)  Commissions and brokerage fees.

28         (j)  Taxes, licenses, and fees.

29         (k)  Other acquisition costs.

30         (l)  General expenses.

31         (m)  Policyholder dividends.

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 1         (n)  Net investment gain or loss and other income gain

 2  or loss allocated pro rata by earned premium to Florida

 3  business utilizing the investment allocation formula contained

 4  in the National Association of Insurance Commissioner's

 5  Profitability Report by line by state.

 6         (3)  There shall be no liability on the part of, and no

 7  cause of action of any nature shall arise against, any insurer

 8  reporting hereunder or its agents or employees or the office

 9  department or its employees for any action taken by them

10  pursuant to this section unless such action otherwise

11  constitutes a violation of this code.

12         (4)  The office department shall provide a summary of

13  information provided pursuant to subsections (1) and (2) in

14  its annual report.

15         (5)  Any insurer or insurer group which does not write

16  at least 0.5 percent of the Florida market based on premiums

17  written shall not have to file any report required by

18  subsection (2) other than a report indicating its percentage

19  of the market share.  That percentage shall be calculated by

20  dividing the current premiums written by the preceding year's

21  total premiums written in the state for that line of

22  insurance.

23         Section 1233.  Section 627.917, Florida Statutes, is

24  amended to read:

25         627.917  Uniform risk classification reporting system

26  for motor vehicle insurance.--

27         (1)  The commission department shall establish and

28  promulgate a uniform statewide reporting system to classify

29  risks for the purpose of evaluating rates and premiums and for

30  the purpose of evaluating competition and the availability of

31  motor vehicle insurance in the voluntary market. The system

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 1  shall divide risks into classifications based upon variations

 2  in hazards or expenses of claims.  The classification system

 3  may include any difference among risks that can be

 4  demonstrated to have a probable effect upon losses or

 5  expenses, but in no event shall the system adopted by the

 6  commission department discriminate among risks based upon

 7  race, creed, color, or national origin.  The classification

 8  system shall divide the state into geographical areas based

 9  upon hazards or expenses of claims.

10         (2)  Each insurer shall annually file with the office

11  department a statement reflecting the total number of persons

12  insured by the insurer within each classification by coverage,

13  the premium volume in each classification by coverage, the

14  paid and reserved losses incurred in each classification by

15  coverage, the number of cancellations or nonrenewals by the

16  insurer during the period, and the number of new insureds

17  during the period.  This statement shall be filed annually on

18  a date determined by the commission department and shall cover

19  a 1-year period.

20         (3)  The commission department may adopt promulgate

21  rules to require each insurer to report its loss and expense

22  experience by classification, in such detail and as often as

23  may be necessary to aid the office department in determining

24  the reasonableness of rates, the validity of loss projections,

25  and the validity of the risk classification system.

26         Section 1234.  Section 627.9175, Florida Statutes, is

27  amended to read:

28         627.9175  Reports of information on health insurance.--

29         (1)  Each health insurer shall submit annually to the

30  office department as to policies of individual health

31  insurance:

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 1         (a)  A summary of typical benefits, exclusions, and

 2  limitations for each type of individual policy form currently

 3  being issued in the state.  The summary shall include, as

 4  appropriate:

 5         1.  The deductible amount;

 6         2.  The coinsurance percentage;

 7         3.  The out-of-pocket maximum;

 8         4.  Outpatient benefits;

 9         5.  Inpatient benefits; and

10         6.  Any exclusions for preexisting conditions.

11  

12  The commission department shall determine other appropriate

13  benefits, exclusions, and limitations to be reported for

14  inclusion in the consumer's guide published pursuant to this

15  section.

16         (b)  A schedule of rates for each type of individual

17  policy form reflecting typical variations by age, sex, region

18  of the state, or any other applicable factor which is in use

19  and is determined to be appropriate for inclusion by the

20  commission department.

21  

22  The commission department shall provide by rule a uniform

23  format for the submission of this information in order to

24  allow for meaningful comparisons of premiums charged for

25  comparable benefits.  The office department shall provide this

26  information to the department, which shall publish annually a

27  consumer's guide which summarizes and compares the information

28  required to be reported under this subsection.

29         (2)(a)  Every insurer transacting health insurance in

30  this state shall report annually to the office department, not

31  later than April 1, information relating to any measure the

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 1  insurer has implemented or proposes to implement during the

 2  next calendar year for the purpose of containing health

 3  insurance costs or cost increases. The reports shall identify

 4  each measure and the forms to which the measure is applied,

 5  shall provide an explanation as to how the measure is used,

 6  and shall provide an estimate of the cost effect of the

 7  measure.

 8         (b)  The commission department shall promulgate forms

 9  to be used by insurers in reporting information pursuant to

10  this subsection and shall utilize such forms to analyze the

11  effects of health care cost containment programs used by

12  health insurers in this state.

13         (c)  The office department shall analyze the data

14  reported under this subsection and shall annually make

15  available to the department which shall provide to the public

16  a summary of its findings as to the types of cost containment

17  measures reported and the estimated effect of these measures.

18         Section 1235.  Section 627.918, Florida Statutes, is

19  amended to read:

20         627.918  Reporting formats.--

21         (1)  The office department shall require that the

22  reporting provided for in this part be made on forms

23  established by the commission department or in a format

24  compatible with the office's its electronic data processing

25  equipment.

26         (2)  The reporting forms and formats established by the

27  commission department shall not provide for repeated

28  collection of identical information relating to a single

29  independent data element except when repeated collection of

30  such information is necessary to accomplish the purpose of the

31  section under which the information is reported.

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 1         Section 1236.  Section 627.919, Florida Statutes, is

 2  amended to read:

 3         627.919  Maintenance of insurance data.--The office

 4  department shall maintain data elements required in insurers'

 5  annual statements and information reported by insurers

 6  pursuant to this part in a computer file which will be

 7  available for the generation of reports and calculations on a

 8  scheduled or demand basis by the office department and

 9  Legislature.  The acquisition by the office department of data

10  processing software, hardware, and services necessary to carry

11  out the provisions of this section by the Treasurer's

12  Management Information Center shall be exempt from the

13  provisions of part I of chapter 287.

14         Section 1237.  Section 627.9403, Florida Statutes, is

15  amended to read:

16         627.9403  Scope.--The provisions of this part shall

17  apply to long-term care insurance policies delivered or issued

18  for delivery in this state, and to policies delivered or

19  issued for delivery outside this state to the extent provided

20  in s. 627.9406, by an insurer, a fraternal benefit society as

21  defined in s. 632.601, a health maintenance organization as

22  defined in s. 641.19, a prepaid health clinic as defined in s.

23  641.402, or a multiple-employer welfare arrangement as defined

24  in s. 624.437. A policy which is advertised, marketed, or

25  offered as a long-term care policy and as a Medicare

26  supplement policy shall meet the requirements of this part and

27  the requirements of ss. 627.671-627.675 and, to the extent of

28  a conflict, be subject to the requirement that is more

29  favorable to the policyholder or certificateholder. The

30  provisions of this part shall not apply to a continuing care

31  contract issued pursuant to chapter 651 and shall not apply to

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 1  guaranteed renewable policies issued prior to October 1, 1988.

 2  Any limited benefit policy that limits coverage to care in a

 3  nursing home or to one or more lower levels of care required

 4  or authorized to be provided by this part or by commission

 5  department rule must meet all requirements of this part that

 6  apply to long-term care insurance policies, except ss.

 7  627.9407(3)(c), (9), (10)(f), and (12) and 627.94073(2). If

 8  the limited benefit policy does not provide coverage for care

 9  in a nursing home, but does provide coverage for one or more

10  lower levels of care, the policy shall also be exempt from the

11  requirements of s. 627.9407(3)(d).

12         Section 1238.  Subsections (6) and (7) of section

13  627.9404, Florida Statutes, are amended to read:

14         627.9404  Definitions.--For the purposes of this part:

15         (6)  "Licensed health care practitioner" means any

16  physician, nurse licensed under part I of chapter 464, or

17  psychotherapist licensed under chapter 490 or chapter 491, or

18  any individual who meets any requirements prescribed by rule

19  by the commission department.

20         (7)  "Limited benefit policy" means any policy that

21  limits coverage to care in a nursing home or to one or more

22  lower levels of care required or authorized to be provided by

23  this part or by commission department rule.

24         Section 1239.  Paragraph (d) of subsection (1) and

25  subsection (3) of section 627.9405, Florida Statutes, are

26  amended to read:

27         627.9405  Authorized groups; filing requirements.--

28         (1)  No group long-term care insurance policy shall be

29  delivered or issued for delivery in this state insuring more

30  than one individual unless issued to one of the following

31  groups:

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 1         (d)  A group other than as described in paragraph (a),

 2  paragraph (b), or paragraph (c), subject to a determination by

 3  the office department that:

 4         1.  The issuance of the group policy is not contrary to

 5  the best interest of the public;

 6         2.  The issuance of the group policy would result in

 7  economies of acquisition or administration; and

 8         3.  The benefits are reasonable in relation to the

 9  premiums charged.

10         (3)  Prior to advertising, marketing, or soliciting a

11  group long-term care insurance policy in this state, the

12  insurer shall demonstrate to the office department that the

13  requirements of this section have been met pursuant to the

14  filing procedures specified in s. 627.410.

15         Section 1240.  Section 627.9406, Florida Statutes, is

16  amended to read:

17         627.9406  Out-of-state group long-term care

18  insurance.--No group long-term care insurance coverage may be

19  offered to a resident of this state under a group policy

20  issued in another state to a group described in s.

21  627.9405(1)(c) or (d), unless this state or such other state

22  having statutory and regulatory long-term care insurance

23  requirements substantially similar to those adopted in this

24  state has made a determination that such requirements have

25  been met.  Evidence to this effect shall be filed by the

26  insurer with the office department pursuant to the procedures

27  specified in s. 627.410.

28         Section 1241.  Subsections (1) and (2), paragraphs (a)

29  and (c) of subsection (3), paragraph (c) of subsection (4),

30  and subsection (6) of section 627.9407, Florida Statutes, are

31  amended to read:

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 1         627.9407  Disclosure, advertising, and performance

 2  standards for long-term care insurance.--

 3         (1)  STANDARDS.--The commission department shall adopt

 4  rules that include standards for full and fair disclosure

 5  setting forth the manner, content, and required disclosures of

 6  the sale of long-term care insurance policies, terms of

 7  renewability, initial and subsequent conditions of

 8  eligibility, nonduplication of coverage provisions, coverage

 9  of dependents, preexisting conditions, termination of

10  insurance, continuation or conversion, probationary periods,

11  limitations, exceptions, reductions, elimination periods,

12  requirements for replacement, recurrent conditions, disclosure

13  of tax consequences, benefit triggers, prohibition against

14  post-claims underwriting, reporting requirements, standards

15  for marketing, and definitions of terms.

16         (2)  ADVERTISING.--The commission department shall

17  adopt rules setting forth standards for advertising,

18  marketing, and sale of long-term care policies in order to

19  protect applicants from unfair or deceptive sales or

20  enrollment practices.  An insurer shall file with the office

21  department any long-term care insurance advertising material

22  intended for use in this state at least 30 days before the

23  date of use of the advertisement in this state.  Within 30

24  days after the date of receipt of the advertising material,

25  the office department shall review the material and shall

26  disapprove any advertisement if, in the opinion of the office

27  department, such advertisement violates any of the provisions

28  of this part or of part IX of chapter 626 or any rule of the

29  commission department.  The office department may disapprove

30  an advertisement at any time and enter an immediate order

31  requiring that the use of the advertisement be discontinued if

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 1  it determines that the advertisement violates any of the

 2  provisions of this part or of part IX of chapter 626 or any

 3  rule of the commission department.

 4         (3)  RESTRICTIONS.--A long-term care insurance policy

 5  may not:

 6         (a)  Be canceled, nonrenewed, or otherwise terminated

 7  on the grounds of the age or the deterioration of the mental

 8  or physical health of the insured individual or

 9  certificateholder; however, the office department may

10  authorize nonrenewal for an insurer on a statewide basis on

11  terms and conditions determined to be necessary by the office

12  department to protect the interests of the insureds, if the

13  insurer demonstrates that renewal will jeopardize the

14  insurer's solvency or that substantial and unexpected loss

15  experience cannot reasonably be mitigated or remedied.

16         (c)  Restrict its coverage to care only in a nursing

17  home licensed pursuant to part II of chapter 400 or provide

18  significantly more coverage for such care than coverage for

19  lower levels of care.  The commission department shall adopt

20  rules defining what constitutes significantly more coverage in

21  nursing homes licensed pursuant to part II of chapter 400 than

22  for lower levels of care.

23         (4)  PREEXISTING CONDITION.--

24         (c)  The office department may extend the limitation

25  periods set forth in paragraphs (a) and (b) as to specific age

26  group categories in specific policy forms upon findings that

27  the extension is in the best interest of the public.

28         (6)  LOSS RATIO AND RESERVE STANDARDS.--The commission

29  department shall adopt rules establishing loss ratio and

30  reserve standards for long-term care insurance policies.  The

31  rules must contain a specific reference to long-term care

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 1  insurance policies. Such loss ratio and reserve standards

 2  shall be established at levels at which benefits are

 3  reasonable in relation to premiums and that provide for

 4  adequate reserving of the long-term care insurance risk.

 5         Section 1242.  Subsection (2) of section 627.94072,

 6  Florida Statutes, is amended to read:

 7         627.94072  Mandatory offers.--

 8         (2)  An insurer that offers a long-term care insurance

 9  policy, certificate, or rider in this state must offer a

10  nonforfeiture protection provision providing reduced paid-up

11  insurance, extended term, shortened benefit period, or any

12  other benefits approved by the office department if all or

13  part of a premium is not paid.  Nonforfeiture benefits and any

14  additional premium for such benefits must be computed in an

15  actuarially sound manner, using a methodology that has been

16  filed with and approved by the office department.

17         Section 1243.  Subsection (1) of section 627.94074,

18  Florida Statutes, is amended to read:

19         627.94074  Standards for benefit triggers.--

20         (1)(a)  A long-term care insurance policy shall

21  condition the payment of benefits on a determination of the

22  insured's ability to perform activities of daily living and on

23  cognitive impairment.  Eligibility for the payment of benefits

24  shall not be more restrictive than requiring either a

25  deficiency in the ability to perform not more than three of

26  the activities of daily living or the presence of cognitive

27  impairment; or

28         (b)  If a policy is a qualified long-term care

29  insurance policy, the policy shall condition the payment of

30  benefits on a determination of the insured's being chronically

31  ill; having a level of disability similar, as provided by rule

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 1  of the commission Insurance Commissioner, to the insured's

 2  ability to perform activities of daily living; or being

 3  cognitively impaired as described in paragraph (6)(b).

 4  Eligibility for the payment of benefits shall not be more

 5  restrictive than requiring a deficiency in the ability to

 6  perform not more than three of the activities of daily living.

 7         Section 1244.  Section 627.9408, Florida Statutes, is

 8  amended to read:

 9         627.9408  Rules.--

10         (1)  The commission department may adopt rules pursuant

11  to ss. 120.536(1) and 120.54 to administer this part.

12         (2)  The commission department may adopt by rule the

13  provisions of the Long-Term Care Insurance Model Regulation

14  adopted by the National Association of Insurance Commissioners

15  in the second quarter of the year 2000 which are not in

16  conflict with the Florida Insurance Code.

17         Section 1245.  Paragraph (g) of subsection (6) of

18  section 627.942, Florida Statutes, is amended to read:

19         627.942  Definitions.--As used in this part, unless the

20  context otherwise requires:

21         (6)  "Plan of operation or a feasibility study" means

22  an analysis which presents the expected activities and results

23  of a risk retention group, including, at a minimum:

24         (g)  Such other matters as are may be requested by the

25  office department.

26         Section 1246.  Subsections (2) and (3) of section

27  627.943, Florida Statutes, are amended to read:

28         627.943  Risk retention groups certified in Florida.--

29         (2)  Before it may offer insurance in any state, each

30  risk retention group shall also submit for approval to the

31  office department a plan of operation or a feasibility study.

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 1  Before additional lines of liability insurance are offered in

 2  this or any other state approval shall be obtained from the

 3  office department.

 4         (3)  A proposed risk retention group shall provide to

 5  the office department a summary of the application for a

 6  certificate of authority at the time it files the application.

 7  The summary information shall include the name of the risk

 8  retention group, the identity of those individuals who

 9  organized the group or who will provide administrative

10  services or otherwise influence or control the activities of

11  the group, the amount and nature of initial capitalization,

12  and the states in which the group intends to operate.  A copy

13  of the summary shall be provided by the office department to

14  the National Association of Insurance Commissioners.

15         Section 1247.  Subsections (1), (2), (5), (6), and (11)

16  of section 627.944, Florida Statutes, are amended to read:

17         627.944  Risk retention groups not certificated in this

18  state.--Risk retention groups certificated or licensed in

19  states other than this state and seeking to do business as a

20  risk retention group in this state must observe and abide by

21  the laws of this state as follows:

22         (1)  NOTICE OF OPERATIONS AND DESIGNATION OF CHIEF

23  FINANCIAL OFFICER COMMISSIONER AS AGENT.--Before offering

24  insurance in this state, a risk retention group shall submit

25  to the office department:

26         (a)  A statement identifying the state or states in

27  which the risk retention group is certificated or licensed as

28  a liability insurance company, date of certification or

29  licensing, its principal place of business, and such other

30  information, including information on its membership, as the

31  office department may require to verify that the risk

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 1  retention group is qualified as a risk retention group under

 2  the provisions of this part.

 3         (b)  A copy of its plan of operations or a feasibility

 4  study and revisions of such plan or study submitted to its

 5  state of domicile; provided, however, that the provision

 6  relating to the submission of a plan of operation or a

 7  feasibility study shall not apply with respect to any line or

 8  classification of liability insurance which was defined in the

 9  Product Liability Risk Retention Act of 1981 before October

10  27, 1986, and which was offered before such date by any risk

11  retention group which had been certificated or licensed and

12  operating for not less than 3 years before such date.

13         (c)  A statement of registration which designates the

14  Chief Financial Officer Insurance Commissioner and Treasurer

15  or her or his designee as its agent for the purpose of

16  receiving service of legal documents of process.

17         (2)  FINANCIAL CONDITION.--Any risk retention group

18  doing business in this state shall submit to the office

19  department:

20         (a)  A copy of the group's financial statement

21  submitted to its state of domicile, which shall be certified

22  by an independent public accountant and contain a statement of

23  opinion on loss and loss adjustment expense reserves made by a

24  member of the American Academy of Actuaries or a qualified

25  loss reserve specialist under criteria established by rule of

26  the commission department after considering any criteria

27  established by the National Association of Insurance

28  Commissioners.

29         (b)  A copy of each examination of the risk retention

30  group as certified by the insurance commissioner or public

31  official conducting the examination.

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 1         (c)  Upon request by the office department, a copy of

 2  any audit performed with respect to the risk retention group.

 3         (d)  Such information as may be required to verify its

 4  continuing qualification as a risk retention group under the

 5  provisions of this part.

 6         (5)  DECEPTIVE, FALSE, OR FRAUDULENT PRACTICES.--Any

 7  risk retention group shall comply with and be subject to the

 8  laws of this state regarding deceptive, false, or fraudulent

 9  acts or practices, including the provisions of part IX of

10  chapter 626. If the office department seeks an injunction

11  regarding conduct in violation of these laws, the injunction

12  may be obtained from any Florida court of competent

13  jurisdiction.

14         (6)  EXAMINATION REGARDING FINANCIAL CONDITION.--Any

15  risk retention group must submit to an examination by the

16  office department to determine its financial condition if the

17  insurance commissioner of the jurisdiction in which the group

18  is certificated or licensed has not initiated an examination

19  or does not initiate an examination within 30 days after a

20  request by the office department. Any examination shall be

21  coordinated to avoid unjustified repetition and conducted in

22  an expeditious manner.

23         (11)  DELINQUENCY PROCEEDINGS.--A risk retention group

24  not domiciled in this state but doing business in this state

25  shall comply with a lawful order issued in a voluntary

26  dissolution proceeding or in a delinquency proceeding

27  commenced by the office department if there has been a finding

28  of financial impairment after an examination under subsection

29  (6).

30         Section 1248.  Section 627.948, Florida Statutes, is

31  amended to read:

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 1         627.948  Notice and registration requirements of

 2  purchasing groups.--

 3         (1)  A purchasing group which intends to do business in

 4  this state shall furnish notice to the office department which

 5  shall:

 6         (a)  Identify the state in which the group is

 7  domiciled.

 8         (b)  Specify the lines and classifications of liability

 9  insurance which the purchasing group intends to purchase.

10         (c)  Identify the insurance company or companies from

11  which the group intends to purchase its insurance and the

12  domicile of such company or companies.

13         (d)  Identify the principal place of business of the

14  group.

15         (e)  Provide such other information as may be required

16  by the office department to verify that the purchasing group

17  is qualified as a purchasing group under the provisions of

18  this part.

19         (2)  The purchasing group shall register with and

20  designate the Chief Financial Officer Insurance Commissioner

21  and Treasurer or her or his designee as its agent solely for

22  the purpose of receiving service of legal documents or

23  process. This requirement shall not apply in the case of a

24  purchasing group:

25         (a)  Which:

26         1.  Was domiciled before April 1, 1986.

27         2.  Is domiciled on and after October 27, 1986, in any

28  state of the United States.

29         (b)  Which:

30         1.  Before October 27, 1986, purchased insurance from

31  an insurance carrier licensed in any state; and

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 1         2.  Since October 27, 1986, purchased its insurance

 2  from an insurance carrier licensed in any state.

 3         (c)  Which was a purchasing group under the

 4  requirements of the Product Liability Risk Retention Act of

 5  1981 before October 27, 1986.

 6         (d)  Which does not purchase insurance that was not

 7  authorized for purposes of an exemption under that act, as in

 8  effect before October 27, 1986.

 9         Section 1249.  Section 627.950, Florida Statutes, is

10  amended to read:

11         627.950  Administrative and procedural authority

12  regarding risk retention and purchasing groups.--The office

13  department is authorized to make use of any of the powers

14  established under the Florida Insurance Code to enforce the

15  laws of this state so long as those powers are not

16  specifically preempted by the Product Liability Risk Retention

17  Act of 1981 as amended by the Risk Retention Amendments of

18  1986.  This includes, but is not limited to, the office's

19  department's administrative authority to investigate, issue

20  subpoenas, conduct depositions and hearings, issue orders, and

21  impose penalties.  With regard to any investigation,

22  administrative proceedings, or litigation, the office

23  department may rely on the procedural law and regulations of

24  the state.  The injunctive authority of the office department

25  in regard to risk retention groups is restricted to the extent

26  that any injunction shall be issued by a court of competent

27  jurisdiction.

28         Section 1250.  Section 627.951, Florida Statutes, is

29  amended to read:

30         627.951  Penalties; cease and desist orders;

31  injunctions.--

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 1         (1)  A risk retention group which violates any

 2  applicable provision of the Florida Insurance Code shall be

 3  subject to fines and penalties applicable to licensed insurers

 4  generally, including revocation of its license or the right to

 5  do business in this state.  In addition, any such risk

 6  retention group shall be subject to the issuance of a cease

 7  and desist order of the office department or an injunction

 8  issued by a court of competent jurisdiction prohibiting such

 9  violation or prohibiting the soliciting, selling, or

10  transacting of insurance or otherwise operating or conducting

11  business in this state in violation of the laws of this state.

12  The office department may obtain an order from a court of

13  competent jurisdiction to enjoin a risk retention group from

14  further operation or from transacting insurance in this state

15  if the risk retention group is in hazardous financial

16  condition or financially impaired or to enjoin a risk

17  retention group from the soliciting, selling, or transacting

18  of insurance with respect to any person who is not eligible

19  for membership in the group under state or federal law.

20         (2)  A purchasing group which violates any applicable

21  provision of the Florida Insurance Code shall be subject to

22  fines and penalties applicable to licensed insurers and agents

23  generally. In addition, any such purchasing group shall be

24  subject to the issuance of a cease and desist order of the

25  office department or an injunction issued by any court of

26  competent jurisdiction prohibiting the soliciting, selling,

27  transacting, or purchasing of insurance or otherwise operating

28  or conducting business in this state.

29         Section 1251.  Subsection (4) of section 627.952,

30  Florida Statutes, is amended to read:

31         627.952  Risk retention and purchasing group agents.--

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 1         (4)  Any person retained or employed to solicit, offer,

 2  sell, or purchase memberships in a purchasing group may be

 3  ordered to cease any such enrollment activity in this state

 4  whenever the office department has reason to believe that any

 5  such purchasing group has liability insurance coverage from a

 6  risk retention group or insurance company which is insolvent

 7  or in a hazardous financial condition.  Orders entered under

 8  this subsection shall be issued in accordance with the

 9  procedures set forth in s. 627.951.

10         Section 1252.  Section 627.954, Florida Statutes, is

11  amended to read:

12         627.954  Rules.--The commission department may

13  establish and from time to time amend such rules relating to

14  risk retention groups and purchasing groups as may be

15  necessary or desirable to carry out the provisions of this

16  part.

17         Section 1253.  Subsections (1), (4), (10), and (11) of

18  section 627.971, Florida Statutes, are amended to read:

19         627.971  Definitions.--As used in this part:

20         (1)(a)  "Financial guaranty insurance" means a surety

21  bond, insurance policy, an indemnity contract issued by an

22  insurer, or any similar guaranty, under which loss is payable

23  upon proof of occurrence of financial loss to an insured

24  claimant, obligee, or indemnitee as a result of:

25         1.  The failure of an obligor on a debt instrument or

26  other monetary obligation, including common or preferred stock

27  guaranteed under a surety bond, insurance policy, or indemnity

28  contract, to make principal, interest, premium, dividend, or

29  purchase price payments when due, if the failure is the result

30  of a financial default or insolvency, whether such obligation

31  

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 1  is incurred directly or as guarantor by or on behalf of

 2  another obligor who also defaulted;

 3         2.  Changes in the levels of interest rates or the

 4  differential in interest rates between various markets or

 5  products;

 6         3.  Changes in the rate of exchange of currency;

 7         4.  Changes in the value of specific assets or

 8  commodities, financial or commodity indices, or price levels

 9  in general; or

10         5.  Other events which the office department determines

11  are substantially similar to any of the foregoing.

12         (b)  However, "financial guaranty insurance" does not

13  include:

14         1.  Insurance of a loss resulting from an event

15  described in paragraph (a), if the loss is payable only upon

16  the occurrence of any of the following, as specified in a

17  surety bond, insurance policy, or indemnity contract:

18         a.  A fortuitous physical event;

19         b.  A failure of or deficiency in the operation of

20  equipment; or

21         c.  An inability to extract or recover a natural

22  resource;

23         2.  An individual or schedule public official bond;

24         3.  A court bond required in connection with judicial,

25  probate, bankruptcy, or equity proceedings, including a

26  waiver, probate, open estate, or life tenant bond;

27         4.  A bond running to a federal, state, county,

28  municipal government, or other political subdivision, as a

29  condition precedent to the granting of a license to engage in

30  a particular business or of a permit to exercise a particular

31  privilege;

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 1         5.  A loss security bond or utility payment indemnity

 2  bond running to a governmental unit, railroad, or charitable

 3  organization;

 4         6.  A lease, purchase and sale, or concessionaire

 5  surety bond;

 6         7.  Credit unemployment insurance on a debtor in

 7  connection with a specific loan or other credit transaction,

 8  to provide payments to a creditor in the event of unemployment

 9  of the debtor for the installments or other periodic payments

10  becoming due while a debtor is unemployed;

11         8.  Credit insurance indemnifying a manufacturer,

12  merchant, or educational institution which extends credit

13  against loss or damage resulting from nonpayment of debts owed

14  to her or him for goods or services provided in the normal

15  course of her or his business;

16         9.  Guaranteed investment contracts that are issued by

17  life insurance companies and that provide that the life

18  insurer will make specified payments in exchange for specific

19  premiums or contributions;

20         10.  Mortgage guaranty insurance as defined in s.

21  635.011(1) or s. 635.021;

22         11.  Indemnity contracts or similar guaranties, to the

23  extent that they are not otherwise limited or proscribed by

24  this part, in which a life insurer guarantees:

25         a.  Its obligations or indebtedness or the obligations

26  or indebtedness of a subsidiary of which it owns more than 50

27  percent, other than a financial guaranty insurance

28  corporation, if:

29         (I)  For any such obligations or indebtedness that are

30  backed by specific assets, such assets are at all times owned

31  by the insurer or the subsidiary; and

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 1         (II)  For the obligations or indebtedness of the

 2  subsidiary that are not backed by specific assets of the life

 3  insurer, the guaranty terminates once the subsidiary ceases to

 4  be a subsidiary; or

 5         b.  The obligations or indebtedness, including the

 6  obligation to substitute assets where appropriate, with

 7  respect to specific assets acquired by a life insurer in the

 8  course of normal investment activities and not for the purpose

 9  of resale with credit enhancement, or guarantees obligations

10  or indebtedness acquired by its subsidiary, provided that the

11  assets so acquired have been:

12         (I)  Acquired by a special purpose entity where the

13  sole purpose is to acquire specific assets of the life insurer

14  or the subsidiary and issue securities or participation

15  certificates backed by such assets; or

16         (II)  Sold to an independent third party; or

17         c.  The obligations or indebtedness of an employee or

18  agent of the life insurer;

19         12.  Any form of surety insurance as defined in s.

20  624.606; or

21         13.  Any other form of insurance covering risks which

22  the office department determines to be substantially similar

23  to any of the foregoing.

24         (4)  "Collateral" means:

25         (a)  Cash;

26         (b)  The market value of investment grade securities,

27  other than securities evidencing an interest in the projects

28  financed with the proceeds of the insured obligations;

29         (c)  The scheduled cash flow from investment grade

30  obligations scheduled to be received on or prior to the date

31  of scheduled debt service on the insured obligation;

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 1         (d)  A conveyance or mortgage of real property; or

 2         (e)  A letter of credit;

 3  

 4  if deposited with or held by the corporation; held in trust by

 5  a trustee, acceptable to the office department, for the

 6  benefit of the corporation; or held in trust, pursuant to the

 7  bond indenture, by a trustee acceptable to the office

 8  department, for the benefit of bondholders in the form of

 9  sinking funds or other reserves which may be used solely for

10  the payment of debt service.

11         (10)  An "investment grade obligation" means an

12  obligation that:

13         (a)  Has been determined to be in one of the top four

14  generic lettered rating classifications by a securities rating

15  agency acceptable to the office department;

16         (b)  Has been identified in writing by such a rating

17  agency as an insurable risk deemed to be of investment grade

18  quality for purposes of insurance;

19         (c)  Has received a "yes" rating by the Securities

20  Valuation Office of the National Association of Insurance

21  Commissioners; or

22         (d)  Has been submitted for review to the appropriate

23  rating agency or Securities Valuation Office and will be

24  qualified pursuant to paragraph (a), paragraph (b), or

25  paragraph (c).

26         (11)  "Letter of credit" means:

27         (a)  The stated amount of a clean unconditional,

28  irrevocable letter of credit issued by a bank or trust company

29  whose debt rating applicable to the term of the insured

30  obligation is in one of the two highest generic lettered

31  

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 1  rating classifications by a securities rating agency

 2  acceptable to the office department; or

 3         (b)  Fifty percent of the stated amount of a clean

 4  unconditional, irrevocable letter of credit issued by a bank

 5  or trust company whose debt rating applicable to the term of

 6  the insured obligation is in a rating classification other

 7  than as set forth in paragraph (a).

 8         (c)  An issuing or confirming bank referred to in

 9  paragraph (a) or paragraph (b) shall be:

10         1.  Determined by the Securities Valuation office of

11  the National Association of Insurance Commissioners to meet

12  such standards of financial condition and standing as are

13  considered necessary and appropriate to regulate the quality

14  of banks and trust companies whose letters of credit shall be

15  acceptable to insurance regulatory authorities; provided, that

16  the letter of credit is issued for the full term of the

17  insured obligation, or the insured obligation is subject to

18  mandatory call and redemption from the proceeds of the letter

19  of credit if the letter of credit is not renewed or replaced;

20  and

21         2.a.  A member of the federal reserve system or

22  chartered by a state of the United States; or

23         b.  Organized and existing under the laws of a foreign

24  country whose sovereign debt is rated in the highest major

25  rating classification by a securities rating agency acceptable

26  to the office department; and which has been licensed as a

27  domestic branch or agency by the Federal Government or a state

28  of the United States; and which is regulated, supervised, and

29  examined by United States federal or state authorities having

30  regulatory authority over banks and trust companies.

31  

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 1         Section 1254.  Paragraph (b) of subsection (1),

 2  paragraph (d) of subsection (3), and subsections (4) and (5)

 3  of section 627.972, Florida Statutes, are amended to read:

 4         627.972  Organization; financial requirements.--

 5         (1)  A financial guaranty insurance corporation must be

 6  organized and licensed in the manner prescribed in this code

 7  for stock property and casualty insurers except that:

 8         (b)1.  Prior to the issuance of a license, a

 9  corporation must submit to the office department for approval,

10  a plan of operation detailing:

11         a.  The types and projected diversification of

12  guaranties to be issued;

13         b.  The underwriting procedures to be followed;

14         c.  The managerial oversight methods;

15         d.  The investment policies; and

16         e.  Any other matters prescribed by the office

17  department;

18         2.  An insurer which is writing only the types of

19  insurance allowed under this part on July 1, 1988, and

20  otherwise meets the requirements of this part, is exempt from

21  the requirements of this paragraph.

22         (3)  An insurer may not transact financial guaranty

23  insurance unless it establishes a contingency reserve, net of

24  reinsurance, as follows:

25         (d)  Withdrawals from the contingency reserve, to the

26  extent of any excess, may be made with the approval of the

27  office department from the earliest contributions to the

28  reserve remaining therein:

29         1.  In any year in which the actual incurred losses

30  exceed 35 percent of earned premiums, or

31  

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 1         2.  If the contingency reserve has been in existence

 2  for 40 quarters for reserves subject to subparagraph (b)1.,

 3  and 20 quarters for reserves subject to subparagraph (b)2.,

 4  upon demonstration that the amount carried is excessive in

 5  relation to the insurer's outstanding obligations.

 6         (4)  In addition to the contingency reserve, the case

 7  basis method or other method prescribed by the office

 8  department is used to determine loss reserves, in a manner

 9  consistent with the requirements of part I of chapter 625,

10  which must include a reserve for claims reported and unpaid

11  net of collateral.  A deduction from loss reserves shall be

12  allowed for the time value of money by application of a

13  discount rate equal to the average rate of return on the

14  admitted assets of the insurer as of the date of the

15  computation of any such reserve. The discount rate must be

16  adjusted at the end of each calendar year.

17         (5)  The insurer maintains an unearned premium reserve,

18  net of reinsurance, computed on the monthly pro rata basis,

19  where the premiums are paid on an installment basis.  All

20  other such premiums paid must be earned proportionately with

21  the expiration of exposure or by such other method the office

22  department prescribes or approves.

23         Section 1255.  Section 627.973, Florida Statutes, is

24  amended to read:

25         627.973  Limitations.--

26         (1)  Financial guaranty insurance shall be transacted

27  in this state only by a corporation licensed for such purpose,

28  except that a property and casualty insurer transacting

29  business pursuant to the provisions of this code may transact

30  financial guaranty insurance in this state if the following

31  conditions are met:

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 1         (a)  Total policyholders' surplus exceeds $100 million;

 2         (b)  Not more than 20 percent of total net premiums

 3  written are applicable to or for financial guaranty insurance;

 4         (c)  The provisions of this part are applied to the

 5  insurer's financial guaranty insurance business;

 6         (d)  Not more than 20 percent of the insurer's total

 7  policyholder's surplus is applied toward meeting the

 8  provisions of this part;

 9         (e)  The policyholders' surplus once utilized to meet

10  the requirements of this part shall not be available for

11  meeting any policyholders' surplus requirements for any other

12  type of insurance;

13         (f)  The insurer is licensed to write financial

14  guaranty insurance; and

15         (g)  Unless the insurer is transacting financial

16  guaranty insurance prior to July 1, 1988, and otherwise meets

17  the requirements of this section, prior to the issuance of a

18  license, the insurer must submit to the office department for

19  approval, a plan of operation complying with s. 627.972(1)(b).

20         (2)  Financial guaranty insurance shall be written only

21  to insure obligations defined in s. 627.971(1)(a)1., except

22  that obligations defined in s. 627.971(1)(a)2., 3., 4., and 5.

23  may be written with the prior written approval of the office

24  department pursuant to limitations and restrictions

25  promulgated by rule that the commission department deems

26  appropriate and necessary to protect the policyholders of the

27  insurer.

28         (3)  At least 95 percent of the outstanding total

29  liability on municipal obligation bonds of an insurer

30  transacting financial guaranty insurance must be investment

31  grade.

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 1         (4)  An insurer transacting financial guaranty

 2  insurance must at all times maintain capital, surplus, and

 3  contingency reserves, subject to the restrictions in paragraph

 4  (1)(d) if applicable, in the aggregate no less than the sum

 5  of:

 6         (a)  One-third of one percent of the total liabilities

 7  outstanding under guaranties of municipal obligation bonds;

 8         (b)  One percent of the total liabilities outstanding

 9  under guaranties of investment grade obligations, including

10  industrial development bonds and investment grade consumer

11  debt obligations;

12         (c)  One and one-third percent of the total liabilities

13  outstanding under guaranties of noninvestment grade consumer

14  debt obligations;

15         (d)  Two percent of the total liabilities outstanding

16  under guaranties of other obligations not of investment grade,

17  other than consumer debt obligations; and

18         (e)  Surplus determined by the office department to be

19  adequate to support the writing of residual value insurance,

20  surety insurance, and credit insurance, if the corporation has

21  elected to transact these kinds of insurance pursuant to s.

22  627.972(1).

23         (5)  An insurer transacting financial guaranty

24  insurance must limit its exposure to loss, net of collateral

25  and reinsurance, as follows:

26         (a)  For municipal bonds:

27         1.  The insured average annual debt service with

28  respect to any one entity and backed by a single revenue

29  source may not exceed 10 percent of the aggregate of the

30  corporation's capital, surplus, and contingency reserves,

31  

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 1  subject to the restrictions of paragraph (1)(d) if applicable;

 2  and

 3         2.  The insured unpaid principal issued by a single

 4  entity and backed by a single revenue source may not exceed 75

 5  percent of the aggregate of the corporation's capital,

 6  surplus, and contingency reserves, subject to the restrictions

 7  in paragraph (1)(d) if applicable; and

 8         (b)  For all other financial guaranties, the insured

 9  unpaid principal for any one risk may not exceed 10 percent of

10  the aggregate of the corporation's capital, surplus, and

11  contingency reserves, subject to the restrictions in paragraph

12  (1)(d) if applicable.  Single risk liability shall be defined

13  with respect to any one issuer, except that, if the risk is

14  payable from a specified revenue source or adequately secured

15  by loan obligations or other assets, such risk shall be

16  defined by the revenue source.

17         (6)  If the exposure to loss of an insurer transacting

18  financial guaranty insurance exceeds the limitations in

19  subsection (4), it may not transact any new financial guaranty

20  insurance business until its exposure to loss no longer

21  exceeds those limitations.

22         (7)  An insurer which wrote financial guaranty

23  insurance in this state during the 12-month period immediately

24  preceding July 1, 1988, but which does not meet the

25  requirements of subsection (1) or of s. 627.972(2), may,

26  nevertheless, continue to write financial guaranty insurance

27  as authorized by subsection (2) after July 1, 1988, subject to

28  all other provisions of this part, provided:

29         (a)  Within 45 days after such date the insurer files

30  with the office department a statement of its intentions to

31  limit its writings to financial guaranty, surety, and fidelity

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 1  insurance.  Effective upon such filing, the insurer shall be

 2  subject to the requirements of this part except that the

 3  surplus to policyholders requirement of s. 627.972(2) shall

 4  not apply to such insurer until July 1, 1998, at which time

 5  such insurer shall have and thereafter maintain the minimum

 6  surplus requirement of at least $35 million.  Failure of the

 7  insurer to meet the conditions of such statement of intent

 8  filed with the office department, until such time as it meets

 9  the requirements of subsection (1), shall be grounds to

10  subject the insurer to the penalties provided under this code,

11  including immediate suspension or revocation of its

12  certificate of authority. If the insurer does not file such

13  statement of intent, it shall cease writing any new financial

14  guaranty insurance business within 6 months after the

15  effective date of this act. The insurer may:

16         1.  Reinsure its net in-force business with a licensed

17  financial guaranty insurance corporation or an insurer exempt

18  under subsection (1);

19         2.  Subject to the prior approval of its domiciliary

20  insurance commissioner, reinsure all or part of its net

21  in-force business pursuant to s. 627.975(1)(b), except that

22  subparagraphs 2. and 4. do not apply. The assuming insurer

23  must maintain reserves for the reinsured business in the

24  manner applicable to the ceding insurer under paragraph (b);

25  or

26         3.  May continue the risks in force and, with 30 days

27  prior written notice to its domiciliary insurance

28  commissioner, write new financial guaranty policies if the

29  writing of those policies is reasonably prudent to mitigate

30  either the amount of or possibility of loss in connection with

31  business written prior to July 1, 1988.  However, an insurer

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 1  must receive the prior approval of its domiciliary insurance

 2  commissioner before writing any new financial guaranty

 3  insurance policies that would increase its risk of loss.

 4         (b)  Must, for all guaranties in force prior to July 1,

 5  1988, including those which fall under the definition of

 6  financial guaranty insurance, maintain the reserves applicable

 7  for municipal bond guaranties in effect prior to July 1, 1988.

 8  If the insurer's contingency reserves maintained as of July 1,

 9  1988, are less than those required for municipal bond

10  guaranties, the insurer has 3 years to bring its reserves into

11  compliance, except that a part of the reserve may be released

12  proportional to the reduction in net total liabilities

13  resulting from reinsurance if the reinsurer, on the effective

14  date of the reinsurance, establishes a reserve in an amount

15  equal to the amount released and except that a part of the

16  reserve may be released with office departmental approval,

17  upon demonstration that the amount carried is excessive in

18  relation to the corporation's outstanding obligations.

19         (c)  Shall be subject to the reserve requirements

20  applicable to financial guaranty insurance corporations, for

21  business written on or after July 1, 1988.

22         (d)  This subsection shall not apply to insurers

23  permitted to write financial guaranty insurance pursuant to

24  the exception set forth in subsection (1) and such insurers

25  may write financial guaranty insurance subject to the

26  requirements of the Florida Insurance Code.

27         Section 1256.  Section 627.974, Florida Statutes, is

28  amended to read:

29         627.974  Filing of policy forms and rates.--

30         (1)  Policy forms and any amendments thereto must be

31  filed with the office department within 30 days after their

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 1  use by the insurer.  A policy may not provide coverage of the

 2  acceleration of payments due under the guaranteed obligations,

 3  including any payment in advance of scheduled maturity to be

 4  made by the issuer of the guaranteed obligations at the sole

 5  option of the owner of the guaranteed obligations, unless the

 6  acceleration is at the sole option of the insurer.  Each

 7  policy must disclose that the insurance provided by the policy

 8  is not covered by the Florida Insurance Guaranty Association

 9  created under part II of chapter 631.  The commission

10  department may prescribe additional minimum policy provisions

11  which are determined by the commission department to be

12  necessary or appropriate to protect policyholders, claimants,

13  obligees, or indemnitees.

14         (2)  Rates may not be excessive, inadequate, unfairly

15  discriminatory, destructive of competition, or detrimental to

16  the solvency of the insurer.

17         (3)  Criteria and guidelines used by insurers

18  transacting financial guaranty insurance in establishing

19  rating categories and ranges of rates to be used must be filed

20  with the office department for information prior to their use

21  by the insurer.

22         (4)  All such filings must be available for public

23  inspection at the office department.

24         (5)  This section is in lieu of the requirements of ss.

25  627.062 and 627.410.

26         Section 1257.  Section 627.986, Florida Statutes, is

27  amended to read:

28         627.986  Replacement rules.--Group-to-group

29  consolidations shall be exempt from any rule of the commission

30  department relating to the replacement of existing life or

31  health insurance. Nothing in this part shall be interpreted as

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 1  creating an exemption for consolidations which involve

 2  individual policies.

 3         Section 1258.  Section 627.987, Florida Statutes, is

 4  amended to read:

 5         627.987  Policy forms.--No policy or group certificate

 6  of mortgage insurance used in connection with any

 7  consolidation, and no application, endorsement, or rider which

 8  becomes a part of any such policy or certificate, shall be

 9  issued or delivered in this state until a copy of the form has

10  been filed with and approved by the office department.

11         Section 1259.  Section 628.051, Florida Statutes, is

12  amended to read:

13         628.051  Application for permit to form insurer;

14  contents; fee.--

15         (1)  No domestic insurer shall be formed unless the

16  persons so proposing have received a permit from the office

17  department.

18         (2)  Written application for such permit shall be filed

19  with the office department. Such application and filing shall

20  include:

21         (a)  The name, type, and purpose of insurer.

22         (b)  The name, residence address, business background,

23  and qualifications of each person associated or to be

24  associated in the formation or financing of the insurer. Each

25  such person with an ownership interest of 10 percent or more,

26  or who will hold a position as an officer or director, must

27  furnish on forms adopted by the commission and supplied by the

28  office department a sworn biographical statement, legible

29  copies of fingerprints, and authority for release of

30  information in regard to the investigation of such person's

31  background.

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 1         (c)  A full disclosure of the terms of all

 2  understandings and agreements existing or proposed among

 3  persons so associated relative to the insurer, or the

 4  formation or financing thereof, accompanied by a copy of each

 5  such agreement or understanding.

 6         (d)  A full disclosure of the terms of all

 7  understandings and agreements existing or proposed for

 8  management or exclusive agency contracts.

 9         (e)  A copy of all proposed articles or certificates of

10  incorporation and proposed bylaws of the proposed insurer.

11         (f)  A copy of all articles or certificates of

12  incorporation of involved corporations, if a copy of the same

13  is not already on file in the office department.

14         (g)  A copy of all syndicate, association, firm,

15  partnership, organization, or other similar agreements, by

16  whatever name called, involved in the formation of the

17  proposed insurer or its financing.

18         (h)  If the applicant is a reciprocal insurer, a copy

19  of the power of attorney and of other agreements existing or

20  proposed as affecting investors, subscribers, the attorney in

21  fact, or the applicant.

22         (i)  A copy of any security, or of any proposed

23  document evidencing any right or interest, proposed to be

24  offered.

25         (j)  Such other pertinent information and documents as

26  reasonably requested by the commission or office department.

27         (3)  The application shall be accompanied by the filing

28  fee specified in s. 624.501.

29         Section 1260.  Section 628.061, Florida Statutes, is

30  amended to read:

31  

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 1         628.061  Investigation of proposed organization.--In

 2  connection with any proposal to incorporate a domestic

 3  insurer, the office department shall make an investigation of:

 4         (1)  The character, reputation, financial standing, and

 5  motives of the organizers, incorporators, and subscribers

 6  organizing the proposed insurer.

 7         (2)  The character, financial responsibility, insurance

 8  experience, and business qualifications of its proposed

 9  officers.

10         (3)  The character, financial responsibility, business

11  experience, and standing of the proposed stockholders and

12  directors.

13         Section 1261.  Section 628.071, Florida Statutes, is

14  amended to read:

15         628.071  Granting, denial of permit.--

16         (1)  The office department shall expeditiously examine

17  and investigate the application for a permit as referred to in

18  s. 628.051.  If the office department finds that:

19         (a)  The application is complete;

20         (b)  The documents therewith filed are in compliance

21  with law;

22         (c)  None of the stockholders, organizers,

23  incorporators, subscribers, and other persons who directly or

24  indirectly exercise or have the ability to exercise effective

25  control of the proposed insurer or who will be involved in its

26  management have been found guilty of, or have pleaded guilty

27  or nolo contendere to, a felony or a crime punishable by

28  imprisonment of 1 year or more under the law of the United

29  States or any state thereof, or under the law of any other

30  country, which involves moral turpitude, without regard to

31  

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 1  whether a judgment of conviction has been entered by the court

 2  having jurisdiction of such cases;

 3         (d)  The proposed financial structure is adequate; and

 4         (e)  All stockholders, organizers, incorporators,

 5  subscribers, and other persons who directly or indirectly

 6  exercise or have the ability to exercise effective control of

 7  the proposed insurer or who will be involved in management of

 8  the proposed insurer possess the financial standing and

 9  business experience to form an insurer;

10  

11  it shall issue to the applicant a permit to form the proposed

12  insurer.

13         (2)  If the office department does not so find, or

14  finds that the insurer if formed or financed would not be able

15  to qualify for or retain a certificate of authority by reason

16  of the provisions of s. 624.404(3), a permit shall not be

17  granted.

18         (3)  A permit granted under the provisions of this

19  section shall be valid for 1 year from the date of issue, and

20  during any extension of such period, not to exceed an

21  additional year, as may be authorized by the office department

22  upon cause shown. The articles of incorporation and all other

23  proceedings thereunder shall become void 1 year from the issue

24  date of such permit or upon the expiration of such extended

25  period, unless the formation of the proposed insurer has been

26  completed and a certificate of authority has been issued by

27  the office department.

28         Section 1262.  Section 628.091, Florida Statutes, is

29  amended to read:

30         628.091  Filing, approval of articles of

31  incorporation.--

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 1         (1)  No domestic stock or mutual insurer shall be

 2  formed unless its articles of incorporation are approved by

 3  the office department prior to filing the same with and

 4  approval by the Department of State as provided by law.

 5         (2)  The incorporators shall file the triplicate

 6  originals of the articles of incorporation with the office

 7  department, accompanied by the filing fee specified in s.

 8  624.501.

 9         (3)  The office department shall promptly examine the

10  articles of incorporation.  If it finds that the articles of

11  incorporation conform to law, and that a permit has been or

12  will be issued, it shall endorse its approval on each of the

13  triplicate originals of the articles of incorporation, retain

14  one copy for its files, and return the remaining copies to the

15  incorporators for filing with the Department of State.

16         (4)  If the office department does not so find, it

17  shall refuse to approve the articles of incorporation and

18  shall return the originals.

19         Section 1263.  Section 628.101, Florida Statutes, is

20  amended to read:

21         628.101  Amendment of certificate of incorporation;

22  stock insurer.--A domestic stock insurer shall not amend its

23  certificate of incorporation until a copy of the proposed

24  amendment has been filed with and approved by the office

25  department. The office department shall promptly examine any

26  such proposed amendment and shall approve the same unless it

27  finds that the proposed amendment does not comply with law.

28         Section 1264.  Subsections (2) and (3) of section

29  628.111, Florida Statutes, are amended to read:

30         628.111  Amendment of articles of incorporation; mutual

31  insurer.--

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 1         (2)(a)  Upon adoption of the amendment, the insurer

 2  shall make in triplicate under its corporate seal a

 3  certificate thereof, setting forth the amendment and the date

 4  and manner of the adoption thereof, which certificate shall be

 5  executed by the insurer's president or vice president and

 6  secretary or assistant secretary and acknowledged before an

 7  officer authorized to take acknowledgments. The insurer shall

 8  deliver the triplicate originals of the certificate to the

 9  office department, together with the filing fee specified in

10  s. 624.501.

11         (b)  The office department shall promptly examine the

12  certificate of amendment; and, if it finds that the

13  certificate and the amendment comply with law, it shall

14  endorse its approval upon each of the triplicate originals,

15  place one on file in its office, and return the remaining sets

16  to the insurer.  The insurer shall forthwith file such

17  endorsed certificates of amendment with the Department of

18  State.  The amendment shall be effective when filed with and

19  approved by the Department of State.

20         (3)  If the office department finds that the proposed

21  amendment or certificate does not comply with the law, it

22  shall not approve the same, and shall return the triplicate

23  certificate of amendment to the insurer.

24         Section 1265.  Subsections (1) and (3) of section

25  628.152, Florida Statutes, are amended to read:

26         628.152  Domestic stock insurers; proxies, consents,

27  and authorizations with respect to any voting security.--

28         (1)  The commission department may, by rule, prescribe

29  the form, content, and manner of solicitation of any proxy,

30  consent, or authorization with respect to any voting security

31  issued by a domestic stock insurer, as may be necessary or

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 1  appropriate in the public interest or for the proper

 2  protection of investors in the voting securities issued by

 3  such insurer or to ensure the fair dealing in such voting

 4  securities.

 5         (3)  Any proxy or consent obtained in violation of this

 6  section is void.  The domestic stock insurer, any stockholder

 7  of record, or the office department may enforce compliance

 8  with this section, by an appropriate civil action.

 9         Section 1266.  Subsection (6) of section 628.161,

10  Florida Statutes, is amended to read:

11         628.161  Initial qualifications; mutuals.--

12         (6)  A self-insured fund organized under s. 624.4621 s.

13  440.57 and holding a certificate of authority as a

14  self-insurer's fund on December 31, 1993, may become a mutual

15  insurer under this part, pursuant to a plan of reorganization

16  approved by the office department. A plan of reorganization

17  must be approved by the office department if:

18         (a)  The self-insurer's fund has sufficient financial

19  resources to satisfy all of its obligations under all policies

20  and coverages afforded by the fund before the reorganization

21  and has sufficient financial resources to satisfy all of its

22  other liabilities;

23         (b)  The self-insurer's fund has a minimum of $5

24  million of surplus;

25         (c)  The self-insurer's fund submits a plan that

26  demonstrates its ability to satisfy the requirements of this

27  chapter pertaining to mutual insurers on an ongoing basis; and

28         (d)  The mutual insurer resulting from the

29  reorganization of the self-insurer's fund retains ownership of

30  all of the assets of the self-insurer's fund, retains all of

31  the liabilities of the self-insurer's fund, and agrees to hold

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 1  all fund members harmless from any assessment for liabilities

 2  of the self-insurer's fund before the date of reorganization.

 3  

 4  Upon approval of the plan by the office department, any

 5  contingent liability of the members or former members of the

 6  self-insurer's fund for assessment for losses of the

 7  self-insurer's fund is considered satisfied, and all liability

 8  for any such contingent assessment is extinguished as of the

 9  date the self-insurer's fund becomes an authorized mutual

10  insurer and retains all of the assets and liabilities of the

11  self-insurer's fund.

12         Section 1267.  Section 628.171, Florida Statutes, is

13  amended to read:

14         628.171  Formation of mutual insurer; bond.--The

15  incorporators of the proposed insurer shall file with the

16  office department a copy of a fidelity bond or insurance

17  policy providing coverage in an amount equal to not less than

18  10 percent of the funds handled annually and issued in the

19  name of the insurer covering its directors, employees,

20  administrator, or other individuals managing or handling the

21  funds or assets of the insurer.  In no case may such bond or

22  policy be less than $1,000 or more than $500,000.

23         Section 1268.  Subsection (3) of section 628.221,

24  Florida Statutes, is amended to read:

25         628.221  Bylaws of mutual insurer.--

26         (3)  The insurer shall promptly file with the office

27  department a copy, certified by the insurer's secretary, of

28  its bylaws and of every modification thereof or addition

29  thereto. The office department shall disapprove any bylaw

30  provision deemed by it to be unlawful, unreasonable,

31  inadequate, unfair, or detrimental to the proper interests or

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 1  protection of the insurer's members or any class thereof.  The

 2  insurer shall not, after receiving written notice of such

 3  disapproval and during the existence thereof, effectuate any

 4  bylaw provision so disapproved.

 5         Section 1269.  Subsections (1) and (3) of section

 6  628.251, Florida Statutes, are amended to read:

 7         628.251  Management and exclusive agency contracts.--

 8         (1)  No domestic mutual insurer or stock insurer shall

 9  make any contract whereby any person is granted or is to enjoy

10  in fact the management of the insurer to the substantial

11  exclusion of its board of directors or to have the controlling

12  or preemptive right to produce substantially all insurance

13  business for the insurer, unless the contract is filed with

14  and approved by the office department.

15         (3)  The office department shall disapprove any such

16  contract if it finds that it:

17         (a)  Subjects the insurer to excessive charges; or

18         (b)  Is to extend for an unreasonable length of time;

19  or

20         (c)  Does not contain fair and adequate standards of

21  performance; or

22         (d)  Contains other inequitable provision or provisions

23  which impair the proper interests of policyholders or members

24  of the insurer.

25         Section 1270.  Subsection (1) of section 628.255,

26  Florida Statutes, is amended to read:

27         628.255  Person with effective control cannot receive

28  commission unless contract approved; penalties.--

29         (1)  No director, officer, or other person having

30  effective control of a domestic insurer shall receive, and no

31  such insurer shall pay to such person, a commission or other

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 1  compensation with respect to particular risks insured by the

 2  insurer, unless such commission or other compensation is paid

 3  pursuant to a contract filed with and approved by the office

 4  department.

 5         Section 1271.  Section 628.261, Florida Statutes, is

 6  amended to read:

 7         628.261  Notice of change of director or officer.--An

 8  insurer shall give the office department written notice of any

 9  change of personnel among the directors or principal officers

10  of the insurer within 45 days of such change. The written

11  notice shall include all information necessary to allow the

12  office department to determine that the insurer will be in

13  compliance with s. 624.404(3) and at a minimum shall contain

14  the information required by s. 628.051(2)(b), (c), and (d).

15         Section 1272.  Subsections (1) and (3) of section

16  628.271, Florida Statutes, are amended to read:

17         628.271  Office and records; penalty for unlawful

18  removal of records.--

19         (1)  Every domestic insurer shall have an  office in

20  this state and shall keep therein complete records of its

21  assets, transactions, and affairs, specifically including:

22         (a)  Financial records;

23         (b)  Corporate records;

24         (c)  Reinsurance documents;

25         (d)  Access to all accounting transactions and access

26  in this state, upon demand by the office department, to all

27  original accounting documents;

28         (e)  Claim files; and

29         (f)  Payment of claims,

30  

31  

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 1  in accordance with such methods and systems as are customary

 2  or suitable as to the kind or kinds of insurance transacted.

 3         (3)  The removal of all or a material part of the

 4  records or assets of a domestic insurer from this state except

 5  pursuant to a plan of merger or consolidation approved by the

 6  office department under this code or for such reasonable

 7  purposes and periods of time as may be approved by the office

 8  department in writing in advance of such removal, or the

 9  concealment of such records or assets or material part thereof

10  from the office department, is prohibited. Any person who

11  removes or attempts to remove such records or assets or such

12  material part thereof from the home office or other place of

13  business or of safekeeping of the insurer in this state with

14  the intent to remove the same from this state, or who conceals

15  or attempts to conceal the same from the office department, in

16  violation of this subsection, is guilty of a felony of the

17  third degree, punishable as provided in s. 775.082, s.

18  775.083, or s. 775.084. Upon any removal or attempted removal

19  of such records or assets or upon retention of such records or

20  assets or material part thereof outside this state, beyond the

21  period therefor specified in the consent of the office

22  department under which consent the records were so removed

23  thereat, or upon concealment of or attempt to conceal records

24  or assets in violation of this section, the office department

25  may institute delinquency proceedings against the insurer

26  pursuant to the provisions of chapter 631.

27         Section 1273.  Subsection (1) of section 628.281,

28  Florida Statutes, is amended to read:

29         628.281  Exceptions to requirement that office,

30  records, and assets be maintained in this state.--

31  

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 1         (1)  The provisions of s. 628.271 shall not be deemed

 2  to prohibit or prevent an insurer from:

 3         (a)  Establishing and maintaining branch offices or

 4  regional home offices in other states where necessary or

 5  convenient to the transaction of its business and keeping

 6  therein the detailed records and assets customary and

 7  reasonably necessary for the servicing of its insurance in

 8  force and affairs in the territory served by such an office,

 9  as long as such records and assets are made readily available

10  at such office for examination by the Office of Insurance

11  Regulation department at its request.

12         (b)  Having, depositing, or transmitting funds and

13  assets of the insurer in or to jurisdictions outside this

14  state as required by other jurisdictions as a condition of

15  transacting insurance in such jurisdictions reasonably and

16  customarily required in the regular course of its business.

17         (c)  Establishing and maintaining its principal

18  operations offices, its usual operations records, and such of

19  its assets as may be necessary or convenient for the purpose,

20  in another state in which the insurer is authorized to

21  transact insurance in order that general administration of its

22  affairs may be combined with that of an affiliated insurer or

23  insurers, but subject to the following conditions:

24         1.  That the office department consent in writing to

25  such removal of offices, records, and assets from this state

26  upon evidence satisfactory to it that the same will facilitate

27  and make more economical the operations of the insurer and

28  will not unreasonably diminish the service or protection

29  thereafter to be given the insurer's policyholders in this

30  state and elsewhere;

31  

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 1         2.  That the insurer will continue to maintain in this

 2  state its principal corporate office or place of business, and

 3  maintain therein available to the inspection of the office

 4  department complete records of its corporate proceedings and a

 5  copy of each financial statement of the insurer current within

 6  the preceding 5 years, including a copy of each interim

 7  financial statement prepared for the information of the

 8  insurer's officers or directors;

 9         3.  That, upon the written request of the office

10  department, the insurer will with reasonable promptness

11  produce at its principal corporate offices in this state for

12  examination or for subpoena its records or copies thereof

13  relative to a particular transaction or transactions of the

14  insurer as designated by the office department in its request;

15  and

16         4.  That, if at any time the office department finds

17  that the conditions justifying the maintenance of such

18  offices, records, and assets outside this state no longer

19  exist, or that the insurer has willfully and knowingly

20  violated any of the conditions stated in subparagraphs 2. and

21  3., the office department may order the return of such

22  offices, records, and assets to this state within such

23  reasonable time, not less than 6 months, as may be specified

24  in the order; and that for failure to comply with such order,

25  as thereafter modified or extended, if any, the office

26  department shall suspend or revoke the insurer's certificate

27  of authority.

28         Section 1274.  Subsection (1) of section 628.341,

29  Florida Statutes, is amended to read:

30         628.341  Nonassessable policies; mutual insurers.--

31  

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 1         (1)  While possessing surplus funds in amount not less

 2  than the paid-in capital stock required of a domestic stock

 3  insurer transacting like kinds of insurance, a domestic mutual

 4  insurer may, upon receipt of the order of the office

 5  department so authorizing, extinguish the contingent liability

 6  of its members as to all its policies in force and may omit

 7  provisions imposing contingent liability in all its policies

 8  currently issued so long as such surplus funds meet such

 9  requirement as to amount.

10         Section 1275.  Section 628.351, Florida Statutes, is

11  amended to read:

12         628.351  Nonassessable policies; revocation of

13  authority of mutual insurer.--The office department shall

14  revoke the authority of a domestic mutual insurer to issue

15  policies without contingent liability if at any time the

16  insurer's assets are less than the sum of its liabilities and

17  the surplus required for such authority, or if the insurer, by

18  resolution of its board of directors approved by a majority of

19  its members, requests that the authority be revoked. During

20  the absence of such authority, the insurer shall not issue any

21  policy without providing therein for the contingent liability

22  of the policyholder, nor renew any policy which is renewable

23  at the option of the insurer without endorsing the same to

24  provide for such contingent liability.  Such renewal or

25  endorsement shall bear conspicuously on its face the provision

26  for contingent liability of the policyholder.

27         Section 1276.  Section 628.371, Florida Statutes, is

28  amended to read:

29         628.371  Dividends to stockholders.--

30         (1)  A domestic stock insurer shall not pay any

31  dividend or distribute cash or other property to stockholders

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 1  except out of that part of its available and accumulated

 2  surplus funds which is derived from realized net operating

 3  profits on its business and net realized capital gains.

 4         (2)  Dividend payments or distributions to

 5  stockholders, without prior written approval of the office

 6  department, shall not exceed the larger of:

 7         (a)  The lesser of 10 percent of surplus or net gain

 8  from operations (life and health companies) or net income

 9  (property and casualty companies), not including realized

10  capital gains, plus a 2-year carryforward for property and

11  casualty companies;

12         (b)  Ten percent of surplus, with dividends payable

13  constrained to unassigned funds minus 25 percent of unrealized

14  capital gains;

15         (c)  The lesser of 10 percent of surplus or net

16  investment income (net gain before capital gains for life and

17  health companies) plus a 3-year carryforward (2-year

18  carryforward for life and health companies) with dividends

19  payable constrained to unassigned funds minus 25 percent of

20  unrealized capital gains.

21         (3)  In lieu of the provisions in subsection (2), an

22  insurer may pay a dividend or make a distribution without the

23  prior written approval of the office department when:

24         (a)  The dividend is equal to or less than the greater

25  of:

26         1.  Ten percent of the insurer's surplus as to

27  policyholders derived from realized net operating profits on

28  its business and net realized capital gains; or

29         2.  The insurer's entire net operating profits and

30  realized net capital gains derived during the immediately

31  preceding calendar year; and

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 1         (b)  The insurer will have surplus as to policyholders

 2  equal to or exceeding 115 percent of the minimum required

 3  statutory surplus as to policyholders after the dividend or

 4  distribution is made; and

 5         (c)  The insurer has filed notice with the office

 6  department at least 10 business days prior to the dividend

 7  payment or distribution, or such shorter period of time as

 8  approved by the office department on a case-by-case basis.

 9  Such notice shall not create a right in the office department

10  to approve or disapprove a dividend otherwise properly payable

11  hereunder; and

12         (d)  The notice includes a certification by an officer

13  of the insurer attesting that after payment of the dividend or

14  distribution the insurer will have at least 115 percent of

15  required statutory surplus as to policyholders.

16         (4)  The office department shall not approve a dividend

17  or distribution in excess of the maximum amount allowed in

18  subsection (1) unless, considering the following factors, it

19  determines that the distribution or dividend would not

20  jeopardize the financial condition of the insurer:

21         (a)  The liquidity, quality, and diversification of the

22  insurer's assets and the effect on its ability to meet its

23  obligations.

24         (b)  Reduction of investment portfolio and investment

25  income.

26         (c)  Effects on the written premium to surplus ratios

27  as required by the Florida Insurance Code.

28         (d)  Industrywide financial conditions.

29         (e)  Prior dividend distributions of the insurer.

30         (f)  Whether the dividend is only a "pass-through"

31  dividend from a subsidiary of the insurer.

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 1         Section 1277.  Subsection (3) of section 628.391,

 2  Florida Statutes, is amended to read:

 3         628.391  Illegal dividends; penalty.--

 4         (3)  The office department may revoke or suspend the

 5  certificate of authority of an insurer which has declared or

 6  paid such an illegal dividend.

 7         Section 1278.  Subsections (3) and (4) of section

 8  628.401, Florida Statutes, are amended to read:

 9         628.401  Borrowed surplus.--

10         (3)  Any such loan to a domestic stock or mutual

11  insurer shall be subject to the approval of the office

12  department for the issue and the rate of interest to be paid.

13  The insurer shall, in advance of the loan, file with the

14  office department a statement of the purpose of the loan and a

15  copy of the proposed loan agreement. The office department

16  shall disapprove any proposed loan or agreement if it finds

17  that the loan is unnecessary or excessive for the purpose

18  intended; that the terms of the loan agreement are not fair

19  and equitable to the parties and to other similar lenders, if

20  any, to the insurer; or that the information so filed by the

21  insurer is inadequate.

22         (4)  Any such loan to a domestic stock or mutual

23  insurer, or a substantial portion thereof, shall be repaid by

24  the insurer when no longer reasonably necessary for the

25  purpose originally intended.  No repayment of such a loan

26  shall be made by a domestic stock or mutual insurer unless

27  approved in advance by the office department.

28         Section 1279.  Subsections (1) and (4) of section

29  628.411, Florida Statutes, are amended to read:

30         628.411  Impairment of capital or assets.--

31  

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 1         (1)  If a domestic stock insurer's capital, as

 2  represented by the aggregate par value of its outstanding

 3  capital stock, becomes impaired, or if the assets of a mutual

 4  insurer are less than the sum of its liabilities and the

 5  minimum amount of surplus required to be maintained by it, the

 6  office department shall at once determine the amount of

 7  deficiency and serve notice upon the insurer to make good the

 8  deficiency within 90 days after service of such notice.

 9         (4)  If the deficiency is not made good and proof

10  thereof filed with the office department within such 90-day

11  period, the insurer shall be deemed insolvent and the office

12  department shall institute delinquency proceedings against it

13  under chapter 631; except that if such deficiency exists

14  because of increased loss reserves required by the office

15  department, or because of disallowance by the office

16  department of certain assets or reduction of the value at

17  which carried in the insurer's accounts, the office department

18  may, in its discretion and upon application and good cause

19  shown, and if it finds that the establishment or maintenance

20  of such inadequate reserves or overvalued assets was not

21  willful on the part of the insurer, extend for not more than

22  an additional 60 days the period within which such deficiency

23  may be so made good and such proof thereof so filed.

24         Section 1280.  Subsection (1) of section 628.421,

25  Florida Statutes, is amended to read:

26         628.421  Assessment of stockholders or members.--

27         (1)  Any insurer receiving the notice of the office

28  department mentioned in s. 628.411(1):

29         (a)  If a stock insurer, by resolution of its board of

30  directors and subject to any limitations upon assessment

31  contained in its certificate of incorporation, may assess its

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 1  stockholders for amounts necessary to cure the deficiency and

 2  provide the insurer with a reasonable amount of surplus in

 3  addition. If any stockholder fails to pay a lawful assessment

 4  after notice given to him or her in person or by advertisement

 5  in such time and manner as approved by the office department,

 6  the insurer may require the return of the original certificate

 7  of stock held by the stockholder and, in cancellation and in

 8  lieu thereof, issue a new certificate for such number of

 9  shares as the stockholder may then be entitled to, upon the

10  basis of the stockholder's proportionate interest in the

11  amount of the insurer's capital stock as determined by the

12  office department to be remaining at the time of determination

13  of the amount of impairment under s. 628.411, after deducting

14  from such proportionate interest the amount of such unpaid

15  assessment.  The insurer may pay for or issue fractional

16  shares under this subsection.

17         (b)  If a mutual insurer, shall levy such an assessment

18  upon members as is provided for under s. 628.321.

19         Section 1281.  Subsections (1) and (2) of section

20  628.431, Florida Statutes, are amended to read:

21         628.431  Mutualization of stock insurers.--

22         (1)  A stock insurer other than a title insurer may

23  become a mutual insurer under such plan and procedure as may

24  be approved by the office department.

25         (2)  The office department shall not approve any such

26  plan, procedure, or mutualization unless:

27         (a)  It is equitable to stockholders and policyholders;

28         (b)  It is subject to approval by the holders of not

29  less than three-fourths of the insurer's outstanding capital

30  stock having voting rights and by not less than two-thirds of

31  the insurer's policyholders who vote on such plan in person,

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 1  by proxy, or by mail pursuant to such notice and procedure as

 2  may be approved by the office department;

 3         (c)  If a life insurer, the right to vote thereon is

 4  limited to holders of policies other than term or group

 5  policies, and whose policies have been in force for more than

 6  1 year;

 7         (d)  Mutualization will result in retirement of shares

 8  of the insurer's capital stock at a price not in excess of the

 9  fair market value thereof as determined by competent

10  disinterested appraisers;

11         (e)  The plan provides for the purchase of the shares

12  of any nonconsenting stockholder in the same manner and

13  subject to the same applicable conditions as provided by s.

14  607.247, as to rights of nonconsenting stockholders, with

15  respect to consolidation or merger of private corporations;

16         (f)  The plan provides for definite conditions to be

17  fulfilled by a designated early date upon which such

18  mutualization will be deemed effective; and

19         (g)  The mutualization leaves the insurer with surplus

20  funds reasonably adequate for the security of its

21  policyholders and to enable it to continue successfully in

22  business in the states in which it is then authorized to

23  transact insurance, and for the kinds of insurance included in

24  its certificates of authority in such states.

25         Section 1282.  Section 628.441, Florida Statutes, is

26  amended to read:

27         628.441  Converting mutual insurer.--

28         (1)  A mutual insurer may become a stock insurer under

29  such plan and procedure as may be approved by the office

30  department.

31  

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 1         (2)  The office department shall not approve any such

 2  plan or procedure unless:

 3         (a)  It is equitable to the insurer's members;

 4         (b)  It is subject to approval by vote of not less than

 5  three-fourths of the insurer's current members voting thereon

 6  in person, by proxy, or by mail at a meeting of members called

 7  for the purpose pursuant to such reasonable notice and

 8  procedure as may be approved by the office department; if a

 9  life insurer, the right to vote may be limited to members who

10  hold policies other than term or group policies, and whose

11  policies have been in force for not less than 1 year;

12         (c)  The corporate equity of each policyholder in the

13  insurer, other than as to unearned premiums, nonforfeiture

14  rights, and benefit claims under his or her policy, is

15  determinable under a fair formula approved by the office

16  department, which equity shall be based upon not less than the

17  insurer's entire surplus, after deducting contributed or

18  borrowed surplus funds, plus a reasonable present equity in

19  its reserves and in all nonadmitted assets;

20         (d)  The policyholders entitled to participate in the

21  purchase of stock or distribution of assets shall include all

22  current policyholders and all existing persons who had been

23  policyholders of the insurer within 3 years prior to the date

24  such plan was submitted to the office department;

25         (e)  The plan gives to each policyholder of the insurer

26  as specified in paragraph (d) a preemptive right to acquire

27  his or her proportionate part of all of the proposed capital

28  stock of the insurer, within a designated reasonable period,

29  and to apply upon the purchase thereof the amount of his or

30  her equity in the insurer as determined under paragraph (c);

31  

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 1         (f)  Shares are so offered to policyholders at a price

 2  not greater than to be thereafter offered to others;

 3         (g)  The plan provides for payment of cash to each

 4  policyholder not electing to apply his or her equity in the

 5  insurer toward the purchase price of stock to which he or she

 6  is preemptively entitled. The amount so paid shall be not less

 7  than 50 percent of the amount of the policyholder's equity not

 8  so used for the purchase of stock. Such cash payment together

 9  with stock so purchased, if any, shall constitute full payment

10  and discharge of the policyholder's corporate equity in such

11  mutual insurer; and

12         (h)  The plan, when completed, would provide for the

13  converted insurer paid-in capital stock in an amount not less

14  than the minimum paid-in capital required of a domestic stock

15  insurer transacting like kinds of insurance, together with

16  surplus funds in amounts not less than one-half of such

17  required capital.

18         Section 1283.  Subsection (2) of section 628.451,

19  Florida Statutes, is amended to read:

20         628.451  Merger or share exchange of stock insurers and

21  other entities.--

22         (2)  No such merger or share exchange shall be

23  effectuated unless in advance thereof the plan and agreement

24  therefor have been filed with the office department and

25  approved by it. The office department shall give such approval

26  provided it finds such plan or agreement:

27         (a)  Is in compliance with law;

28         (b)  Is fair to the stockholders of or other holders of

29  interests in any insurer or self-insurer involved; and

30  

31  

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 1         (c)  Would not substantially reduce the security of and

 2  service to be rendered to policyholders of the domestic

 3  insurer in this state or elsewhere.

 4         Section 1284.  Section 628.461, Florida Statutes, is

 5  amended to read:

 6         628.461  Acquisition of controlling stock.--

 7         (1)  No person shall, individually or in conjunction

 8  with any affiliated person of such person, acquire directly or

 9  indirectly, conclude a tender offer or exchange offer for,

10  enter into any agreement to exchange securities for, or

11  otherwise finally acquire 5 percent or more of, the

12  outstanding voting securities of a domestic stock insurer or

13  of a controlling company, unless:

14         (a)  The person or affiliated person has filed with the

15  office department and sent to the insurer and controlling

16  company a statement as specified in subsection (3) no later

17  than 5 days after any form of tender offer or exchange offer

18  is proposed, or no later than 5 days after the acquisition of

19  the securities if no tender offer or exchange offer is

20  involved; and

21         (b)  The office department has approved the tender or

22  exchange offer, or acquisition if no tender offer or exchange

23  offer is involved, and approval is in effect.

24  

25  In lieu of a filing as required under this subsection, a party

26  acquiring less than 10 percent of the outstanding voting

27  securities of an insurer may file a disclaimer of affiliation

28  and control. The disclaimer shall fully disclose all material

29  relationships and basis for affiliation between the person and

30  the insurer as well as the basis for disclaiming the

31  affiliation and control. After a disclaimer has been filed,

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 1  the insurer shall be relieved of any duty to register or

 2  report under this section which may arise out of the insurer's

 3  relationship with the person unless and until the office

 4  department disallows the disclaimer. The office department

 5  shall disallow a disclaimer only after furnishing all parties

 6  in interest with notice and opportunity to be heard and after

 7  making specific findings of fact to support the disallowance.

 8  A filing as required under this subsection must be made as to

 9  any acquisition that equals or exceeds 10 percent of the

10  outstanding voting securities.

11         (2)  This section does not apply to any acquisition of

12  voting securities of a domestic stock insurer or of a

13  controlling company by any person who, on July 1, 1976, is the

14  owner of a majority of such voting securities or who, on or

15  after July 1, 1976, becomes the owner of a majority of such

16  voting securities with the approval of the office department

17  pursuant to this section.

18         (3)  The statement to be filed with the office

19  department and furnished to the insurer and controlling

20  company shall contain the following information and any

21  additional information as the office deems department may deem

22  necessary to determine the character, experience, ability, and

23  other qualifications of the person or affiliated person of

24  such person for the protection of the policyholders and

25  shareholders of the insurer and the public:

26         (a)  The identity of, and the background information

27  specified in subsection (4) on, each natural person by whom,

28  or on whose behalf, the acquisition is to be made; and, if the

29  acquisition is to be made by, or on behalf of, a corporation,

30  association, or trust, as to the corporation, association, or

31  trust and as to any person who controls either directly or

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 1  indirectly the corporation, association, or trust, the

 2  identity of, and the background information specified in

 3  subsection (4) on, each director, officer, trustee, or other

 4  natural person performing duties similar to those of a

 5  director, officer, or trustee for the corporation,

 6  association, or trust;

 7         (b)  The source and amount of the funds or other

 8  consideration used, or to be used, in making the acquisition;

 9         (c)  Any plans or proposals which such persons may have

10  made to liquidate such insurer, to sell any of its assets or

11  merge or consolidate it with any person, or to make any other

12  major change in its business or corporate structure or

13  management; and any plans or proposals which such persons may

14  have made to liquidate any controlling company of such

15  insurer, to sell any of its assets or merge or consolidate it

16  with any person, or to make any other major change in its

17  business or corporate structure or management;

18         (d)  The number of shares or other securities which the

19  person or affiliated person of such person proposes to

20  acquire, the terms of the proposed acquisition, and the manner

21  in which the securities are to be acquired; and

22         (e)  Information as to any contract, arrangement, or

23  understanding with any party with respect to any of the

24  securities of the insurer or controlling company, including,

25  but not limited to, information relating to the transfer of

26  any of the securities, option arrangements, puts or calls, or

27  the giving or withholding of proxies, which information names

28  the party with whom the contract, arrangement, or

29  understanding has been entered into and gives the details

30  thereof.

31  

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 1         (4)(a)  The information as to the background and

 2  identity of each person, which information is required to be

 3  furnished pursuant to paragraph (3)(a), shall include:

 4         1.  The person's occupations, positions of employment,

 5  and offices held during the past 10 years.

 6         2.  The principal business and address of any business,

 7  corporation, or other organization in which each such office

 8  of the person was held or in which each such occupation or

 9  position of employment was carried on.

10         3.  Whether the person was, at any time during such

11  10-year period, convicted of any crime other than a traffic

12  violation.

13         4.  Whether the person has been, during such 10-year

14  period, the subject of any proceeding for the revocation of

15  any license and, if so, the nature of the proceeding and the

16  disposition of the proceeding.

17         5.  Whether, during the 10-year period, the person has

18  been the subject of any proceeding under the federal

19  Bankruptcy Act or whether, during the 10-year period, any

20  corporation, partnership, firm, trust, or association in which

21  the person was a director, officer, trustee, partner, or other

22  official has been subject to any such proceeding, either

23  during the time in which the person was a director, officer,

24  trustee, partner, or other official or within 12 months

25  thereafter.

26         6.  Whether, during the 10-year period, the person has

27  been enjoined, either temporarily or permanently, by a court

28  of competent jurisdiction from violating any federal or state

29  law regulating the business of insurance, securities, or

30  banking, or from carrying out any particular practice or

31  practices in the course of the business of insurance,

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 1  securities, or banking, together with details as to any such

 2  event.

 3         (b)  Any corporation, association, or trust filing the

 4  statement required by this section shall give all required

 5  information that is within the knowledge of the directors,

 6  officers, or trustees (or others performing functions similar

 7  to those of a director, officer, or trustee) of the

 8  corporation, association, or trust making the filing and of

 9  any person controlling either directly or indirectly such

10  corporation, association, or trust.  A copy of the statement

11  and any amendments to the statement shall be sent by

12  registered mail to the insurer at its principal office within

13  the state and to any controlling company at its principal

14  office.  If any material change occurs in the facts set forth

15  in the statement filed with the office department and sent to

16  such insurer or controlling company pursuant to this section,

17  an amendment setting forth such changes shall be filed

18  immediately with the office department and sent immediately to

19  such insurer and controlling company.

20         (5)(a)  The acquisition of voting securities shall be

21  deemed approved unless the office department disapproves the

22  proposed acquisition within 90 days after the statement

23  required by subsection (1) has been filed. The office

24  department may on its own initiate, or if requested to do so

25  in writing by a substantially affected party shall conduct, a

26  proceeding to consider the appropriateness of the proposed

27  filing. The 90-day time period shall be tolled during the

28  pendency of the proceeding. Any written request for a

29  proceeding must be filed with the office department within 10

30  days of the date notice of the filing is given. During the

31  pendency of the proceeding or review period by the office

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 1  department, any person or affiliated person complying with the

 2  filing requirements of this section may proceed and take all

 3  steps necessary to conclude the acquisition so long as the

 4  acquisition becoming final is conditioned upon obtaining

 5  office departmental approval. The office department shall,

 6  however, at any time that it finds an immediate danger to the

 7  public health, safety, and welfare of the domestic

 8  policyholders exists, immediately order, pursuant to s.

 9  120.569(2)(n), the proposed acquisition temporarily

10  disapproved and any further steps to conclude the acquisition

11  ceased.

12         (b)  During the pendency of the office's department's

13  review of any acquisition subject to the provisions of this

14  section, the acquiring person shall not make any material

15  change in the operation of the insurer or controlling company

16  unless the office department has specifically approved the

17  change nor shall the acquiring person make any material change

18  in the management of the insurer unless advance written notice

19  of the change in management is furnished to the office

20  department. A material change in the operation of the insurer

21  is a transaction which disposes of or obligates 5 percent or

22  more of the capital and surplus of the insurer. A material

23  change in the management of the insurer is any change in

24  management involving officers or directors of the insurer or

25  any person of the insurer or controlling company having

26  authority to dispose of or obligate 5 percent or more of the

27  insurer's capital or surplus. The office department shall

28  approve a material change in operation if it finds the

29  applicable provisions of subsection (7) have been met. The

30  office department may disapprove a material change in

31  management if it finds that the applicable provisions of

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 1  subsection (7) have not been met and in such case the insurer

 2  shall promptly change management as acceptable to the office

 3  department.

 4         (c)  If a request for a proceeding is filed, the

 5  proceeding shall be conducted within 60 days after the date

 6  the written request for a proceeding is received by the office

 7  department. A recommended order shall be issued within 20 days

 8  of the date of the close of the proceedings.  A final order

 9  shall be issued within 20 days of the date of the recommended

10  order or, if exceptions to the recommended order are filed,

11  within 20 days of the date the exceptions are filed.

12         (6)  The office department may disapprove any

13  acquisition subject to the provisions of this section by any

14  person or any affiliated person of such person who:

15         (a)  Willfully violates this section;

16         (b)  In violation of an order of the office department

17  issued pursuant to subsection (10), fails to divest himself or

18  herself of any stock obtained in violation of this section, or

19  fails to divest himself or herself of any direct or indirect

20  control of such stock, within 25 days after such order; or

21         (c)  In violation of an order issued by the office

22  department pursuant to subsection (10), acquires additional

23  stock of the domestic insurance company or controlling

24  company, or direct or indirect control of such stock, without

25  complying with this section.

26         (7)  The person or persons filing the statement

27  required by subsection (1) shall have the burden of proof. The

28  office department shall approve any such acquisition if it

29  finds, on the basis of the record made during any proceeding

30  or on the basis of the filed statement if no proceeding is

31  conducted, that:

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 1         (a)  Upon completion of the acquisition, the domestic

 2  stock insurer will be able to satisfy the requirements for the

 3  issuance of a license to write the line or lines of insurance

 4  for which it is presently licensed;

 5         (b)  The financial condition of the acquiring person or

 6  persons will not jeopardize the financial stability of the

 7  insurer or prejudice the interests of its policyholders or the

 8  public;

 9         (c)  Any plan or proposal which the acquiring person

10  has, or acquiring persons have, made:

11         1.  To liquidate the insurer, sell its assets, or merge

12  or consolidate it with any person, or to make any other major

13  change in its business or corporate structure or management;

14  or

15         2.  To liquidate any controlling company, sell its

16  assets, or merge or consolidate it with any person, or to make

17  any major change in its business or corporate structure or

18  management which would have an effect upon the insurer

19  

20  is fair and free of prejudice to the policyholders of the

21  domestic stock insurer or to the public;

22         (d)  The competence, experience, and integrity of those

23  persons who will control directly or indirectly the operation

24  of the domestic stock insurer indicate that the acquisition is

25  in the best interest of the policyholders of the insurer and

26  in the public interest;

27         (e)  The natural persons for whom background

28  information is required to be furnished pursuant to this

29  section have such backgrounds as to indicate that it is in the

30  best interests of the policyholders of the domestic stock

31  

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 1  insurer, and in the public interest, to permit such persons to

 2  exercise control over such domestic stock insurer;

 3         (f)  The officers and directors to be employed after

 4  the acquisition have sufficient insurance experience and

 5  ability to assure reasonable promise of successful operation;

 6         (g)  The management of the insurer after the

 7  acquisition will be competent and trustworthy and will possess

 8  sufficient managerial experience so as to make the proposed

 9  operation of the insurer not hazardous to the insurance-buying

10  public;

11         (h)  The management of the insurer after the

12  acquisition will not include any person who has directly or

13  indirectly through ownership, control, reinsurance

14  transactions, or other insurance or business relations

15  unlawfully manipulated the assets, accounts, finances, or

16  books of any insurer or otherwise acted in bad faith with

17  respect thereto;

18         (i)  The acquisition is not likely to be hazardous or

19  prejudicial to the insurer's policyholders or the public; and

20         (j)  The effect of the acquisition of control would not

21  substantially lessen competition in insurance in this state or

22  would not tend to create a monopoly therein.

23         (8)  No vote by the stockholder of record, or by any

24  other person, of any security acquired in contravention of the

25  provisions of this section is valid.  Any acquisition of any

26  security contrary to the provisions of this section is void.

27  Upon the petition of the domestic stock insurer or controlling

28  company, the circuit court for the county in which the

29  principal office of such domestic stock insurer is located

30  may, without limiting the generality of its authority, order

31  the issuance or entry of an injunction or other order to

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 1  enforce the provisions of this section.  There shall be a

 2  private right of action in favor of the domestic stock insurer

 3  or controlling company to enforce the provisions of this

 4  section.  No demand upon the office department that it perform

 5  its functions shall be required as a prerequisite to any suit

 6  by the domestic stock insurer or controlling company against

 7  any other person, and in no case shall the office department

 8  be deemed a necessary party to any action by such domestic

 9  stock insurer or controlling company to enforce the provisions

10  of this section. Any person who makes or proposes an

11  acquisition requiring the filing of a statement pursuant to

12  this section, or who files such a statement, shall be deemed

13  to have thereby designated the Chief Financial Officer

14  Insurance Commissioner and Treasurer, or his or her assistant

15  or deputy or another person in charge of his or her office, as

16  such person's agent for service of process under this section,

17  and shall thereby be deemed to have submitted himself or

18  herself to the administrative jurisdiction of the office

19  department and to the jurisdiction of the circuit court.

20         (9)  Any approval by the office department under this

21  section does not constitute a recommendation by the office

22  department for an acquisition, tender offer, or exchange

23  offer. It is unlawful for a person to represent that the

24  office's department's approval constitutes a recommendation. A

25  person who violates the provisions of this subsection is

26  guilty of a felony of the third degree, punishable as provided

27  in s. 775.082, s. 775.083, or s. 775.084.  The

28  statute-of-limitations period for the prosecution of an

29  offense committed under this subsection is 5 years.

30         (10)  Upon notification to the office department by the

31  domestic stock insurer or a controlling company that any

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 1  person or any affiliated person of such person has acquired 5

 2  percent or more of the outstanding voting securities of the

 3  domestic stock insurer or controlling company without

 4  complying with the provisions of this section, the office

 5  department shall order that the person and any affiliated

 6  person of such person cease acquisition of any further

 7  securities of the domestic stock insurer or controlling

 8  company; however, the person or any affiliated person of such

 9  person may request a proceeding, which proceeding shall be

10  convened within 7 days after the rendering of the order for

11  the sole purpose of determining whether the person,

12  individually or in connection with any affiliated person of

13  such person, has acquired 5 percent or more of the outstanding

14  voting securities of a domestic stock insurer or controlling

15  company. Upon the failure of the person or affiliated person

16  to request a hearing within 7 days, or upon a determination at

17  a hearing convened pursuant to this subsection that the person

18  or affiliated person has acquired voting securities of a

19  domestic stock insurer or controlling company in violation of

20  this section, the office department may order the person and

21  affiliated person to divest themselves of any voting

22  securities so acquired.

23         (11)(a)  The office department shall, if necessary to

24  protect the public interest, suspend or revoke the certificate

25  of authority of any insurer or controlling company:

26         1.  The control of which is acquired in violation of

27  this section;

28         2.  That is controlled, directly or indirectly, by any

29  person or any affiliated person of such person who, in

30  violation of this section, has obtained control of a domestic

31  stock insurer or controlling company; or

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 1         3.  That is controlled, directly or indirectly, by any

 2  person who, directly or indirectly, controls any other person

 3  who, in violation of this section, acquires control of a

 4  domestic stock insurer or controlling company.

 5         (b)  If any insurer is subject to suspension or

 6  revocation pursuant to paragraph (a), the insurer shall be

 7  deemed to be in such condition, or to be using or to have been

 8  subject to such methods or practices in the conduct of its

 9  business, as to render its further transaction of insurance

10  presently or prospectively hazardous to its policyholders,

11  creditors, or stockholders or to the public.

12         (12)(a)  For the purpose of this section, the term

13  "affiliated person" of another person means:

14         1.  The spouse of such other person;

15         2.  The parents of such other person and their lineal

16  descendants and the parents of such other person's spouse and

17  their lineal descendants;

18         3.  Any person who directly or indirectly owns or

19  controls, or holds with power to vote, 5 percent or more of

20  the outstanding voting securities of such other person;

21         4.  Any person 5 percent or more of the outstanding

22  voting securities of which are directly or indirectly owned or

23  controlled, or held with power to vote, by such other person;

24         5.  Any person or group of persons who directly or

25  indirectly control, are controlled by, or are under common

26  control with such other person;

27         6.  Any officer, director, partner, copartner, or

28  employee of such other person;

29         7.  If such other person is an investment company, any

30  investment adviser of such company or any member of an

31  advisory board of such company;

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 1         8.  If such other person is an unincorporated

 2  investment company not having a board of directors, the

 3  depositor of such company; or

 4         9.  Any person who has entered into an agreement,

 5  written or unwritten, to act in concert with such other person

 6  in acquiring or limiting the disposition of securities of a

 7  domestic stock insurer or controlling company.

 8         (b)  For the purposes of this section, the term

 9  "controlling company" means any corporation, trust, or

10  association owning, directly or indirectly, 25 percent or more

11  of the voting securities of one or more domestic stock

12  insurance companies.

13         (13)  The commission may department is authorized to

14  adopt, amend, or repeal rules that are necessary to implement

15  the provisions of this section, pursuant to chapter 120.

16         Section 1285.  Section 628.4615, Florida Statutes, is

17  amended to read:

18         628.4615  Specialty insurers; acquisition of

19  controlling stock, ownership interest, assets, or control;

20  merger or consolidation.--

21         (1)  For the purposes of this section, the term

22  "specialty insurer" means any person holding a license or

23  certificate of authority as:

24         (a)  A motor vehicle service agreement company

25  authorized to issue motor vehicle service agreements as those

26  terms are defined in s. 634.011(7) and (8) s. 634.011(8) and

27  (9);

28         (b)  A home warranty association authorized to issue

29  "home warranties" as those terms are defined in s. 634.301(3)

30  and (4) s. 634.301(4) and (5);

31  

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 1         (c)  A service warranty association authorized to issue

 2  "service warranties" as those terms are defined in s.

 3  634.401(13) and (14) s. 634.401(14) and (15);

 4         (d)  A prepaid limited health service organization

 5  authorized to issue prepaid limited health service contracts,

 6  as those terms are defined in chapter 636 An optometric

 7  service plan corporation authorized to issue optometric

 8  service plan contracts as those terms are defined in s.

 9  637.001(2) and (3);

10         (e)  A pharmaceutical service plan corporation

11  authorized to issue pharmaceutical service plan contracts as

12  those terms are defined in s. 637.1701(2) and (3);

13         (f)  A dental service plan corporation licensed to

14  issue contracts for dental services pursuant to a dental

15  service plan as that term is defined in s. 637.401(1);

16         (g)  An ambulance service association authorized to

17  issue ambulance service contracts as those terms are defined

18  in s. 638.021(1) and (2);

19         (e)(h)  An authorized health maintenance organization

20  operating pursuant to s. 641.21;

21         (f)(i)  An authorized prepaid health clinic operating

22  pursuant to s. 641.405;

23         (g)(j)  A legal expense insurance corporation

24  authorized to engage in a legal expense insurance business

25  pursuant to s. 642.021;

26         (h)(k)  A provider which is licensed to operate a

27  facility which undertakes to provide continuing care as those

28  terms are defined in s. 651.011(2), (4), (5), and (6), and

29  (7);

30         (i)(l)  A multiple-employer welfare arrangement

31  operating pursuant to ss. 624.436-624.446;

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 1         (j)(m)  A premium finance company authorized to finance

 2  insurance premiums pursuant to s. 627.828; or

 3         (k)(n)  A corporation authorized to accept donor

 4  annuity agreements pursuant to s. 627.481.

 5         (2)  No person shall, individually or in conjunction

 6  with any affiliated person of such person, directly or

 7  indirectly, conclude a tender offer or exchange offer for,

 8  enter into any agreement to exchange securities for, or

 9  otherwise finally acquire, 10 percent or more of the

10  outstanding voting securities of a specialty insurer which is

11  a stock corporation or of a controlling company of a specialty

12  insurer which is a stock corporation; or conclude an

13  acquisition of, or otherwise finally acquire, 10 percent or

14  more of the ownership interest of a specialty insurer which is

15  not a stock corporation or of a controlling company of a

16  specialty insurer which is not a stock corporation, unless:

17         (a)  The person or affiliated person has filed with the

18  office department and sent by registered mail to the principal

19  office of the specialty insurer and controlling company an

20  application, signed under oath and prepared on forms

21  prescribed by the commission department, that contains the

22  information specified in subsection (4) no later than 5 days

23  after any form of tender offer or exchange offer is proposed,

24  or no later than 5 days after the acquisition of the

25  securities or ownership interest if no tender offer or

26  exchange offer is involved.

27         (b)  The office department has approved the tender

28  offer or exchange offer, or acquisition if no tender offer or

29  exchange offer is involved.

30         (3)  This section does not apply to any acquisition of

31  voting securities or ownership interest of a specialty insurer

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 1  or of a controlling company by any person who, on July 9,

 2  1986, is the owner of a majority of such voting securities or

 3  ownership interest or who, on or after July 9, 1986, becomes

 4  the owner of a majority of such voting securities or ownership

 5  interest with the approval of the office department pursuant

 6  to this section.

 7         (4)  The application to be filed with the office

 8  department and furnished to the specialty insurer and

 9  controlling company shall contain the following information

10  and any additional information as the office deems department

11  may deem necessary to determine the character, experience,

12  ability, and other qualifications of the person or affiliated

13  person of such person for the protection of the insureds of

14  the insurer and of the public:

15         (a)1.  The identity of, and the background information

16  specified in subsection (5) on, each natural person by whom,

17  or on whose behalf, the acquisition is to be made; and,

18         2.  If the acquisition is to be made by, or on behalf

19  of, a person other than a natural person and as to any person

20  who controls, either directly or indirectly, such other

21  person, the identity of, and the background information

22  specified in subsection (5) on:

23         a.  Each director, officer, or trustee, if a

24  corporation, or

25         b.  Each partner, owner, manager, or joint venturer, or

26  other person performing duties similar to those of persons in

27  the aforementioned positions, if not a corporation,

28  

29  for the person.

30         (b)  The source and amount of the funds or other

31  consideration used, or to be used, in making the acquisition.

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 1         (c)  Any plans or proposals which such persons may have

 2  made to liquidate the specialty insurer, to sell any of its

 3  assets or merge or consolidate it with any person, or to make

 4  any other major change in its business or corporate structure

 5  or management; and any plans or proposals which such persons

 6  may have made to liquidate any controlling company of the

 7  specialty insurer, to sell any of its assets or merge or

 8  consolidate it with any person, or to make any other major

 9  change in its business or corporate structure or management.

10         (d)  The nature and the extent of the controlling

11  interest which the person or affiliated person of such person

12  proposes to acquire, the terms of the proposed acquisition,

13  and the manner in which the controlling interest is to be

14  acquired of a specialty insurer or controlling company which

15  is not a stock corporation.

16         (e)  The number of shares or other securities which the

17  person or affiliated person of such person proposes to

18  acquire, the terms of the proposed acquisition, and the manner

19  in which the securities are to be acquired.

20         (f)  Information as to any contract, arrangement, or

21  understanding with any party with respect to any of the

22  securities of the specialty insurer or controlling company,

23  including, but not limited to, information relating to the

24  transfer of any of the securities, option arrangements, puts

25  or calls, or the giving or withholding of proxies, which

26  information names the party with whom the contract,

27  arrangement, or understanding has been entered into and gives

28  the details thereof.

29         (5)(a)  The information as to the background and

30  identity of each natural person, which information is required

31  to be furnished pursuant to paragraph (4)(a), shall include:

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 1         1.  The natural person's occupations, positions of

 2  employment, and offices held during the past 10 years.

 3         2.  The principal business and address of any business,

 4  corporation, or organization in which each such office of the

 5  natural person was held, or in which each such occupation or

 6  position of employment was carried on.

 7         3.  Whether the natural person was, at any time during

 8  such 10-year period, convicted of any crime other than a

 9  traffic violation.

10         4.  Whether the natural person has been, during such

11  10-year period, the subject of any proceeding for the

12  revocation of any license and, if so, the nature of the

13  proceeding and the disposition of the proceeding.

14         5.  Whether, during the 10-year period, the natural

15  person has been the subject of any proceeding under the

16  federal Bankruptcy Act; or whether, during the 10-year period,

17  any person or other business or organization in which the

18  natural person was a director, officer, trustee, partner,

19  owner, manager, or other official has been subject to any such

20  proceeding, either during the time in which the natural person

21  was a director, officer, or trustee, if a corporation, or a

22  partner, owner, manager, joint venturer, or other official, if

23  not a corporation, or within 12 months thereafter.

24         6.  Whether, during the 10-year period, the natural

25  person has been enjoined, either temporarily or permanently,

26  by a court of competent jurisdiction from violating any

27  federal or state law regulating the business of insurance,

28  securities, or banking, or from carrying out any particular

29  practice or practices in the course of the business of

30  insurance, securities, or banking, together with details as to

31  any such event.

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 1         7.  Fingerprints of each person referred to in

 2  subsection (4).

 3         (b)  Any person filing the statement required by this

 4  section shall give all required information that is within the

 5  knowledge of:

 6         1.  The directors, officers, or trustees, if a

 7  corporation, or

 8         2.  The partners, owners, managers, or joint venturers,

 9  or others performing functions similar to those of a director,

10  officer, or trustee, if not a corporation,

11  

12  of the person making the filing and of any person controlling

13  either directly or indirectly such person.  If any material

14  change occurs in the facts set forth in the application filed

15  with the office department pursuant to this section, an

16  amendment setting forth such changes shall be filed

17  immediately with the office department, and a copy of the

18  amendment shall be sent by registered mail to the principal

19  office of the specialty insurer and to the principal office of

20  the controlling company.

21         (6)(a)  The acquisition application shall be reviewed

22  in accordance with chapter 120. The office department may on

23  its own initiate, or, if requested to do so in writing by a

24  substantially affected person, shall conduct, a proceeding to

25  consider the appropriateness of the proposed filing. Time

26  periods for purposes of chapter 120 shall be tolled during the

27  pendency of the proceeding. Any written request for a

28  proceeding must be filed with the office department within 10

29  days of the date notice of the filing is given. During the

30  pendency of the proceeding or review period by the office

31  department, any person or affiliated person complying with the

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 1  filing requirements of this section may proceed and take all

 2  steps necessary to conclude the acquisition so long as the

 3  acquisition becoming final is conditioned upon obtaining

 4  office departmental approval.  The office department shall,

 5  however, at any time it finds an immediate danger to the

 6  public health, safety, and welfare of the insureds exists,

 7  immediately order, pursuant to s. 120.569(2)(n), the proposed

 8  acquisition disapproved and any further steps to conclude the

 9  acquisition ceased.

10         (b)  During the pendency of the office's department's

11  review of any acquisition subject to the provisions of this

12  section, the acquiring person shall not make any material

13  change in the operation of the specialty insurer or

14  controlling company unless the office department has

15  specifically approved the change nor shall the acquiring

16  person make any material change in the management of the

17  specialty insurer unless advance written notice of the change

18  in management is furnished to the office department. A

19  material change in the operation of the specialty insurer is a

20  transaction which disposes of or obligates 5 percent or more

21  of the capital and surplus of the specialty insurer. A

22  material change in the management of the specialty insurer is

23  any change in management involving officers or directors of

24  the specialty insurer or any person of the specialty insurer

25  or controlling company having authority to dispose of or

26  obligate 5 percent or more of the specialty insurer's capital

27  or surplus.  The office department shall approve a material

28  change in operations if it finds the applicable provisions of

29  subsection (8) have been met.  The office department may

30  disapprove a material change in management if it finds that

31  the applicable provisions of subsection (8) have not been met

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 1  and in such case the specialty insurer shall promptly change

 2  management as acceptable to the office department.

 3         (c)  If a request for a proceeding is filed, the

 4  proceeding shall be conducted within 60 days after the date

 5  the written request for a proceeding is received by the office

 6  department. A recommended order shall be issued within 20 days

 7  of the date of the close of the proceedings. A final order

 8  shall be issued within 20 days of the date of the recommended

 9  order or, if exceptions to the recommended order are filed,

10  within 20 days of the date the exceptions are filed.

11         (7)  The office department may disapprove any

12  acquisition subject to the provisions of this section by any

13  person or any affiliated person of such person who:

14         (a)  Willfully violates this section;

15         (b)  In violation of an order of the office department

16  issued pursuant to subsection (11), fails to divest himself or

17  herself of any stock or ownership interest obtained in

18  violation of this section or fails to divest himself or

19  herself of any direct or indirect control of such stock or

20  ownership interest, within 25 days after such order; or

21         (c)  In violation of an order issued by the office

22  department pursuant to subsection (11), acquires an additional

23  stock or ownership interest in a specialty insurer or

24  controlling company or direct or indirect control of such

25  stock or ownership interest, without complying with this

26  section.

27         (8)  The person or persons filing the application

28  required by subsection (2) shall have the burden of proof. The

29  office department shall approve any such acquisition if it

30  finds, on the basis of the record made during any proceeding

31  

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 1  or on the basis of the filed application if no proceeding is

 2  conducted, that:

 3         (a)  Upon completion of the acquisition, the specialty

 4  insurer will be able to satisfy the requirements for the

 5  issuance of a license or certificate to write the line of

 6  insurance for which it is presently licensed or certificated.

 7         (b)  The financial condition of the acquiring person or

 8  persons will not jeopardize the financial stability of the

 9  specialty insurer or prejudice the interests of its insureds

10  or the public.

11         (c)  Any plan or proposal which the acquiring person

12  has, or acquiring persons have, made:

13         1.  To liquidate the specialty insurer, sell its

14  assets, or merge or consolidate it with any person, or to make

15  any other major change in its business or corporate structure

16  or management, or

17         2.  To liquidate any controlling company, sell its

18  assets, or merge or consolidate it with any person, or to make

19  any major change in its business or corporate structure or

20  management which would have an effect upon the specialty

21  insurer,

22  

23  is fair and free of prejudice to the insureds of the specialty

24  insurer or to the public.

25         (d)  The competence, experience, and integrity of those

26  persons who will control directly or indirectly the operation

27  of the specialty insurer indicate that the acquisition is in

28  the best interest of the insureds of the insurer and in the

29  public interest.

30         (e)  The natural persons for whom background

31  information is required to be furnished pursuant to this

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 1  section have such backgrounds as to indicate that it is in the

 2  best interests of the insureds of the specialty insurer and in

 3  the public interest to permit such persons to exercise control

 4  over the specialty insurer.

 5         (f)  The directors and officers, if such specialty

 6  insurer or controlling company is a stock corporation, or the

 7  trustees, partners, owners, managers, or joint venturers or

 8  other persons performing duties similar to those of persons in

 9  the aforementioned positions, if such specialty insurer or

10  controlling company is not a stock corporation, to be employed

11  after the acquisition have sufficient insurance experience and

12  ability to assure reasonable promise of successful operation.

13         (g)  The management of the specialty insurer after the

14  acquisition will be competent and trustworthy, and will

15  possess sufficient managerial experience so as to make the

16  proposed operation of the specialty insurer not hazardous to

17  the insurance-buying public.

18         (h)  The management of the specialty insurer after the

19  acquisition shall not include any person who has directly or

20  indirectly through ownership, control, reinsurance

21  transactions, or other insurance or business relations

22  unlawfully manipulated the assets, accounts, finances, or

23  books of any insurer or otherwise acted in bad faith with

24  respect thereto.

25         (i)  The acquisition is not likely to be hazardous or

26  prejudicial to the insureds of the insurer or to the public.

27         (j)  The effect of the acquisition would not

28  substantially lessen competition in the line of insurance for

29  which the specialty insurer is licensed or certified in this

30  state or would not tend to create a monopoly therein.

31  

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 1         (9)  No vote by the stockholder of record, or by any

 2  other person, of any security acquired in contravention of the

 3  provisions of this section is valid.  Any acquisition contrary

 4  to the provisions of this section is void. Upon the petition

 5  of the specialty insurer or the controlling company, the

 6  circuit court for the county in which the principal office of

 7  the specialty insurer is located may, without limiting the

 8  generality of its authority, order the issuance or entry of an

 9  injunction or other order to enforce the provisions of this

10  section.  There shall be a private right of action in favor of

11  the specialty insurer or controlling company to enforce the

12  provisions of this section.  No demand upon the office

13  department that it perform its functions shall be required as

14  a prerequisite to any suit by the specialty insurer or

15  controlling company against any other person, and in no case

16  shall the office department be deemed a necessary party to any

17  action by the specialty insurer or controlling company to

18  enforce the provisions of this section.  Any person who makes

19  or proposes an acquisition requiring the filing of an

20  application pursuant to this section, or who files such an

21  application, shall be deemed to have thereby designated the

22  Chief Financial Officer Insurance Commissioner and Treasurer,

23  or his or her assistant or deputy or another person in charge

24  of his or her office, as such person's agent for service of

25  process under this section and shall thereby be deemed to have

26  submitted himself or herself to the administrative

27  jurisdiction of the office department and to the jurisdiction

28  of the circuit court.

29         (10)  Any approval by the office department under this

30  section does not constitute a recommendation by the office

31  department of the tender offer or exchange offer, or

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 1  acquisition, if no tender offer or exchange offer is involved.

 2  It is unlawful for a person to represent that the office's

 3  department's approval constitutes a recommendation. A person

 4  who violates the provisions of this subsection commits a

 5  felony of the third degree, punishable as provided in s.

 6  775.082, s. 775.083, or s. 775.084. The statute-of-limitations

 7  period for the prosecution of an offense committed under this

 8  subsection is 5 years.

 9         (11)  If the office department determines that any

10  person or any affiliated person of such person has acquired 10

11  percent or more of the outstanding voting securities of a

12  specialty insurer or controlling company which is a stock

13  corporation, or 10 percent or more of the ownership interest

14  of a specialty insurer or controlling company which is not a

15  stock corporation, without complying with the provisions of

16  this section, the office department may order that the person

17  and any affiliated person of such person cease acquisition of

18  the specialty insurer or controlling company and, if

19  appropriate, divest itself of any stock or ownership interest

20  acquired in violation of this section.

21         (12)(a)  The office department shall, if necessary to

22  protect the public interest, suspend or revoke the certificate

23  of authority of any specialty insurer or controlling company

24  acquired in violation of this section.

25         (b)  If any specialty insurer is subject to suspension

26  or revocation pursuant to paragraph (a), the specialty insurer

27  shall be deemed to be in such condition, or to be using or to

28  have been subject to such methods or practices in the conduct

29  of its business, as to render its further transaction of

30  insurance presently or prospectively hazardous to its

31  insureds, creditors, or stockholders or to the public.

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 1         (13)(a)  For the purpose of this section, the term

 2  "acquisition" includes:

 3         1.  A tender offer or exchange offer for securities,

 4  assets, or other ownership interest;

 5         2.  An agreement to exchange securities for other

 6  securities, assets, or other ownership interest;

 7         3.  A merger of a person or affiliated person into a

 8  specialty insurer or a merger of any person with a specialty

 9  insurer;

10         4.  A consolidation; or

11         5.  Any other form of change of control

12  

13  whereby any person or affiliated person acquires or attempts

14  to acquire, directly or indirectly, 10 percent or more of the

15  ownership interest or assets of a specialty insurer or of a

16  controlling company.  However, in the case of a health

17  maintenance organization organized as a for-profit

18  corporation, the provisions of s. 628.451 shall govern with

19  respect to any merger or consolidation, and, in the case of a

20  health maintenance organization organized as a not-for-profit

21  corporation, the provisions of s. 628.471 shall govern with

22  respect to any merger or consolidation.

23         (b)  For the purpose of this section, the term

24  "affiliated person" of another person includes:

25         1.  The spouse of such other natural person;

26         2.  The parents of such other natural person and their

27  lineal descendants and the parents of such other natural

28  person's spouse and their lineal descendants;

29         3.  Any person who directly or indirectly owns or

30  controls, or holds with power to vote, 10 percent or more of

31  the outstanding voting securities of such other person;

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 1         4.  Any person who directly or indirectly owns 10

 2  percent or more of the outstanding voting securities which are

 3  directly or indirectly owned or controlled, or held with power

 4  to vote, by such other person;

 5         5.  Any person or group of persons who directly or

 6  indirectly control, are controlled by, or are under common

 7  control with such other person;

 8         6.  Any director, officer, trustee, partner, owner,

 9  manager, joint venturer, or employee, or other person

10  performing duties similar to those of persons in the

11  aforementioned positions, of such other person;

12         7.  If such other person is an investment company, any

13  investment adviser of such company or any member of an

14  advisory board of such company;

15         8.  If such other person is an unincorporated

16  investment company not having a board of directors, the

17  depositor of such company; or

18         9.  Any person who has entered into an agreement,

19  written or unwritten, to act in concert with such other person

20  in acquiring, or limiting the disposition of, securities of a

21  specialty insurer or controlling company which is a stock

22  corporation or in acquiring, or limiting the disposition of,

23  an ownership interest of a specialty insurer or controlling

24  company which is not a stock corporation.

25         (c)  For the purposes of this section, the term

26  "controlling company" means any corporation, trust, or

27  association owning, directly or indirectly, 25 percent or more

28  of the voting securities of one or more specialty insurance

29  companies which are stock corporations, or 25 percent or more

30  of the ownership interest of one or more specialty insurance

31  companies which are not stock corporations.

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 1         (d)  For the purpose of this section, the term "natural

 2  person" means an individual.

 3         (e)  For the purpose of this section, the term "person"

 4  includes a natural person, corporation, association, trust,

 5  general partnership, limited partnership, joint venture, firm,

 6  proprietorship, or any other entity which may hold a license

 7  or certificate as a specialty insurer.

 8         (14)  The commission may department is authorized to

 9  adopt, amend, or repeal rules that are necessary to implement

10  the provisions of this section, pursuant to chapter 120.

11         Section 1286.  Subsections (3) and (4) of section

12  628.471, Florida Statutes, are amended to read:

13         628.471  Mergers; mutual insurers.--

14         (3)  The plan and agreement for merger shall be

15  submitted to and approved by at least two-thirds of the

16  members of each mutual insurer voting thereon at meetings

17  called for the purpose pursuant to such reasonable notice and

18  procedure as has been approved by the office department. If a

19  life insurer, the right to vote may be limited to members

20  whose policies are other than term and group policies and have

21  been in effect for more than 1 year.

22         (4)  No such merger shall be effectuated unless in

23  advance thereof the plan and agreement therefor have been

24  filed with the office department and approved by it. The

25  office department shall give such approval unless it finds

26  such plan or agreement:

27         (a)  Is inequitable to the policyholders of any

28  domestic insurer involved; or

29         (b)  Would substantially reduce the security of and

30  service to be rendered to policyholders of the domestic

31  insurer in this state and elsewhere.

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 1         Section 1287.  Section 628.481, Florida Statutes, is

 2  amended to read:

 3         628.481  Bulk reinsurance; stock insurers.--

 4         (1)  A domestic stock insurer may reinsure all or

 5  substantially all of its insurance in force or a major class

 6  thereof, with another insurer by an agreement of bulk

 7  reinsurance; but no such agreement shall become effective

 8  unless filed with the office department and approved by it in

 9  writing.

10         (2)  The office department shall approve such agreement

11  unless it finds that it is inequitable to the stockholders of

12  the domestic insurer or it would substantially reduce the

13  protection or service to its policyholders.

14         Section 1288.  Section 628.491, Florida Statutes, is

15  amended to read:

16         628.491  Mergers and consolidations; mutual insurers;

17  agreement of bulk reinsurance.--

18         (1)  A domestic mutual insurer may reinsure all or

19  substantially all its business in force, or all or

20  substantially all of a major class thereof, with another

21  insurer, stock or mutual, by an agreement of bulk reinsurance

22  after compliance with this section. No such agreement shall

23  become effective unless filed with the office department and

24  approved by it.

25         (2)  The office department shall approve such agreement

26  if it finds it to be fair and equitable to each domestic

27  insurer involved, and that such reinsurance if effectuated

28  would not substantially reduce the protection or service to

29  its policyholders.

30         (3)  The plan and agreement for such reinsurance must

31  be approved by vote of not less than two-thirds of each

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 1  domestic mutual insurer's members voting thereon at meetings

 2  of members called for the purpose, pursuant to such reasonable

 3  notice and procedure as the office department may approve. If

 4  a life insurer, the right to vote may be limited to members

 5  whose policies are other than term or group policies and have

 6  been in effect for more than 1 year.

 7         (4)  If for reinsurance of a mutual insurer in a stock

 8  insurer, the agreement must provide for payment in cash to

 9  each member of the insurer entitled thereto, as upon

10  conversion of such insurer pursuant to s. 628.441, of his or

11  her equity in the business reinsured as determined under a

12  fair formula approved by the office department, which equity

13  shall be based upon such member's equity in the reserves,

14  assets (whether or not admitted assets), and surplus, if any,

15  of the mutual insurer to be taken over by the stock insurer.

16         Section 1289.  Section 628.501, Florida Statutes, is

17  amended to read:

18         628.501  Mutual member's share of assets on

19  liquidation.--

20         (1)  Upon any liquidation of a domestic mutual insurer,

21  its assets remaining after discharge of its indebtedness,

22  policy obligations, repayment of contributed or borrowed

23  surplus, if any, and expenses of administration, shall be

24  distributed to existing persons who were its members at any

25  time within 5 years next preceding the date such liquidation

26  was authorized or ordered, or date of last termination of the

27  insurer's certificate of authority, whichever date is the

28  earlier; except, that if the office department has reason to

29  believe that those in charge of the management of the insurer

30  have caused or encouraged the reduction of the number of

31  members of the insurer in anticipation of liquidation and for

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 1  the purpose of reducing thereby the number of persons who may

 2  be entitled to share in distribution of the insurer's assets,

 3  it may enlarge the 5 years' qualification period above

 4  provided for by such additional period as it may deem to be

 5  reasonable.

 6         (2)  The distributive share of each such member shall

 7  be in the proportion that the aggregate premiums earned by the

 8  insurer on the policies of the member during the combined

 9  periods of his or her membership bear to the aggregate of all

10  premiums so earned on the policies of all such members.  The

11  insurer may, and if a life insurer shall, make a reasonable

12  classification of its policies so held by such members, and a

13  formula based upon such classification, for determining the

14  equitable distributive share of each such member.  Such

15  classification and formula shall be subject to the approval of

16  the office department.

17         Section 1290.  Subsections (1), (2), and (4) of section

18  628.511, Florida Statutes, are amended to read:

19         628.511  Book entry accounting system.--

20         (1)  The purpose of this section is to authorize

21  domestic insurers to utilize modern systems for holding and

22  transferring securities without physical delivery of

23  securities certificates, subject to appropriate rules of the

24  commission department.

25         (2)  The following terms are defined for use in this

26  section:

27         (a)  "Securities" means instruments as defined in s.

28  678.1021 s. 678.102(1).

29         (b)  "Clearing corporation" means a clearing

30  corporation as defined in s. 678.1021 s. 678.102(3).

31  

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 1         (c)  "Direct participant" means a national bank, state

 2  bank or trust company which maintains an account in its name

 3  in a clearing corporation and through which an insurance

 4  company participates in a clearing corporation.

 5         (d)  "Federal Reserve book-entry system" means the

 6  computerized systems sponsored by the United States Department

 7  of the Treasury and agencies and instrumentalities of the

 8  United States for holding and transferring securities of the

 9  United States Government and such agencies and

10  instrumentalities, respectively, in Federal Reserve banks

11  through banks which are members of the Federal Reserve System

12  or which otherwise have access to such computerized systems.

13         (e)  "Member bank" means a national bank, state bank or

14  trust company which is a member of the Federal Reserve System

15  and through which an insurer participates in the Federal

16  Reserve book-entry system.

17         (4)  The commission may adopt department is authorized

18  to promulgate rules governing the deposit by insurers of

19  securities with clearing corporations and in the Federal

20  Reserve book-entry system.

21         Section 1291.  Section 628.520, Florida Statutes, is

22  amended to read:

23         628.520  Change of domicile of a foreign insurer.--Any

24  insurer which is organized under the laws of any other state

25  for the purpose of writing insurance may become a domestic

26  insurer by complying with all of the requirements of law

27  relative to the organization and licensing of a domestic

28  insurer of the same type and by designating its principal

29  place of business at a place in this state upon approval by

30  the office department. Such domestic insurer shall be entitled

31  to like certificates and licenses to transact business in this

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 1  state and shall be subject to the authority and jurisdiction

 2  of this state.

 3         Section 1292.  Section 628.525, Florida Statutes, is

 4  amended to read:

 5         628.525  Change of domicile of a domestic insurer.--Any

 6  domestic insurer may, upon the approval of the office

 7  department, transfer its domicile to any other state in which

 8  it is admitted to transact the business of insurance; upon

 9  such a transfer it shall cease to be a domestic insurer and

10  shall be admitted to this state, if qualified, as a foreign

11  insurer.  The office department shall approve any such

12  proposed transfer unless it shall determine that such transfer

13  is not in the interest of the policyholders of this state.

14         Section 1293.  Section 628.530, Florida Statutes, is

15  amended to read:

16         628.530  Effects of redomestication.--The certificate

17  of authority, agents appointments and licenses, rates, and

18  other items which the office or department allows, in its

19  discretion, which are in existence at the time any insurer

20  licensed to transact the business of insurance in this state

21  transfers its corporate domicile to this or any other state by

22  merger, consolidation, merger pursuant to s. 607.1107(5), or

23  any other lawful method shall continue in full force and

24  effect upon such transfer if such insurer remains duly

25  qualified to transact the business of insurance in this state.

26  All outstanding policies of any transferring insurer shall

27  remain in full force and effect and need not be endorsed as to

28  the new name of the company or its new location unless so

29  ordered by the office department. Every transferring insurer

30  shall file new policy forms with the office department on or

31  before the effective date of the transfer, but may use

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 1  existing policy forms with appropriate endorsements if allowed

 2  by, and under such conditions as are approved by, the office

 3  department. However, every such transferring insurer shall

 4  notify the office department of the details of the proposed

 5  transfer and shall file promptly any resulting amendments to

 6  corporate documents filed or required to be filed with the

 7  office department.

 8         Section 1294.  Section 628.535, Florida Statutes, is

 9  amended to read:

10         628.535  Authority to adopt promulgate rules.--The

11  commission may department has authority to adopt rules

12  pursuant to ss. 120.536(1) and 120.54 to implement the

13  provisions of this chapter.

14         Section 1295.  Subsections (1) and (9) of section

15  628.6013, Florida Statutes, are amended to read:

16         628.6013  Converted self-insurance fund; trade

17  association; board of directors.--

18         (1)  Any self-insurance fund regulated under the

19  insurance code other than a commercial self-insurance fund

20  may, with the approval of a majority of the members of the

21  fund and after written notice to the sponsoring association

22  and approved by the office department, elect to convert to an

23  assessable mutual insurer in accordance with part I.

24         (9)  A management company may be authorized by the

25  office department to manage and operate an assessable mutual

26  insurer only if its owners, partners, stockholders, officers,

27  or directors, and other persons who directly or indirectly

28  exercise or have the ability to exercise effective control of

29  the management company, possess the competency and business

30  experience to manage and operate an assessable mutual insurer.

31  

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 1         Section 1296.  Subsection (2) of section 628.6014,

 2  Florida Statutes, is amended to read:

 3         628.6014  Annual reports.--

 4         (2)  For financial statements filed on or after January

 5  1, 1998, future investment income may only be reported as an

 6  admitted asset by an assessable mutual which reported future

 7  investment income in financial statements filed with the

 8  former Department of Insurance prior to December 31, 1996.

 9         Section 1297.  Subsections (1) and (4) of section

10  628.6017, Florida Statutes, are amended to read:

11         628.6017  Converting assessable mutual insurer.--

12         (1)  An assessable mutual insurer may become a stock

13  insurer by filing an application which complies with s.

14  628.051 and by submitting a plan of conversion which is

15  approved by the office department. The office department shall

16  not approve any such plan unless the plan:

17         (a)  Is equitable to the insurer's members.

18         (b)  Is subject to approval by vote of not less than

19  two-thirds of the insurer's current members voting thereon in

20  person, by proxy, or by mail at a meeting of members called

21  for the purpose pursuant to such reasonable notice and

22  procedure as may be approved by the office department. In no

23  event shall the failure to vote constitute a vote for

24  approval.

25         (c)  Provides for the determination of the membership

26  interests of each policyholder in the insurer, taking into

27  account the relative corporate equity of the policyholder,

28  other than as to unearned premiums and benefit claims under

29  the policy, under a fair formula approved by the office

30  department.

31  

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 1         (d)  Provides for the payment of consideration to each

 2  policyholder in return for his or her membership interests in

 3  the assessable mutual insurer.

 4         (e)  Provides for the payment of consideration to be

 5  given in exchange for the policyholders' membership interests

 6  in cash, securities of the reorganized insurer, securities of

 7  another company, surplus notes or other evidence of borrowed

 8  surplus, additional insurance, premium credits, additional

 9  benefits, increased dividends, cancellation of future

10  assessment obligations, or other consideration or any

11  combination of any such forms of consideration.

12         (f)  Provides that persons who had been policyholders

13  of the insurer within 3 years prior to the date such plan was

14  submitted to the office department shall participate in the

15  distribution of consideration to policyholders.

16  

17  When the plan of reorganization becomes effective, the

18  assessable mutual insurer shall become a stock insurer and the

19  stock insurer shall be deemed to be a continuation of the

20  corporate existence of the assessable mutual insurer. The

21  provisions of s. 628.441 do not apply to the conversion of an

22  assessable mutual insurer into a stock insurer. The provisions

23  of s. 628.441 shall not apply to the conversion of an

24  assessable mutual insurer to a stock insurer.

25         (4)  An assessable mutual insurer becoming a stock

26  insurer or a nonassessable mutual insurer shall not be subject

27  to s. 627.215 or s. 627.351(5) for 5 years following

28  authorization of the conversion by the office department.

29  However, the converted stock insurer or nonassessable mutual

30  insurer shall file all necessary data required by s. 627.215.

31  Such amounts otherwise subject to s. 627.215(10) shall be

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 1  maintained as surplus as to policyholders and not be available

 2  for dividends for a period of 5 years.

 3         Section 1298.  Subsection (2) of section 628.705,

 4  Florida Statutes, is amended to read:

 5         628.705  Prohibition of stock transfers.--

 6         (2)  Voting shares of the capital stock of a subsidiary

 7  insurance company or the intermediate holding company may not

 8  be acquired by any affiliated member of the holding company

 9  system except where the affiliated member of the mutual

10  holding company system is the majority shareholder.  A number

11  of shares equal to 5 percent of the outstanding voting shares

12  of the capital stock of one corporate member of the Mutual

13  Insurance Holding Company System selected by the mutual

14  insurance holding company may be issued or sold to directors

15  and officers as part of a plan of compensation, and such

16  shares shall not be considered part of the majority shares to

17  be owned by the mutual insurance company under subsection (1).

18  A number of shares equal to an additional 5 percent of the

19  outstanding voting shares of the capital stock of one

20  corporate member of the Mutual Insurance Holding Company

21  System selected by the mutual insurance holding company may be

22  issued or sold to employees, which may not include any officer

23  or director, as part of an employee stock dividend or benefit

24  plan, and such shares shall not be considered part of the

25  majority shares to be owned by the mutual insurance company

26  under subsection (1).  Prior to issuance of shares in excess

27  of the authorized 5 percent to either officers and directors

28  or employees, pursuant to this section, a fairness opinion

29  shall be rendered by an independent authority acceptable to

30  the office department to assure that the long term interests

31  of the shareholders and policyholders are adequately

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 1  protected. The office department shall approve or disapprove

 2  the transaction within 30 days after receipt of the fairness

 3  opinion. Nothing in this section prohibits any officer or

 4  director from purchasing shares of stock at market value which

 5  are not part of a plan of compensation, in accordance with the

 6  requirements of s. 628.461, and, if such stock is not

 7  regularly traded on a national stock exchange, the officer or

 8  director purchasing the shares of stock is responsible for

 9  establishing its market value.

10         Section 1299.  Subsection (2) of section 628.707,

11  Florida Statutes, is amended to read:

12         628.707  Applicability of general corporation

13  statutes.--The applicable statutes of this state relating to

14  the powers and procedures of domestic private corporations

15  formed for profit shall apply to domestic mutual insurance

16  holding companies, except:

17         (2)  The articles of incorporation of the mutual

18  insurance holding company, and any amendment to such articles

19  or restatement of such articles shall be subject to the

20  approval of the office department for compliance with the

21  provisions of this act prior to filing with the Department of

22  State, and shall contain the name of the mutual insurance

23  holding company, which shall include the word "Mutual."

24         Section 1300.  Subsections (3), (4), and (5) of section

25  628.711, Florida Statutes, are amended to read:

26         628.711  Plan of reorganization.--

27         (3)  Following the adoption of a plan of

28  reorganization, and prior to the meeting of the mutual

29  insurance company members to approve the plan, the mutual

30  insurance company shall submit to the office department the

31  following:

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 1         (a)  The plan of reorganization, as adopted.

 2         (b)  The form of notice to be sent to the mutual

 3  insurance company members, informing them of their right to

 4  vote on the plan of reorganization.

 5         (c)  The form of proxy statement to be sent to the

 6  mutual  insurance company members, informing them of their

 7  right to vote by proxy on the plan of reorganization, and

 8  describing the plan.

 9         (d)  The form of proxy to be sent to the mutual

10  insurance company members to solicit their vote on the plan of

11  reorganization.

12         (e)  Proposed articles of incorporation, merger, or

13  consolidation, restatements of or amendments to articles of

14  incorporation or bylaws, and plans of merger or consolidation,

15  with respect to each entity to be organized, reorganized, or

16  otherwise subject to such action under the plan of

17  reorganization.

18         (f)  A proposed business plan for the 3 years following

19  the date of the reorganization.

20         (g)  An audited financial statement prepared on a

21  statutory basis consistent with the Florida Insurance Code,

22  including an actuarial opinion for the most recent calendar

23  year ended, or a copy thereof, if the statement was previously

24  filed with the office department.

25         (4)  The office department may hold a public hearing to

26  allow public comment on the plan of reorganization. Any

27  hearing must be held within 30 days after receipt by the

28  office department of a completed plan of reorganization. The

29  office department may not approve a plan of reorganization

30  unless it finds that it is fair and equitable to the members

31  of the mutual insurance company. Ninety days after filing, the

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 1  plan of reorganization shall be deemed approved unless it has

 2  previously been approved or disapproved by the office

 3  department. The office department shall inform the mutual

 4  insurer of the specific reasons for the disapproval of any

 5  plan of reorganization.

 6         (5)(a)  A plan of reorganization adopted by the board

 7  of directors of the applicant may be:

 8         1.  Amended by the board of directors of the applicant

 9  in response to the comments or recommendations of the office

10  department, or any other state or federal agency or

11  governmental entity, before any solicitation of proxies from

12  members of the mutual insurance company to vote on the plan of

13  reorganization, or at any time with the consent of the office

14  department, except that any material amendment after the

15  members' approval shall require the members' approval; or

16         2.  Terminated  by the board of directors of the

17  applicant at any time before members of the mutual insurance

18  company vote on the plan of reorganization and, otherwise, at

19  any time with the consent of the office department.

20         (b)  The plan of reorganization is approved upon the

21  affirmative vote of at least a majority of the votes cast by

22  members of the mutual insurance company, notwithstanding

23  quorum or voting action requirements otherwise applicable to

24  the mutual insurance company to the contrary.

25         (c)  Within 30 days after members have approved the

26  plan of reorganization, the applicant must file with the

27  office department the minutes of the meeting at which the plan

28  of reorganization was approved.

29         Section 1301.  Section 628.713, Florida Statutes, is

30  amended to read:

31  

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 1         628.713  Dividends.--A mutual insurance holding company

 2  shall not be authorized to pay dividends or make distributions

 3  to mutual insurance holding company members except as may be

 4  expressly approved by the office department. Neither the

 5  adoption nor the implementation of a plan of reorganization

 6  shall be deemed to give rise to any obligation by or on behalf

 7  of a mutual insurance company to make any distribution or

 8  payment to any member or policyholder, or to any other person,

 9  fund, or entity of any nature whatsoever, in connection with

10  the ownership, control, benefits, policies, purpose, or nature

11  of the mutual insurance company or otherwise, including, but

12  not limited to, requirements imposed by the conversion and

13  bulk reinsurance provisions of ss. 628.441 and 628.491.

14         Section 1302.  Section 628.715, Florida Statutes, is

15  amended to read:

16         628.715  Merger and acquisitions.--Subject to

17  applicable requirements of this chapter, a mutual insurance

18  holding company may:

19         (1)(a)  Merge or consolidate with, or acquire the

20  assets of, a mutual insurance holding company licensed

21  pursuant to this act or any similar entity organization

22  pursuant to laws of any other state;

23         (b)  Either alone or together with one or more

24  intermediate stock holding companies, or other subsidiaries,

25  directly or indirectly acquire the stock of a stock insurance

26  company or a mutual insurance company that reorganizes under

27  this act or the law of its state of organization;

28         (c)  Together with one or more of its stock insurance

29  company subsidiaries, acquire the assets of a stock insurance

30  company or a mutual insurance company;

31  

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 1         (d)  Acquire a stock insurance company through the

 2  merger of such stock insurance subsidiary with a stock

 3  insurance company or interim stock insurance company

 4  subsidiary of the mutual insurance holding company;

 5         (e)  Acquire the stock or assets of any other person to

 6  the same extent as would be permitted for any not-for-profit

 7  corporation under chapter 617 or, if the mutual insurance

 8  holding company writes insurance, a mutual insurance company;

 9         (f)  Jointly, with a domestic or foreign mutual

10  insurance company which redomesticates pursuant to s. 628.520,

11  file an application with the office department, pursuant to

12  the provisions of this part, to merge the domestic or foreign

13  mutual insurance company policyholder's membership interests

14  into the mutual insurance holding company.  The reorganizing

15  mutual insurance company may merge with the mutual insurance

16  holding company's stock subsidiary or continue its corporate

17  existence as a domestic stock insurance company subsidiary.

18  The members of the foreign mutual insurance company may

19  approve in a contemporaneous vote both the redomestication

20  plan and the agreement for merger and reorganization; or

21         (g)  Merge or consolidate with, or acquire the assets

22  of, a domestic or foreign reciprocal insurance company, a

23  group self-insurance fund, or any other similar entity.

24         (2)  A reorganization pursuant to this section is

25  subject to the applicable procedures prescribed by the laws of

26  this state applying to corporations formed for profit, except

27  as otherwise provided in this subsection.

28         (a)  The plan and agreement for merger shall be

29  submitted to and approved by a majority of the members,

30  policyholders, or subscribers of each domestic mutual

31  insurance holding company, mutual insurance company, stock

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 1  insurance company, or domestic or foreign reciprocal insurance

 2  company, involved in the merger who vote either in person or

 3  by proxy thereon at meetings called for the purposes pursuant

 4  to such reasonable notice and procedure as has been approved

 5  by the office department.

 6         (b)  No such merger shall be effectuated unless in

 7  advance thereof, the plan and agreement therefor have been

 8  filed with the office department and approved by it after a

 9  public hearing, which shall be held within 90 days after

10  receipt by the office department of such plan and agreement.

11  The office department may retain outside consultants to

12  evaluate the merger. The domestic mutual insurance holding

13  company shall pay reasonable costs associated with retaining

14  such consultants.  Such payments shall be made directly to the

15  consultant. The office department shall give such approval

16  unless it finds such plan or agreement:

17         1.  Is inequitable to the policyholders of any domestic

18  insurer involved in the merger or the members of any domestic

19  mutual insurance holding company involved in the merger; or

20         2.  Would substantially reduce the security of and

21  service to be rendered to policyholders of a domestic insurer

22  in this state.

23         (c)  All of the initial shares of the capital stock of

24  the reorganized subsidiary insurance company shall be issued

25  either to the mutual insurance holding company, or to an

26  intermediate holding company which is wholly owned by the

27  mutual insurance holding company. The membership interests of

28  the policyholders of the reorganized insurance company shall

29  become membership interests in the mutual insurance holding

30  company. Policyholders of the reorganized insurance company

31  shall be members of the mutual insurance holding company in

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 1  accordance with the articles of incorporation and bylaws of

 2  the mutual insurance holding company. The mutual insurance

 3  holding company shall at all times own a majority of the

 4  voting shares of the capital stock of the reorganized

 5  subsidiary insurance company.

 6         (d)  For property and casualty insurers, the rights of

 7  the members of the merging entities under s. 628.729, for a

 8  period of 3 years after the merger, shall be the proportionate

 9  share of the total surplus of the merging entities as

10  determined by the percentage of the surplus contributed by

11  each of the merging entities to the total surplus of the

12  surviving entity on the date of the merger.

13         Section 1303.  Section 628.717, Florida Statutes, is

14  amended to read:

15         628.717  Filing of articles of incorporation.--

16         (1)  No mutual insurance holding company shall be

17  formed unless its articles of incorporation are approved by

18  the office department prior to filing the same with and

19  approval by the Department of State as provided by law.

20         (2)  The office department shall promptly examine the

21  articles of incorporation; and, if it finds that the articles

22  of incorporation comply with law, the office department shall

23  endorse its approval upon each of the originals, place one on

24  file in its office, and return the remaining sets to the

25  incorporators. The incorporators shall promptly file such

26  endorsed articles of incorporation with the Department of

27  State. The articles of incorporation shall be effective when

28  filed with and approved by the Department of State.

29         Section 1304.  Subsection (2) of section 628.719,

30  Florida Statutes, is amended to read:

31         628.719  Amendment of articles of incorporation.--

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 1         (2)(a)  Upon adoption of an amendment, the mutual

 2  insurance holding company shall make under its corporate seal

 3  a certificate thereof, setting forth the amendment and the

 4  date and manner of the adoption thereof, which certificate

 5  shall be executed by the mutual insurance holding company's

 6  president or vice president and secretary or assistant

 7  secretary and acknowledged before an officer authorized to

 8  take acknowledgments. The mutual insurance holding company

 9  shall deliver the originals of the certificate to the office

10  department.

11         (b)  The office department shall promptly examine the

12  certificate of amendment, and, if the office department finds

13  that the certificate and the amendment comply with law, the

14  office department shall endorse its approval upon each of the

15  originals, place one on file in its office, and return the

16  remaining sets to the mutual insurance holding company. The

17  mutual insurance holding company shall promptly file such

18  endorsed certificates of amendment with the Department of

19  State. The amendment shall be effective when filed with and

20  approved by the Department of State.

21         Section 1305.  Subsection (3) of section 628.721,

22  Florida Statutes, is amended to read:

23         628.721  Bylaws.--

24         (3)  The mutual insurance holding company shall file

25  within 30 days with the office department a copy, certified by

26  the mutual insurance holding company's secretary, of its

27  bylaws and of every modification thereof or addition thereto.

28  The office department shall promptly disapprove any bylaw

29  provision deemed by it to be unlawful, unreasonable,

30  inadequate, unfair, or detrimental to the proper interests or

31  protection of the mutual insurance holding company's members

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 1  or any class thereof. The insurer shall not, after receiving

 2  written notice of such disapproval and during the existence

 3  thereof, effectuate any bylaw provision disapproved.

 4         Section 1306.  Section 628.725, Florida Statutes, is

 5  amended to read:

 6         628.725  Notice of change of director or officer.--A

 7  mutual insurance holding company shall give the office

 8  department written notice of any change of personnel among the

 9  directors or principal officers of the mutual insurance

10  holding company within 45 days after such change. The written

11  notice shall include all information necessary to allow the

12  office department to determine that the mutual insurance

13  holding company's subsidiary stock insurers will be in

14  compliance with s. 624.404(3) and, at a minimum, shall contain

15  information similar to the information required by s.

16  628.051(2)(b), (c), and (d) for directors of insurance

17  companies.

18         Section 1307.  Subsection (1) of section 628.729,

19  Florida Statutes, is amended to read:

20         628.729  Member's share of assets on voluntary

21  dissolution.--

22         (1)  Upon any voluntary dissolution of a domestic

23  mutual insurance holding company, its assets remaining after

24  discharge of its indebtedness, if any, and expenses of

25  administration, shall be distributed to existing persons who

26  were its members at any time within the 3-year period

27  preceding the date such liquidation was authorized or ordered,

28  or date of last termination of the insurer's certificate of

29  authority, whichever date is earlier; except, if the office

30  department has reason to believe that those in charge of the

31  management of the mutual insurance holding company have caused

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 1  or encouraged the reduction of the number of members of the

 2  insurer in anticipation of liquidation and for the purpose of

 3  reducing thereby the number of persons who may be entitled to

 4  share in distribution of the insurer's assets, the office

 5  department may enlarge the 3-year qualification period by such

 6  additional time as the office department may deem to be

 7  reasonable.

 8         Section 1308.  Section 628.730, Florida Statutes, is

 9  amended to read:

10         628.730  Merger with intermediate holding company.--

11         (1)  A mutual insurance holding company may, pursuant

12  to a plan and agreement of merger approved by the office

13  department, in accordance with s. 628.715(2)(b), merge into

14  its intermediate holding company. The surviving intermediate

15  holding company shall assume all of the assets and liabilities

16  of the mutual insurance holding company, and all of the stock

17  of the intermediate holding company owned by the mutual

18  insurance holding company immediately prior to the merger

19  shall be distributed to existing persons who were members of

20  the mutual insurance holding company at any time within the

21  3-year period preceding the date of such merger.

22         (2)  The distributive share of each such member shall

23  be determined by a formula based upon such reasonable

24  classifications of members as the office department may

25  approve.

26         (3)  For purposes of creating a public market for the

27  shares of the intermediate holding company, the mutual

28  insurance holding company may, immediately prior to the

29  merger, sell or cause the intermediate holding company to sell

30  to the public up to 25 percent of its capital stock

31  

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 1  representing no more than 25 percent of the voting stock of

 2  the intermediate holding company.

 3         (4)  The office department shall hold a public hearing

 4  to allow public comment on the plan and agreement of merger.

 5  The hearing must be held within 90 days after receipt of the

 6  office department of the proposed plan and agreement of

 7  merger.

 8         (5)  The plan and agreement of merger shall be

 9  submitted to the members of the mutual holding company for

10  their approval and shall take effect only if approved by a

11  majority of the members of the mutual insurance holding

12  company who vote either in person or by proxy on such merger

13  at a meeting called for the purpose of voting on such merger,

14  pursuant to reasonable notice and procedures as approved by

15  the office department.

16         Section 1309.  Section 628.733, Florida Statutes, is

17  amended to read:

18         628.733  Converting mutual insurance holding company.--

19         (1)  A mutual insurance holding company may become a

20  stock holding company under such plan and procedure as may be

21  approved by the office department.

22         (2)  The office department shall not approve any such

23  plan and procedure unless:

24         (a)  The plan and procedure is subject to approval by

25  vote of not less than a majority of the company's current

26  members voting thereon in person, by proxy, or by mail at a

27  meeting of members called for the purpose pursuant to such

28  reasonable notice and procedure as may be approved by the

29  office department.

30         (b)  The corporate equity of each member is

31  determinable under a fair formula approved by the office

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 1  department, which equity shall be based upon not more than the

 2  company's net assets.

 3         (c)  The persons entitled to participate in the

 4  distribution of stock shall include all current members and

 5  all existing persons who had been members within 3 years prior

 6  to the date such plan was submitted to the office department.

 7         (d)  The plan calls for the distribution to each person

 8  as specified in paragraph (c) of capital stock or other

 9  property of the stock holding company, using each person's

10  equity as determined under paragraph (b).

11         (e)  The plan gives to each member as specified in

12  paragraph (c) a preemptive right to acquire his or her

13  proportionate part of all of the proposed capital stock of the

14  new stock holding company, within a designated reasonable

15  period, and to apply upon the purchase thereof the amount of

16  his equity as determined under paragraph (b).

17         (f)  Shares are so offered to policyholders at a price

18  not greater than to be thereafter offered to others.

19         (g)  The plan provides for payment of cash to each

20  member not electing to apply his or her equity towards the

21  purchase price of stock to which he or she is preemptively

22  entitled. The amount so paid shall be not less than 50 percent

23  of the amount of his or her equity not so used for the

24  purchase of stock. Such cash payment together with stock so

25  purchased, if any, shall constitute full payment and discharge

26  of the member's corporate equity in such mutual insurance

27  holding company.

28         Section 1310.  Section 628.801, Florida Statutes, is

29  amended to read:

30         628.801  Insurance holding companies; registration;

31  regulation.--Every insurer which is authorized to do business

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 1  in this state and which is a member of an insurance holding

 2  company shall register with the office department and be

 3  subject to regulation with respect to its relationship to such

 4  holding company as provided by rule or statute. The commission

 5  department shall adopt rules establishing the information and

 6  form required for registration and the manner in which

 7  registered insurers and their affiliates shall be regulated.

 8  The rules shall apply to domestic insurers, foreign insurers,

 9  and commercially domiciled insurers, except a foreign insurer

10  domiciled in states that are accredited by the National

11  Association of Insurance Commissioners by December 31, 1995.

12  Except to the extent of any conflict with this code, the rules

13  must include all requirements and standards of ss. 4 and 5 of

14  the Insurance Holding Company System Regulatory Act and the

15  Insurance Holding Company System Model Regulation of the

16  National Association of Insurance Commissioners, as the

17  Regulatory Act and the Model Regulation existed on January 1,

18  1997, and may include a prohibition on oral contracts between

19  affiliated entities. Upon request, the office department may

20  waive filing requirements under this section for a domestic

21  insurer that is the subsidiary of an insurer that is in full

22  compliance with the insurance holding company registration

23  laws of its state of domicile, which state is accredited by

24  the National Association of Insurance Commissioners.

25         Section 1311.  Subsection (1) of section 628.802,

26  Florida Statutes, is amended to read:

27         628.802  Injunction.--

28         (1)  Whenever it appears to the office department that

29  any insurer or any director, officer, or employee thereof, or

30  appears to the department that any agent thereof has committed

31  or is about to commit a violation of this part or of any rule

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 1  or order issued by the commission, office, or department

 2  pursuant to this part, the office or department may apply to

 3  the circuit court in and for Leon County for an order

 4  enjoining the insurer, director, officer, employee, or agent

 5  from violating or continuing to violate this part or the rule

 6  or order and for other equitable relief as the nature of the

 7  case and the interest of the insurer's policyholders,

 8  creditors, and shareholders or the public may require.

 9         Section 1312.  Section 628.803, Florida Statutes, is

10  amended to read:

11         628.803  Sanctions.--

12         (1)  Any company failing, without just cause, to file

13  any registration statement or certificate of exemption

14  required to be filed pursuant to commission department rules

15  relating to this part shall, in addition to other penalties

16  prescribed under the Florida Insurance Code, be subject to pay

17  a penalty of $100 for each day's delay, not to exceed a total

18  of $10,000.

19         (2)  Every director or officer of an insurance holding

20  company system who knowingly violates or participates in, or

21  who knowingly directs any of the officers or agents of the

22  company to engage in transactions or make investments which

23  have not been properly filed or approved or which violate

24  commission department rules relating to this part, shall pay,

25  in their individual capacity, a civil forfeiture of not more

26  than $5,000 per violation. In determining the amount of the

27  civil forfeiture, the office department shall take into

28  account the appropriateness of the forfeiture with respect to

29  the gravity of the violation, and the history of previous

30  violations.

31  

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 1         (3)  Whenever it appears to the office department that

 2  any insurer subject to this part or any director, officer,

 3  employee, or agent thereof has engaged in any transaction or

 4  entered into a contract which violates commission department

 5  rules relating to this part, the office department may order

 6  the insurer to cease and desist immediately any further

 7  activity under that transaction or contract. The office

 8  department may also order the insurer to void any such

 9  transaction or contract and restore the status quo if this

10  action is in the best interest of the policyholders,

11  creditors, or public.

12         (4)  Any officer, director, or employee of an insurance

13  holding company system who willfully and knowingly subscribes

14  to, or makes or causes to be made, any false statements, false

15  reports, or false filings with the intent to deceive the

16  office department in the performance of its duties under this

17  part is guilty of a felony of the third degree, punishable as

18  provided in s. 775.082, s. 775.083, or s. 775.084.

19         Section 1313.  Subsections (1) and (3) of section

20  628.905, Florida Statutes, are amended to read:

21         628.905  Licensing; authority.--

22         (1)  Any captive insurer, when permitted by its charter

23  or articles of incorporation, may apply to the office

24  department for a license to provide commercial property,

25  commercial casualty, and commercial marine insurance coverage

26  other than workers' compensation and employer's liability

27  insurance coverage, except that an industrial insured captive

28  insurer may apply for a license to provide workers'

29  compensation and employer's liability insurance as set forth

30  in subsection (6).

31  

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 1         (3)  In addition to information otherwise required by

 2  this code, each applicant captive insurer shall file with the

 3  office department evidence of the adequacy of the loss

 4  prevention program of its insureds.

 5         Section 1314.  Subsection (2) of section 628.911,

 6  Florida Statutes, is amended to read:

 7         628.911  Reports and statements.--

 8         (2)  A captive insurer shall, within 60 days after the

 9  end of its fiscal year and as often as the office department

10  may deem necessary, submit to the office department a report

11  of its financial condition verified by oath of two of its

12  executive officers. The commission department may adopt

13  promulgate by rule the form in which captive insurers shall

14  report.

15         Section 1315.  Subsections (1), (2), and (3) of section

16  628.913, Florida Statutes, are amended to read:

17         628.913  Reinsurance.--

18         (1)(a)  A ceding captive insurer may reinsure all or

19  any part of any particular risk or class of risks with:

20         1.  An assuming insurer authorized by the office

21  department to transact such line of insurance or reinsurance

22  in this state. Subject to the other requirements of this code,

23  credit may be taken for reinsurance with an authorized

24  insurer.

25         2.  An assuming insurer approved by the office

26  department to transact such line of reinsurance in this state.

27  The office department shall approve only solvent insurers

28  meeting the criteria established for authorized insurers in

29  this state. From time to time, the office department shall

30  publish a list of insurers approved pursuant to this

31  subsection. Subject to the other requirements of this code,

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 1  credit may be taken for reinsurance with an approved

 2  reinsurer.

 3         3.  An assuming underwriting member of an insurance

 4  exchange domiciled in any other state or jurisdiction in the

 5  United States provided the insurance exchange presents to the

 6  office department for its approval, and maintains,

 7  satisfactory evidence that such assuming underwriting member

 8  maintains the standards and meets the financial requirements

 9  applicable to an authorized insurer. Subject to the other

10  provisions of this code, credit may be taken for reinsurance

11  with members approved under this subsection by the office

12  department.

13         4.  A group of individual unincorporated alien insurers

14  which maintains funds in an amount not less than $50 million

15  held in trust for United States policyholders and

16  beneficiaries in a bank or trust company that is subject to

17  supervision by any state of the United States or that is a

18  member of the Federal Reserve System and which group satisfies

19  the office department by annually filing evidence that it can

20  meet its obligations under its reinsurance agreements. Subject

21  to the other provisions of this code, credit may be taken for

22  reinsurance with groups approved under this subsection by the

23  office department.

24         (b)  Credit in accounting and financial statements on

25  account of reinsurance ceded to an unauthorized or unapproved

26  reinsurer may be allowed only:

27         1.  When it is demonstrated by the ceding captive

28  insurer to the satisfaction of the office department that such

29  reinsurer maintains the standards and meets the financial

30  requirements applicable to an authorized insurer;

31  

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 1         2.  To the extent of deposits by, or funds withheld

 2  from, such reinsurer pursuant to express provision therefor in

 3  the reinsurance contract as security for the payment of the

 4  obligations thereunder if such deposits or funds are held

 5  subject to withdrawal by, and under the control of, the ceding

 6  captive insurer or such deposits or funds are placed in trust

 7  for such purposes in a bank which is a member of the Federal

 8  Reserve System if withdrawals from the trust cannot be made

 9  without the consent of the ceding captive insurer.  The funds

10  withheld may be cash or securities which are qualified as

11  admitted assets under part II of chapter 625 and which have a

12  market value equal to or greater than the credit taken; or

13         3.  To the extent that the amount of a clean and

14  irrevocable letter of credit, issued for a term of not less

15  than 1 year and in conformity with the requirements set forth

16  in this subparagraph, equals or exceeds the liability of an

17  unauthorized or unapproved reinsurer for unearned premiums,

18  outstanding losses, and an adequate reserve for incurred but

19  not reported losses under a specific reinsurance agreement.

20  The requirements are that such a clean and irrevocable letter

21  of credit be issued under arrangements satisfactory to the

22  office department as constituting security to the ceding

23  captive insurer substantially equal to that of a deposit under

24  subparagraph 2. and that the letter be issued by a banking

25  institution which is a member of the Federal Reserve System

26  and which has financial standing satisfactory to the office

27  commissioner.

28         (2)  The office department shall disallow any credit

29  which it finds would be contrary to the proper interests of

30  the policyholders or stockholders of a ceding captive insurer.

31  

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 1         (3)  No credit may be allowed for reinsurance in an

 2  unauthorized or unapproved assuming insurer unless such

 3  insurer designates the Chief Financial Officer commissioner or

 4  a person resident in the United States as agent for service of

 5  process in any action arising out of, or in connection with,

 6  such reinsurance.

 7         Section 1316.  Section 628.917, Florida Statutes, is

 8  amended to read:

 9         628.917  Insolvency and liquidation.--In the event that

10  a captive insurer is insolvent as defined in chapter 631, the

11  office department shall liquidate the captive insurer pursuant

12  to the provisions of part I of chapter 631; except that the

13  office department shall make no attempt to rehabilitate such

14  insurer.

15         Section 1317.  Section 629.081, Florida Statutes, is

16  amended to read:

17         629.081  Organization of reciprocal insurer.--

18         (1)  Twenty-five or more persons domiciled in this

19  state may organize a domestic reciprocal insurer and make

20  application to the office department for a certificate of

21  authority to transact insurance.

22         (2)  The proposed attorney shall fulfill the

23  requirements of and shall execute and file with the office

24  department, when applying for a certificate of authority, a

25  declaration setting forth:

26         (a)  The name of the insurer;

27         (b)  The location of the insurer's principal office,

28  which shall be the same as that of the attorney and shall be

29  maintained within this state;

30         (c)  The kinds of insurance proposed to be transacted;

31  

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 1         (d)  The names and addresses of the original

 2  subscribers;

 3         (e)  The designation and appointment of the proposed

 4  attorney and a copy of the power of attorney;

 5         (f)  The names and addresses of the officers and

 6  directors of the attorney, if a corporation, or of its

 7  members, if other than a corporation;

 8         (g)  The powers of the subscribers' advisory committee,

 9  and the names and terms of office of the members thereof;

10         (h)  That all moneys paid to the reciprocal shall,

11  after deducting therefrom any sum payable to the attorney, be

12  held in the name of the insurer and for the purposes specified

13  in the subscribers' agreement;

14         (i)  A copy of the subscribers' agreement;

15         (j)  A statement that each of the original subscribers

16  has in good faith applied for insurance of a kind proposed to

17  be transacted, and that the insurer has received from each

18  such subscriber the full premium or premium deposit required

19  for the policy applied for, for a term of not less than 6

20  months at an adequate rate theretofore filed with and approved

21  by the office department;

22         (k)  A statement of the financial condition of the

23  insurer, a schedule of its assets, and a statement that the

24  surplus as required by s. 629.071 is on hand; and

25         (l)  A copy of each policy, endorsement, and

26  application form it then proposes to issue or use.

27  

28  Such declaration shall be acknowledged by the attorney before

29  an officer authorized to take acknowledgments.

30         Section 1318.  Subsection (4) of section 629.101,

31  Florida Statutes, is amended to read:

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 1         629.101  Power of attorney.--

 2         (4)  The terms of any power of attorney or agreement

 3  collateral thereto shall be reasonable and equitable, and no

 4  such power or agreement shall be used or be effective in this

 5  state unless filed with the office department.

 6         Section 1319.  Subsection (1) and (3) of section

 7  629.121, Florida Statutes, are amended to read:

 8         629.121  Attorney's bond.--

 9         (1)  Concurrently with the filing of the declaration

10  provided for in s. 629.081, the attorney of a domestic

11  reciprocal insurer shall file with the office department a

12  bond in favor of this state for the benefit of all persons

13  damaged as a result of breach by the attorney of the

14  conditions of his or her bond as set forth in subsection (2).

15  The bond shall be executed by the attorney and by an

16  authorized corporate surety and shall be subject to the

17  approval of the office department.

18         (3)  The bond shall provide that it is not subject to

19  cancellation unless 30 days' advance notice in writing of

20  cancellation is given both the attorney and the office

21  department.

22         Section 1320.  Section 629.131, Florida Statutes, is

23  amended to read:

24         629.131  Deposit in lieu of bond.--In lieu of the bond

25  required under s. 629.121, the attorney may maintain on

26  deposit with through the office of the department a like

27  amount in value of securities qualified for deposit under s.

28  625.52 and subject to the same conditions as the bond.

29         Section 1321.  Section 629.161, Florida Statutes, is

30  amended to read:

31  

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 1         629.161  Contributions to insurer.--The attorney or

 2  other parties may advance to a domestic reciprocal insurer

 3  upon reasonable terms such funds as it may require from time

 4  to time in its operations. Sums so advanced shall not be

 5  treated as a liability of the insurer and, except upon

 6  liquidation of the insurer, shall not be withdrawn or repaid

 7  except out of the insurer's realized earned surplus in excess

 8  of its minimum required surplus.  No such withdrawal or

 9  repayment shall be made without the advance approval of the

10  office department. This section does not apply as to bank

11  loans or to loans made upon security.

12         Section 1322.  Subsection (2) of section 629.171,

13  Florida Statutes, is amended to read:

14         629.171  Annual statement.--

15         (2)  The statement shall be supplemented by such

16  information as may be required by the office department

17  relative to the affairs and transactions of the attorney

18  insofar as they relate to the reciprocal insurer.

19         Section 1323.  Section 629.181, Florida Statutes, is

20  amended to read:

21         629.181  Financial condition; method of

22  determining.--In determining the financial condition of a

23  reciprocal insurer, the office department shall apply the

24  following rules:

25         (1)  The surplus deposits of subscribers shall be

26  allowed as assets, except that any premium deposits delinquent

27  for 90 days shall first be charged against such surplus

28  deposit.

29         (2)  An assessment levied upon subscribers, but not

30  collected, shall not be allowed as an asset.

31  

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 1         (3)  The contingent liability of subscribers shall not

 2  be allowed as an asset.

 3         Section 1324.  Subsection (1) of section 629.231,

 4  Florida Statutes, is amended to read:

 5         629.231  Assessments.--

 6         (1)  Assessments may from time to time be levied upon

 7  subscribers of a domestic reciprocal insurer liable therefor

 8  under the terms of their policies by the attorney upon

 9  approval in advance by the subscribers' advisory committee and

10  the office department, or by the department as receiver in

11  liquidation of the insurer.

12         Section 1325.  Section 629.241, Florida Statutes, is

13  amended to read:

14         629.241  Time limit for assessments.--Every subscriber

15  of a domestic reciprocal insurer having contingent liability

16  shall be liable for, and shall pay his or her share of, any

17  assessment, as computed and limited in accordance with this

18  chapter, if:

19         (1)  While his or her policy is in force or within 4

20  years after its termination, the subscriber is notified by

21  either the attorney or the office department of its intentions

22  to levy such assessment; or

23         (2)  An order to show cause why a receiver,

24  conservator, rehabilitator, or liquidator of the insurer

25  should not be appointed is issued while the subscriber's

26  policy is in force or within 4 years after its termination.

27         Section 1326.  Section 629.261, Florida Statutes, is

28  amended to read:

29         629.261  Nonassessable policies.--

30         (1)  If a reciprocal insurer has a surplus as to

31  policyholders required of a domestic stock insurer authorized

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 1  to transact like kinds of insurance, upon application of the

 2  attorney and as approved by the subscribers' advisory

 3  committee the office department shall issue its certificate

 4  authorizing the insurer to extinguish the contingent liability

 5  of subscribers under its policies then in force in this state

 6  and to omit provisions imposing contingent liability in all

 7  policies delivered or issued for delivery in this state for so

 8  long as all such surplus remains unimpaired.

 9         (2)  Upon impairment of such surplus, the office

10  department shall forthwith revoke the certificate. Such

11  revocation shall not render subject to contingent liability

12  any policy then in force and for the remainder of the period

13  for which the premium has theretofore been paid; but, after

14  such revocation, no policy shall be issued or renewed without

15  providing for contingent assessment liability of the

16  subscriber.

17         (3)  The office department shall not authorize a

18  domestic reciprocal insurer so to extinguish the contingent

19  liability of any of its subscribers or in any of its policies

20  to be issued, unless it qualifies to and does extinguish such

21  liability of all its subscribers and in all such policies for

22  all kinds of insurance transacted by it; except that, if

23  required by the laws of another state in which the insurer is

24  transacting insurance as an authorized insurer, the insurer

25  may issue policies providing for the contingent liability of

26  such of its subscribers as may acquire such policies in such

27  state, and need not extinguish the contingent liability

28  applicable to policies theretofore in force in such state.

29         Section 1327.  Section 629.281, Florida Statutes, is

30  amended to read:

31  

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 1         629.281  Subscribers' share in assets.--Upon the

 2  liquidation of a domestic reciprocal insurer, its assets

 3  remaining after discharge of its indebtedness and policy

 4  obligations, the return of any contributions of the attorney

 5  or other persons to its surplus made as provided in s.

 6  629.161, and the return of any unused premium, savings, or

 7  credits then standing on subscribers' accounts shall be

 8  distributed to its subscribers who were such within the 12

 9  months prior to the last termination of its certificate of

10  authority, according to such reasonable formula as the office

11  approves department may approve.

12         Section 1328.  Subsections (1) and (3) of section

13  629.291, Florida Statutes, are amended to read:

14         629.291  Merger or conversion.--

15         (1)  A domestic reciprocal insurer, upon affirmative

16  vote of not less than two-thirds of its subscribers who vote

17  on such merger pursuant to due notice and the approval of the

18  office department of the terms therefor, may merge with

19  another reciprocal insurer or be converted to a stock or

20  mutual insurer.

21         (3)  The office department shall not approve any plan

22  for such merger or conversion which is inequitable to

23  subscribers or which, if for conversion to a stock insurer,

24  does not give each subscriber preferential right to acquire

25  stock of the proposed insurer proportionate to his or her

26  interest in the reciprocal insurer, as determined in

27  accordance with s. 629.281, and a reasonable length of time

28  within which to exercise such right.

29         Section 1329.  Subsections (2) and (3) of section

30  629.301, Florida Statutes, are amended to read:

31         629.301  Impaired reciprocal insurers.--

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 1         (2)  If the attorney fails to make up such deficiency

 2  or to make the assessment within 30 days after the office

 3  department orders him or her to do so, or if the deficiency is

 4  not fully made up within 60 days after the date the assessment

 5  was made, the insurer shall be deemed insolvent and shall be

 6  proceeded against as authorized by this code.

 7         (3)  If liquidation of such an insurer is ordered, an

 8  assessment shall be levied upon the subscribers for such an

 9  amount, subject to limits as provided by this chapter, as the

10  office department determines to be necessary to discharge all

11  liabilities of the insurer, exclusive of any funds contributed

12  by the attorney or other persons, but including the reasonable

13  cost of the liquidation.

14         Section 1330.  Section 629.401, Florida Statutes, is

15  amended to read:

16         629.401  Insurance exchange.--

17         (1)  There may be created one or more insurance

18  exchanges, with one or more offices each, subject to such

19  rules as are adopted may be promulgated by the commission

20  commissioner. For the purposes of this section, the term

21  "exchange" applies to any such insurance exchange proposed or

22  created under this section. The purposes of the exchange are:

23         (a)  To provide a facility for the underwriting of:

24         1.  Reinsurance of all kinds of insurance.

25         2.  Direct insurance of all kinds on risks located

26  entirely outside the United States.

27         3.  Surplus lines insurance for risks located in this

28  state eligible for export under s. 626.916 or s. 626.917 and

29  placed through a licensed Florida surplus lines agent subject

30  to compliance with the provisions of ss. 626.921, 626.922,

31  626.923, 626.924, 626.929, 626.9295, 626.930, and 626.931.

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 1  With respect to compliance with s. 626.924, the required

 2  legend may refer to any coverage provided for by a security

 3  fund established under paragraph (3)(d).

 4         4.  Surplus lines insurance in any other state subject

 5  to the applicable surplus lines laws of such other state for

 6  risks located entirely outside of this state.

 7         (b)  To manage the facility authorized by this section,

 8  in accordance with rules adopted promulgated by the commission

 9  commissioner.

10         (c)  In no event shall the exchange be considered to be

11  an underwriter or broker with respect to any contract of

12  insurance or reinsurance written by a member of the exchange,

13  and the exchange shall not incur any liability therefor.

14         (2)  The operation of this subsection shall become

15  effective with respect to any exchange only after a

16  determination by the office Insurance Commissioner and

17  Treasurer that the exchange may operate in an economic and

18  beneficial manner. A committee shall be appointed to write the

19  constitution and bylaws of the proposed exchange, to make such

20  other recommendations as may be necessary to assure maximum

21  coordination of the operations of the exchange with existing

22  insurance industry operations, and to assure maximum economic

23  benefits to the state from the operations of the exchange. The

24  committee shall consist of 13 members, 6 to be appointed by

25  the Chief Financial Officer Insurance Commissioner and

26  Treasurer, 2 each to be appointed by the Speaker of the House

27  of Representatives and the President of the Senate, 1 each to

28  be appointed by the minority leader of the House of

29  Representatives and the minority leader of the Senate, and 1

30  to be the Chief Financial Officer Insurance Commissioner and

31  Treasurer or his or her designated representative. The chair

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 1  shall be elected by a majority of the committee. The committee

 2  shall transmit such proposed constitution and bylaws and such

 3  other recommendations to the office Insurance Commissioner and

 4  Treasurer and to the Legislature no later than 5 days prior to

 5  the adjournment of a regular annual legislative session or no

 6  later than 5 days prior to the commencement of any special or

 7  organizational legislative session. Subject to the disapproval

 8  of the constitution and bylaws by either house of the

 9  Legislature by resolution before the end of such legislative

10  session, the exchange shall have full authority to function

11  pursuant to its constitution and bylaws 60 days after the end

12  of the session. The initial board of governors of the exchange

13  shall consist of 14 members, 3 appointed by the Chief

14  Financial Officer Insurance Commissioner and Treasurer, 3 by

15  the Speaker of the House of Representatives, 3 by the

16  President of the Senate, 1 by the minority leader of the House

17  of Representatives, 1 by the minority leader of the Senate,

18  and 3 by the Governor, to serve until the first election

19  pursuant to the constitution or bylaws.

20         (3)  The constitution and bylaws of the exchange shall

21  provide for, but shall not be limited to:

22         (a)  The selection of 13 governors, at least 7 of whom

23  shall be appointed by and serve at the pleasure of the Chief

24  Financial Officer Insurance Commissioner. Five of the

25  governors appointed by the Chief Financial Officer Insurance

26  Commissioner shall not be members of the exchange. One of the

27  remaining two governors appointed by the Chief Financial

28  Officer Insurance Commissioner shall be a broker member, and

29  one shall be a representative of an underwriting member. The

30  remainder of the governors shall be elected by the membership

31  of the exchange in accordance with the constitution and

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 1  bylaws, except that at least five governors shall be elected

 2  by the underwriting members of the exchange.

 3         (b)  The location of the principal offices of the

 4  exchange and the principal offices of its members to be within

 5  this state for the purpose of the transaction of the type of

 6  business described in subsection (1). A principal office shall

 7  be one where officers and qualified personnel who are engaged

 8  in the administration, underwriting, claims, policyholders'

 9  service, marketing, accounting, recordkeeping, and all

10  supportive services shall be located.

11         (c)  The submission by members and all applicants for

12  membership on the exchange of such financial information as

13  may be required by the office commissioner.

14         (d)1.  The establishment by the exchange of a security

15  fund in such form and amount as approved by the office

16  commissioner.

17         2.  With respect to contracts of insurance written or

18  renewed on or after July 2, 1987:

19         a.  The security fund shall pay that amount of each

20  covered claim which is determined to be payable in accordance

21  with the constitution and bylaws and is in excess of $100 and

22  less than $300,000, except that the fund shall not be

23  obligated to a policyholder or claimant in an amount in excess

24  of the obligation of the insolvent underwriting member under

25  the policy from which the claim arises.

26         b.  The security fund shall have no obligation and

27  shall make no payment of any obligation arising under any such

28  contract or with respect to any contract of reinsurance

29  written or renewed on or after July 2, 1987, to the extent the

30  payment or payments exceed, either individually or in the

31  aggregate, 10 percent of the insolvent underwriting member's

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 1  surplus as to policyholders as reflected on the most recent

 2  sworn annual statement of the insolvent underwriting member

 3  filed with the office department prior to issuance of such

 4  contract.

 5         c.  For the purposes of this subparagraph, each

 6  reinsurance treaty and each contract of insurance inuring to

 7  the benefit of multiple parties shall constitute only one

 8  contract, and covered claims include unpaid claims, including

 9  claims of unearned premiums, which arise out of and are within

10  the coverage and are not in excess of the applicable limits of

11  an insurance policy issued by an insolvent underwriting member

12  through the facilities of the exchange.

13         (e)  The voting power of members who are underwriting

14  syndicates.

15         (f)  The voting power and other rights granted under

16  the provisions of the not-for-profit corporation law, chapter

17  617, to participate in the conduct and management of the

18  affairs of the exchange, by brokers, agents, and

19  intermediaries transacting business on the exchange, each of

20  whom shall be considered "members" only under the provisions

21  of such law.

22         (g)  The rights and duties of exchange members, which

23  may include, but shall not be limited to, the manner and form

24  of conducting business, financial stability, dues, membership

25  fees, mandatory arbitration, and all other matters necessary

26  or appropriate to conduct any business permitted herein.

27  

28  Any amendments to the constitution and bylaws shall be subject

29  to the approval of the office commissioner.

30         (4)  Any insurance exchange formed under the provisions

31  of this section shall not be subject to any state or local

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 1  taxes or fees measured by income, premiums, or gross receipts;

 2  except that for purposes of taxation under s. 624.509, direct

 3  premiums written, procured, or received by a member or members

 4  through the exchange on risks located in this state shall be

 5  construed to be written, procured, or received by the

 6  exchange, and the premium tax due on said premium shall be

 7  reported and paid by the exchange.

 8         (5)  The exchange shall reimburse the office department

 9  for any expenses incurred by the office department relating to

10  the regulation of the exchange and its members.

11         (6)(a)1.  The provisions of ss. 625.012 and 625.031

12  shall be applicable to the underwriting members of an exchange

13  in the same manner as those sections apply to domestic

14  insurers authorized to do business in this state.

15         2.  The provisions of ss. 625.302-625.338 shall be

16  applicable to the underwriting members of an exchange in the

17  same manner as those sections apply to domestic insurers

18  authorized to transact business in this state.

19         (b)  In addition to the insurance laws specified in

20  paragraph (a), the office department shall regulate the

21  exchange pursuant to the following powers, rights, and duties:

22         1.  General examination powers.--The office department

23  shall examine the affairs, transactions, accounts, records,

24  and assets of any security fund, exchange, members, and

25  associate brokers as often as it deems advisable. The

26  examination may be conducted by the accredited examiners of

27  the office department at the offices of the entity or person

28  being examined. The office department shall examine in like

29  manner each prospective member or associate broker applying

30  for membership in an exchange.

31  

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 1         2.  Office Departmental approval and applications of

 2  underwriting members.--No underwriting member shall commence

 3  operation without the approval of the office department.

 4  Before commencing operation, an underwriting member shall

 5  provide a written application containing:

 6         a.  Name, type, and purpose of the underwriting member.

 7         b.  Name, residence address, business background, and

 8  qualifications of each person associated or to be associated

 9  in the formation or financing of the underwriting member.

10         c.  Full disclosure of the terms of all understandings

11  and agreements existing or proposed among persons so

12  associated relative to the underwriting member, or the

13  formation or financing thereof, accompanied by a copy of each

14  such agreement or understanding.

15         d.  Full disclosure of the terms of all understandings

16  and agreements existing or proposed for management or

17  exclusive agency contracts.

18         3.  Investigation of underwriting member

19  applications.--In connection with any proposal to establish an

20  underwriting member, the office department shall make an

21  investigation of:

22         a.  The character, reputation, financial standing, and

23  motives of the organizers, incorporators, or subscribers

24  organizing the proposed underwriting member.

25         b.  The character, financial responsibility, insurance

26  experience, and business qualifications of its proposed

27  officers.

28         c.  The character, financial responsibility, business

29  experience, and standing of the proposed stockholders and

30  directors, or owners.

31  

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 1         4.  Notice of management changes.--An underwriting

 2  member shall promptly give the office department written

 3  notice of any change among the directors or principal officers

 4  of the underwriting member within 30 days after such change.

 5  The office department shall investigate the new directors or

 6  principal officers of the underwriting member. The office's

 7  department's investigation shall include an investigation of

 8  the character, financial responsibility, insurance experience,

 9  and business qualifications of any new directors or principal

10  officers. As a result of the investigation, the office

11  department may require the underwriting member to replace any

12  new directors or principal officers.

13         5.  Alternate financial statement.--In lieu of any

14  financial examination, the office department may accept an

15  audited financial statement.

16         6.  Correction and reconstruction of records.--If the

17  office department finds any accounts or records to be

18  inadequate, or inadequately kept or posted, it may employ

19  experts to reconstruct, rewrite, post, or balance them at the

20  expense of the person or entity being examined if such person

21  or entity has failed to maintain, complete, or correct such

22  records or accounts after the office department has given him

23  or her or it notice and reasonable opportunity to do so.

24         7.  Obstruction of examinations.--Any person or entity

25  who or which willfully obstructs the office department or its

26  examiner in an examination is guilty of a misdemeanor of the

27  second degree, punishable as provided in s. 775.082 or s.

28  775.083.

29         8.  Filing of annual statement.--Each underwriting

30  member shall file with the office department a full and true

31  statement of its financial condition, transactions, and

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 1  affairs. The statement shall be filed on or before March 1 of

 2  each year, or within such extension of time as the office

 3  department for good cause grants, and shall be for the

 4  preceding calendar year. The statement shall contain

 5  information generally included in insurer financial statements

 6  prepared in accordance with generally accepted insurance

 7  accounting principles and practices and in a form generally

 8  utilized by insurers for financial statements, sworn to by at

 9  least two executive officers of the underwriting member. The

10  form of the financial statements shall be the approved form of

11  the National Association of Insurance Commissioners or its

12  successor organization. The commission department may by rule

13  require each insurer to submit any part of the information

14  contained in the financial statement in a computer-readable

15  form compatible with the office's department's electronic data

16  processing system. In addition to information furnished in

17  connection with its annual statement, an underwriting member

18  must furnish to the office department as soon as reasonably

19  possible such information about its transactions or affairs as

20  the office department requests in writing.  All information

21  furnished pursuant to the office's department's request must

22  be verified by the oath of two executive officers of the

23  underwriting member.

24         9.  Record maintenance.--Each underwriting member shall

25  have and maintain its principal place of business in this

26  state and shall keep therein complete records of its assets,

27  transactions, and affairs in accordance with such methods and

28  systems as are customary for or suitable to the kind or kinds

29  of insurance transacted.

30         10.  Examination of agents.--If the department has

31  reason to believe that any agent, as defined in s. 626.015 or

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 1  s. 626.914, has violated or is violating any provision of the

 2  insurance law, or upon receipt of a written complaint signed

 3  by any interested person indicating that any such violation

 4  may exist, the department shall conduct such examination as it

 5  deems necessary of the accounts, records, documents, and

 6  transactions pertaining to or affecting the insurance affairs

 7  of such agent.

 8         11.  Written reports of office department.--The office

 9  department or its examiner shall make a full and true written

10  report of any examination. The report shall contain only

11  information obtained from examination of the records,

12  accounts, files, and documents of or relative to the person or

13  entity examined or from testimony of individuals under oath,

14  together with relevant conclusions and recommendations of the

15  examiner based thereon. The office department shall furnish a

16  copy of the report to the person or entity examined not less

17  than 30 days prior to filing the report in its office. If such

18  person or entity so requests in writing within such 30-day

19  period, the office department shall grant a hearing with

20  respect to the report and shall not file the report until

21  after the hearing and after such modifications have been made

22  therein as the office department deems proper.

23         12.  Admissibility of reports.--The report of an

24  examination when filed shall be admissible in evidence in any

25  action or proceeding brought by the office department against

26  the person or entity examined, or against his or her or its

27  officers, employees, or agents. The office department or its

28  examiners may at any time testify and offer other proper

29  evidence as to information secured or matters discovered

30  during the course of an examination, whether or not a written

31  

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 1  report of the examination has been either made, furnished, or

 2  filed in the office department.

 3         13.  Publication of reports.--After an examination

 4  report has been filed, the office department may publish the

 5  results of any such examination in one or more newspapers

 6  published in this state whenever it deems it to be in the

 7  public interest.

 8         14.  Consideration of examination reports by entity

 9  examined.--After the examination report of an underwriting

10  member has been filed, an affidavit shall be filed with the

11  office department, not more than 30 days after the report has

12  been filed, on a form furnished by the office department and

13  signed by the person or a representative of any entity

14  examined, stating that the report has been read and that the

15  recommendations made in the report will be considered within a

16  reasonable time.

17         15.  Examination costs.--Each person or entity examined

18  by the office department shall pay to the office department

19  the expenses incurred in such examination.

20         16.  Exchange costs.--An exchange shall reimburse the

21  office department for any expenses incurred by it relating to

22  the regulation of the exchange and its members, except as

23  specified in subparagraph 15.

24         17.  Powers of examiners.--Any examiner appointed by

25  the office department, as to the subject of any examination,

26  investigation, or hearing being conducted by him or her, may

27  administer oaths, examine and cross-examine witnesses, and

28  receive oral and documentary evidence, and shall have the

29  power to subpoena witnesses, compel their attendance and

30  testimony, and require by subpoena the production of books,

31  papers, records, files, correspondence, documents, or other

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 1  evidence which the examiner deems relevant to the inquiry. If

 2  any person refuses to comply with any such subpoena or to

 3  testify as to any matter concerning which he or she may be

 4  lawfully interrogated, the Circuit Court of Leon County or the

 5  circuit court of the county wherein such examination,

 6  investigation, or hearing is being conducted, or of the county

 7  wherein such person resides, on the office's department's

 8  application may issue an order requiring such person to comply

 9  with the subpoena and to testify; and any failure to obey such

10  an order of the court may be punished by the court as a

11  contempt thereof. Subpoenas shall be served, and proof of such

12  service made, in the same manner as if issued by a circuit

13  court.  Witness fees and mileage, if claimed, shall be allowed

14  the same as for testimony in a circuit court.

15         18.  False testimony.--Any person willfully testifying

16  falsely under oath as to any matter material to any

17  examination, investigation, or hearing shall upon conviction

18  thereof be guilty of perjury and shall be punished

19  accordingly.

20         19.  Self-incrimination.--

21         a.  If any person asks to be excused from attending or

22  testifying or from producing any books, papers, records,

23  contracts, documents, or other evidence in connection with any

24  examination, hearing, or investigation being conducted by the

25  office department or its examiner, on the ground that the

26  testimony or evidence required of the person may tend to

27  incriminate him or her or subject him or her to a penalty or

28  forfeiture, and the person notwithstanding is directed to give

29  such testimony or produce such evidence, he or she shall, if

30  so directed by the office department and the Department of

31  Legal Affairs, nonetheless comply with such direction; but the

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 1  person shall not thereafter be prosecuted or subjected to any

 2  penalty or forfeiture for or on account of any transaction,

 3  matter, or thing concerning which he or she may have so

 4  testified or produced evidence, and no testimony so given or

 5  evidence so produced shall be received against him or her upon

 6  any criminal action, investigation, or proceeding; except that

 7  no such person so testifying shall be exempt from prosecution

 8  or punishment for any perjury committed by him or her in such

 9  testimony, and the testimony or evidence so given or produced

10  shall be admissible against him or her upon any criminal

11  action, investigation, or proceeding concerning such perjury,

12  nor shall he or she be exempt from the refusal, suspension, or

13  revocation of any license, permission, or authority conferred,

14  or to be conferred, pursuant to the insurance law.

15         b.  Any such individual may execute, acknowledge, and

16  file with in the office of the department a statement

17  expressly waiving such immunity or privilege in respect to any

18  transaction, matter, or thing specified in such statement, and

19  thereupon the testimony of such individual or such evidence in

20  relation to such transaction, matter, or thing may be received

21  or produced before any judge or justice, court, tribunal,

22  grand jury, or otherwise; and if such testimony or evidence is

23  so received or produced, such individual shall not be entitled

24  to any immunity or privileges on account of any testimony so

25  given or evidence so produced.

26         20.  Penalty for failure to testify.--Any person who

27  refuses or fails, without lawful cause, to testify relative to

28  the affairs of any member, associate broker, or other person

29  when subpoenaed and requested by the office department to so

30  testify, as provided in subparagraph 17., shall, in addition

31  to the penalty provided in subparagraph 17., be guilty of a

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 1  misdemeanor of the second degree, punishable as provided in s.

 2  775.082 or s. 775.083.

 3         21.  Name selection.--No underwriting member shall be

 4  formed or authorized to transact insurance in this state under

 5  a name which is the same as that of any authorized insurer or

 6  is so nearly similar thereto as to cause or tend to cause

 7  confusion or under a name which would tend to mislead as to

 8  the type of organization of the insurer. Before incorporating

 9  under or using any name, the underwriting syndicate or

10  proposed underwriting syndicate shall submit its name or

11  proposed name to the office department for the approval of the

12  office department.

13         22.  Capitalization.--An underwriting member approved

14  on or after July 2, 1987, shall provide an initial paid-in

15  capital and surplus of $3 million and thereafter shall

16  maintain a minimum policyholder surplus of $2 million in order

17  to be permitted to write insurance.  Underwriting members

18  approved prior to July 2, 1987, shall maintain a minimum

19  policyholder surplus of $1 million. After June 29, 1988,

20  underwriting members approved prior to July 2, 1987, must

21  maintain a minimum policyholder surplus of $1.5 million to

22  write insurance.  After June 29, 1989, underwriting members

23  approved prior to July 2, 1987, must maintain a minimum

24  policyholder surplus of $1.75 million to write insurance.

25  After December 30, 1989, all underwriting members, regardless

26  of the date they were approved, must maintain a minimum

27  policyholder surplus of $2 million to write insurance.  Except

28  for that portion of the paid-in capital and surplus which

29  shall be maintained in a security fund of an exchange, the

30  paid-in capital and surplus shall be invested by an

31  underwriting member in a manner consistent with ss.

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 1  625.301-625.340.  The portion of the paid-in capital and

 2  surplus in any security fund of an exchange shall be invested

 3  in a manner limited to investments for life insurance

 4  companies under the Florida insurance laws.

 5         23.  Limitations on coverage written.--

 6         a.  Limit of risk.--No underwriting member shall expose

 7  itself to any loss on any one risk in an amount exceeding 10

 8  percent of its surplus to policyholders.  Any risk or portion

 9  of any risk which shall have been reinsured in an assuming

10  reinsurer authorized or approved to do such business in this

11  state shall be deducted in determining the limitation of risk

12  prescribed in this section.

13         b.  Restrictions on premiums written.--If the office

14  department has reason to believe that the underwriting

15  member's ratio of actual or projected annual gross written

16  premiums to policyholder surplus exceeds 8 to 1 or the

17  underwriting member's ratio of actual or projected annual net

18  premiums to policyholder surplus exceeds 4 to 1, the office

19  department may establish maximum gross or net annual premiums

20  to be written by the underwriting member consistent with

21  maintaining the ratios specified in this sub-subparagraph.

22         (I)  Projected annual net or gross premiums shall be

23  based on the actual writings to date for the underwriting

24  member's current calendar year, its writings for the previous

25  calendar year, or both.  Ratios shall be computed on an

26  annualized basis.

27         (II)  For purposes of this sub-subparagraph, the term

28  "gross written premiums" means direct premiums written and

29  reinsurance assumed.

30         c.  Surplus as to policyholders.--For the purpose of

31  determining the limitation on coverage written, surplus as to

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 1  policyholders shall be deemed to include any voluntary

 2  reserves, or any part thereof, which are not required by or

 3  pursuant to law and shall be determined from the last sworn

 4  statement of such underwriting member with the office

 5  department, or by the last report or examination filed by the

 6  office department, whichever is more recent at the time of

 7  assumption of such risk.

 8         24.  Unearned premium reserves.--All unearned premium

 9  reserves for business written on the exchange shall be

10  calculated on a monthly or more frequent basis or on such

11  other basis as determined by the office department; except

12  that all premiums on any marine or transportation insurance

13  trip risk shall be deemed unearned until the trip is

14  terminated.

15         25.  Loss reserves.--All underwriting members of an

16  exchange shall maintain loss reserves, including a reserve for

17  incurred but not reported claims. The reserves shall be

18  subject to review by the office department, and, if loss

19  experience shows that an underwriting member's loss reserves

20  are inadequate, the office department shall require the

21  underwriting member to maintain loss reserves in such

22  additional amount as is needed to make them adequate.

23         26.  Distribution of profits.--An underwriting member

24  shall not distribute any profits in the form of cash or other

25  assets to owners except out of that part of its available and

26  accumulated surplus funds which is derived from realized net

27  operating profits on its business and realized capital gains.

28  In any one year such payments to owners shall not exceed 30

29  percent of such surplus as of December 31 of the immediately

30  preceding year, unless otherwise approved by the office

31  department. No distribution of profits shall be made that

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 1  would render an underwriting member either impaired or

 2  insolvent.

 3         27.  Stock dividends.--A stock dividend may be paid by

 4  an underwriting member out of any available surplus funds in

 5  excess of the aggregate amount of surplus advanced to the

 6  underwriting member under subparagraph 29.

 7         28.  Dividends from earned surplus.--A dividend

 8  otherwise lawful may be payable out of an underwriting

 9  member's earned surplus even though the total surplus of the

10  underwriting member is then less than the aggregate of its

11  past contributed surplus resulting from issuance of its

12  capital stock at a price in excess of the par value thereof.

13         29.  Borrowing of money by underwriting members.--

14         a.  An underwriting member may borrow money to defray

15  the expenses of its organization, provide it with surplus

16  funds, or for any purpose of its business, upon a written

17  agreement that such money is required to be repaid only out of

18  the underwriting member's surplus in excess of that stipulated

19  in such agreement. The agreement may provide for interest not

20  exceeding 15 percent simple interest per annum.  The interest

21  shall or shall not constitute a liability of the underwriting

22  member as to its funds other than such excess of surplus, as

23  stipulated in the agreement. No commission or promotion

24  expense shall be paid in connection with any such loan.  The

25  use of any surplus note and any repayments thereof shall be

26  subject to the approval of the office department.

27         b.  Money so borrowed, together with any interest

28  thereon if so stipulated in the agreement, shall not form a

29  part of the underwriting member's legal liabilities except as

30  to its surplus in excess of the amount thereof stipulated in

31  the agreement, nor be the basis of any setoff; but until

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 1  repayment, financial statements filed or published by an

 2  underwriting member shall show as a footnote thereto the

 3  amount thereof then unpaid, together with any interest thereon

 4  accrued but unpaid.

 5         30.  Liquidation, rehabilitation, and

 6  restrictions.--The office department, upon a showing that a

 7  member or associate broker of an exchange has met one or more

 8  of the grounds contained in part I of chapter 631, may

 9  restrict sales by type of risk, policy or contract limits,

10  premium levels, or policy or contract provisions; increase

11  surplus or capital requirements of underwriting members; issue

12  cease and desist orders; suspend or restrict a member's or

13  associate broker's right to transact business; place an

14  underwriting member under conservatorship or rehabilitation;

15  or seek an order of liquidation as authorized by part I of

16  chapter 631.

17         31.  Prohibited conduct.--The following acts by a

18  member, associate broker, or affiliated person shall

19  constitute prohibited conduct:

20         a.  Fraud.

21         b.  Fraudulent or dishonest acts committed by a member

22  or associate broker prior to admission to an exchange, if the

23  facts and circumstances were not disclosed to the office

24  department upon application to become a member or associate

25  broker.

26         c.  Conduct detrimental to the welfare of an exchange.

27         d.  Unethical or improper practices or conduct,

28  inconsistent with just and equitable principles of trade as

29  set forth in, but not limited to, ss. 626.951-626.9641 and

30  626.973.

31  

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 1         e.  Failure to use due diligence to ascertain the

 2  insurance needs of a client or a principal.

 3         f.  Misstatements made under oath or upon an

 4  application for membership on an exchange.

 5         g.  Failure to testify or produce documents when

 6  requested by the office department.

 7         h.  Willful violation of any law of this state.

 8         i.  Failure of an officer or principal to testify under

 9  oath concerning a member, associate broker, or other person's

10  affairs as they relate to the operation of an exchange.

11         j.  Violation of the constitution and bylaws of the

12  exchange.

13         32.  Penalties for participating in prohibited

14  conduct.--

15         a.  The office department may order the suspension of

16  further transaction of business on the exchange of any member

17  or associate broker found to have engaged in prohibited

18  conduct. In addition, any member or associate broker found to

19  have engaged in prohibited conduct may be subject to

20  reprimand, censure, and/or a fine not exceeding $25,000

21  imposed by the office department.

22         b.  Any member which has an affiliated person who is

23  found to have engaged in prohibited conduct shall be subject

24  to involuntary withdrawal or in addition thereto may be

25  subject to suspension, reprimand, censure, and/or a fine not

26  exceeding $25,000.

27         33.  Reduction of penalties.--Any suspension,

28  reprimand, censure, or fine may be remitted or reduced by the

29  office department on such terms and conditions as are deemed

30  fair and equitable.

31  

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 1         34.  Other offenses.--Any member or associate broker

 2  that is suspended shall be deprived, during the period of

 3  suspension, of all rights and privileges of a member or of an

 4  associate broker and may be proceeded against by the office

 5  department for any offense committed either before or after

 6  the date of suspension.

 7         35.  Reinstatement.--Any member or associate broker

 8  that is suspended may be reinstated at any time on such terms

 9  and conditions as the office department may specify.

10         36.  Remittance of fines.--Fines imposed under this

11  section shall be remitted to the office department and shall

12  be paid into the Insurance Commissioner's Regulatory Trust

13  Fund.

14         37.  Failure to pay fines.--When a member or associate

15  broker has failed to pay a fine for 15 days after it becomes

16  payable, such member or associate broker shall be suspended,

17  unless the office department has granted an extension of time

18  to pay such fine.

19         38.  Changes in ownership or assets.--In the event of a

20  major change in the ownership or a major change in the assets

21  of an underwriting member, the underwriting member shall

22  report such change in writing to the office department within

23  30 days of the effective date thereof. The report shall set

24  forth the details of the change. Any change in ownership or

25  assets of more than 5 percent shall be considered a major

26  change.

27         39.  Retaliation.--

28         a.  When by or pursuant to the laws of any other state

29  or foreign country any taxes, licenses, or other fees, in the

30  aggregate, and any fines, penalties, deposit requirements, or

31  other material obligations, prohibitions, or restrictions are

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 1  or would be imposed upon an exchange or upon the agents or

 2  representatives of such exchange which are in excess of such

 3  taxes, licenses, and other fees, in the aggregate, or which

 4  are in excess of such fines, penalties, deposit requirements,

 5  or other obligations, prohibitions, or restrictions directly

 6  imposed upon similar exchanges or upon the agents or

 7  representatives of such exchanges of such other state or

 8  country under the statutes of this state, so long as such laws

 9  of such other state or country continue in force or are so

10  applied, the same taxes, licenses, and other fees, in the

11  aggregate, or fines, penalties, deposit requirements, or other

12  material obligations, prohibitions, or restrictions of

13  whatever kind shall be imposed by the office department upon

14  the exchanges, or upon the agents or representatives of such

15  exchanges, of such other state or country doing business or

16  seeking to do business in this state.

17         b.  Any tax, license, or other obligation imposed by

18  any city, county, or other political subdivision or agency of

19  a state, jurisdiction, or foreign country on an exchange, or

20  on the agents or representatives on an exchange, shall be

21  deemed to be imposed by such state, jurisdiction, or foreign

22  country within the meaning of sub-subparagraph a.

23         40.  Agents.--

24         a.  Agents as defined in ss. 626.015 and 626.914 who

25  are broker members or associate broker members of an exchange

26  shall be allowed only to place on an exchange the same kind or

27  kinds of business that the agent is licensed to place pursuant

28  to Florida law.  Direct Florida business as defined in s.

29  626.916 or s. 626.917 shall be written through a broker member

30  who is a surplus lines agent as defined in s. 626.914.  The

31  activities of each broker member or associate broker with

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 1  regard to an exchange shall be subject to all applicable

 2  provisions of the insurance laws of this state, and all such

 3  activities shall constitute transactions under his or her

 4  license as an insurance agent for purposes of the Florida

 5  insurance law.

 6         b.  Premium payments and other requirements.--If an

 7  underwriting member has assumed the risk as to a surplus lines

 8  coverage and if the premium therefor has been received by the

 9  surplus lines agent who placed such insurance, then in all

10  questions thereafter arising under the coverage as between the

11  underwriting member and the insured, the underwriting member

12  shall be deemed to have received the premium due to it for

13  such coverage; and the underwriting member shall be liable to

14  the insured as to losses covered by such insurance, and for

15  unearned premiums which may become payable to the insured upon

16  cancellation of such insurance, whether or not in fact the

17  surplus lines agent is indebted to the underwriting member

18  with respect to such insurance or for any other cause.

19         41.  Improperly issued contracts, riders, and

20  endorsements.--

21         a.  Any insurance policy, rider, or endorsement issued

22  by an underwriting member and otherwise valid which contains

23  any condition or provision not in compliance with the

24  requirements of this section shall not be thereby rendered

25  invalid, except as provided in s. 627.415, but shall be

26  construed and applied in accordance with such conditions and

27  provisions as would have applied had such policy, rider, or

28  endorsement been in full compliance with this section.  In the

29  event an underwriting member issues or delivers any policy for

30  an amount which exceeds any limitations otherwise provided in

31  this section, the underwriting member shall be liable to the

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 1  insured or his or her beneficiary for the full amount stated

 2  in the policy in addition to any other penalties that may be

 3  imposed.

 4         b.  Any insurance contract delivered or issued for

 5  delivery in this state governing a subject or subjects of

 6  insurance resident, located, or to be performed in this state

 7  which, pursuant to the provisions of this section, the

 8  underwriting member may not lawfully insure under such a

 9  contract shall be cancelable at any time by the underwriting

10  member, any provision of the contract to the contrary

11  notwithstanding; and the underwriting member shall promptly

12  cancel the contract in accordance with the request of the

13  office department therefor.  No such illegality or

14  cancellation shall be deemed to relieve the underwriting

15  syndicate of any liability incurred by it under the contract

16  while in force or to prohibit the underwriting syndicate from

17  retaining the pro rata earned premium thereon.  This provision

18  does not relieve the underwriting syndicate from any penalty

19  otherwise incurred by the underwriting syndicate.

20         42.  Satisfaction of judgments.--

21         a.  Every judgment or decree for the recovery of money

22  heretofore or hereafter entered in any court of competent

23  jurisdiction against any underwriting member shall be fully

24  satisfied within 60 days from and after the entry thereof or,

25  in the case of an appeal from such judgment or decree, within

26  60 days from and after the affirmance of the judgment or

27  decree by the appellate court.

28         b.  If the judgment or decree is not satisfied as

29  required under sub-subparagraph a., and proof of such failure

30  to satisfy is made by filing with the office department a

31  certified transcript of the docket of the judgment or the

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 1  decree together with a certificate by the clerk of the court

 2  wherein the judgment or decree remains unsatisfied, in whole

 3  or in part, after the time provided in sub-subparagraph a.,

 4  the office department shall forthwith prohibit the

 5  underwriting member from transacting business. The office

 6  department shall not permit such underwriting member to write

 7  any new business until the judgment or decree is wholly paid

 8  and satisfied and proof thereof is filed with the office

 9  department under the official certificate of the clerk of the

10  court wherein the judgment was recovered, showing that the

11  judgment or decree is satisfied of record, and until the

12  expenses and fees incurred in the case are also paid by the

13  underwriting syndicate.

14         43.  Tender and exchange offers.--No person shall

15  conclude a tender offer or an exchange offer or otherwise

16  acquire 5 percent or more of the outstanding voting securities

17  of an underwriting member or controlling company or purchase 5

18  percent or more of the ownership of an underwriting member or

19  controlling company unless such person has filed with, and

20  obtained the approval of, the office department and sent to

21  such underwriting member a statement setting forth:

22         a.  The identity of, and background information on,

23  each person by whom, or on whose behalf, the acquisition is to

24  be made; and, if the acquisition is to be made by or on behalf

25  of a corporation, association, or trust, the identity of and

26  background information on each director, officer, trustee, or

27  other natural person performing duties similar to those of a

28  director, officer, or trustee for the corporation,

29  association, or trust.

30         b.  The source and amount of the funds or other

31  consideration used, or to be used, in making the acquisition.

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 1         c.  Any plans or proposals which such person may have

 2  to liquidate such member, to sell its assets, or to merge or

 3  consolidate it.

 4         d.  The percentage of ownership which such person

 5  proposes to acquire and the terms of the offer or exchange, as

 6  the case may be.

 7         e.  Information as to any contracts, arrangements, or

 8  understandings with any party with respect to any securities

 9  of such member or controlling company, including, but not

10  limited to, information relating to the transfer of any

11  securities, option arrangements, or puts or calls or the

12  giving or withholding of proxies, naming the party with whom

13  such contract, arrangements, or understandings have been

14  entered and giving the details thereof.

15         f.  The office department may disapprove any

16  acquisition subject to the provisions of this subparagraph by

17  any person or any affiliated person of such person who:

18         (I)  Willfully violates this subparagraph;

19         (II)  In violation of an order of the office department

20  issued pursuant to sub-subparagraph j., fails to divest

21  himself or herself of any stock obtained in violation of this

22  subparagraph, or fails to divest himself or herself of any

23  direct or indirect control of such stock, within 25 days after

24  such order; or

25         (III)  In violation of an order issued by the office

26  department pursuant to sub-subparagraph j., acquires

27  additional stock of the underwriting member or controlling

28  company, or direct or indirect control of such stock, without

29  complying with this subparagraph.

30         g.  The person or persons filing the statement required

31  by this subparagraph have the burden of proof. The office

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 1  department shall approve any such acquisition if it finds, on

 2  the basis of the record made during any proceeding or on the

 3  basis of the filed statement if no proceeding is conducted,

 4  that:

 5         (I)  Upon completion of the acquisition, the

 6  underwriting member will be able to satisfy the requirements

 7  for the approval to write the line or lines of insurance for

 8  which it is presently approved;

 9         (II)  The financial condition of the acquiring person

10  or persons will not jeopardize the financial stability of the

11  underwriting member or prejudice the interests of its

12  policyholders or the public;

13         (III)  Any plan or proposal which the acquiring person

14  has, or acquiring persons have, made:

15         (A)  To liquidate the insurer, sell its assets, or

16  merge or consolidate it with any person, or to make any other

17  major change in its business or corporate structure or

18  management; or

19         (B)  To liquidate any controlling company, sell its

20  assets, or merge or consolidate it with any person, or to make

21  any major change in its business or corporate structure or

22  management which would have an effect upon the underwriting

23  member

24  

25  is fair and free of prejudice to the policyholders of the

26  underwriting member or to the public;

27         (IV)  The competence, experience, and integrity of

28  those persons who will control directly or indirectly the

29  operation of the underwriting member indicate that the

30  acquisition is in the best interest of the policyholders of

31  the underwriting member and in the public interest;

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 1         (V)  The natural persons for whom background

 2  information is required to be furnished pursuant to this

 3  subparagraph have such backgrounds as to indicate that it is

 4  in the best interests of the policyholders of the underwriting

 5  member, and in the public interest, to permit such persons to

 6  exercise control over such underwriting member;

 7         (VI)  The officers and directors to be employed after

 8  the acquisition have sufficient insurance experience and

 9  ability to assure reasonable promise of successful operation;

10         (VII)  The management of the underwriting member after

11  the acquisition will be competent and trustworthy and will

12  possess sufficient managerial experience so as to make the

13  proposed operation of the underwriting member not hazardous to

14  the insurance-buying public;

15         (VIII)  The management of the underwriting member after

16  the acquisition will not include any person who has directly

17  or indirectly through ownership, control, reinsurance

18  transactions, or other insurance or business relations

19  unlawfully manipulated the assets, accounts, finances, or

20  books of any insurer or underwriting member or otherwise acted

21  in bad faith with respect thereto;

22         (IX)  The acquisition is not likely to be hazardous or

23  prejudicial to the underwriting member's policyholders or the

24  public; and

25         (X)  The effect of the acquisition of control would not

26  substantially lessen competition in insurance in this state or

27  would not tend to create a monopoly therein.

28         h.  No vote by the stockholder of record, or by any

29  other person, of any security acquired in contravention of the

30  provisions of this subparagraph is valid.  Any acquisition of

31  any security contrary to the provisions of this subparagraph

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 1  is void. Upon the petition of the underwriting member or

 2  controlling company, the circuit court for the county in which

 3  the principal office of such underwriting member is located

 4  may, without limiting the generality of its authority, order

 5  the issuance or entry of an injunction or other order to

 6  enforce the provisions of this subparagraph.  There shall be a

 7  private right of action in favor of the underwriting member or

 8  controlling company to enforce the provisions of this

 9  subparagraph. No demand upon the office department that it

10  perform its functions shall be required as a prerequisite to

11  any suit by the underwriting member or controlling company

12  against any other person, and in no case shall the office

13  department be deemed a necessary party to any action by such

14  underwriting member or controlling company to enforce the

15  provisions of this subparagraph.  Any person who makes or

16  proposes an acquisition requiring the filing of a statement

17  pursuant to this subparagraph, or who files such a statement,

18  shall be deemed to have thereby designated the Chief Financial

19  Officer Insurance Commissioner, or his or her assistant or

20  deputy or another person in charge of his or her office, as

21  such person's agent for service of process under this

22  subparagraph and shall thereby be deemed to have submitted

23  himself or herself to the administrative jurisdiction of the

24  office department and to the jurisdiction of the circuit

25  court.

26         i.  Any approval by the office department under this

27  subparagraph does not constitute a recommendation by the

28  office department for an acquisition, tender offer, or

29  exchange offer. It is unlawful for a person to represent that

30  the office's department's approval constitutes a

31  recommendation.  A person who violates the provisions of this

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 1  sub-subparagraph is guilty of a felony of the third degree,

 2  punishable as provided in s. 775.082, s. 775.083, or s.

 3  775.084.  The statute-of-limitations period for the

 4  prosecution of an offense committed under this

 5  sub-subparagraph is 5 years.

 6         j.  Upon notification to the office department by the

 7  underwriting member or a controlling company that any person

 8  or any affiliated person of such person has acquired 5 percent

 9  or more of the outstanding voting securities of the

10  underwriting member or controlling company without complying

11  with the provisions of this subparagraph, the office

12  department shall order that the person and any affiliated

13  person of such person cease acquisition of any further

14  securities of the underwriting member or controlling company;

15  however, the person or any affiliated person of such person

16  may request a proceeding, which proceeding shall be convened

17  within 7 days after the rendering of the order for the sole

18  purpose of determining whether the person, individually or in

19  connection with any affiliated person of such person, has

20  acquired 5 percent or more of the outstanding voting

21  securities of an underwriting member or controlling company.

22  Upon the failure of the person or affiliated person to request

23  a hearing within 7 days, or upon a determination at a hearing

24  convened pursuant to this sub-subparagraph that the person or

25  affiliated person has acquired voting securities of an

26  underwriting member or controlling company in violation of

27  this subparagraph, the office department may order the person

28  and affiliated person to divest themselves of any voting

29  securities so acquired.

30         k.(I)  The office department shall, if necessary to

31  protect the public interest, suspend or revoke the certificate

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 1  of authority of any underwriting member or controlling

 2  company:

 3         (A)  The control of which is acquired in violation of

 4  this subparagraph;

 5         (B)  That is controlled, directly or indirectly, by any

 6  person or any affiliated person of such person who, in

 7  violation of this subparagraph, has obtained control of an

 8  underwriting member or controlling company; or

 9         (C)  That is controlled, directly or indirectly, by any

10  person who, directly or indirectly, controls any other person

11  who, in violation of this subparagraph, acquires control of an

12  underwriting member or controlling company.

13         (II)  If any underwriting member is subject to

14  suspension or revocation pursuant to sub-sub-subparagraph (I),

15  the underwriting member shall be deemed to be in such

16  condition, or to be using or to have been subject to such

17  methods or practices in the conduct of its business, as to

18  render its further transaction of insurance presently or

19  prospectively hazardous to its policyholders, creditors, or

20  stockholders or to the public.

21         l.(I)  For the purpose of this sub-sub-subparagraph,

22  the term "affiliated person" of another person means:

23         (A)  The spouse of such other person;

24         (B)  The parents of such other person and their lineal

25  descendants and the parents of such other person's spouse and

26  their lineal descendants;

27         (C)  Any person who directly or indirectly owns or

28  controls, or holds with power to vote, 5 percent or more of

29  the outstanding voting securities of such other person;

30  

31  

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 1         (D)  Any person 5 percent or more of the outstanding

 2  voting securities of which are directly or indirectly owned or

 3  controlled, or held with power to vote, by such other person;

 4         (E)  Any person or group of persons who directly or

 5  indirectly control, are controlled by, or are under common

 6  control with such other person; or any officer, director,

 7  partner, copartner, or employee of such other person;

 8         (F)  If such other person is an investment company, any

 9  investment adviser of such company or any member of an

10  advisory board of such company;

11         (G)  If such other person is an unincorporated

12  investment company not having a board of directors, the

13  depositor of such company; or

14         (H)  Any person who has entered into an agreement,

15  written or unwritten, to act in concert with such other person

16  in acquiring or limiting the disposition of securities of an

17  underwriting member or controlling company.

18         (II)  For the purposes of this section, the term

19  "controlling company" means any corporation, trust, or

20  association owning, directly or indirectly, 25 percent or more

21  of the voting securities of one or more underwriting members.

22         m.  The commission may department is authorized to

23  adopt, amend, or repeal rules that are necessary to implement

24  the provisions of this subparagraph, pursuant to chapter 120.

25         44.  Background information.--The information as to the

26  background and identity of each person about whom information

27  is required to be furnished pursuant to sub-subparagraph 43.a.

28  shall include, but shall not be limited to:

29         a.  Such person's occupations, positions of employment,

30  and offices held during the past 10 years.

31  

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 1         b.  The principal business and address of any business,

 2  corporation, or other organization in which each such office

 3  was held or in which such occupation or position of employment

 4  was carried on.

 5         c.  Whether, at any time during such 10-year period,

 6  such person was convicted of any crime other than a traffic

 7  violation.

 8         d.  Whether, during such 10-year period, such person

 9  has been the subject of any proceeding for the revocation of

10  any license and, if so, the nature of such proceeding and the

11  disposition thereof.

12         e.  Whether, during such 10-year period, such person

13  has been the subject of any proceeding under the federal

14  Bankruptcy Act or whether, during such 10-year period, any

15  corporation, partnership, firm, trust, or association in which

16  such person was a director, officer, trustee, partner, or

17  other official has been subject to any such proceeding, either

18  during the time in which such person was a director, officer,

19  trustee, partner, or other official, or within 12 months

20  thereafter.

21         f.  Whether, during such 10-year period, such person

22  has been enjoined, either temporarily or permanently, by a

23  court of competent jurisdiction from violating any federal or

24  state law regulating the business of insurance, securities, or

25  banking, or from carrying out any particular practice or

26  practices in the course of the business of insurance,

27  securities, or banking, together with details of any such

28  event.

29         45.  Security fund.--All underwriting members shall be

30  members of the security fund of any exchange.

31  

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 1         46.  Underwriting member defined.--Whenever the term

 2  "underwriting member" is used in this subsection, it shall be

 3  construed to mean "underwriting syndicate."

 4         47.  Offsets.--Any action, requirement, or constraint

 5  imposed by the office department shall reduce or offset

 6  similar actions, requirements, or constraints of any exchange.

 7         48.  Restriction on member ownership.--

 8         a.  Investments existing prior to July 2, 1987.--The

 9  investment in any member by brokers, agents, and

10  intermediaries transacting business on the exchange, and the

11  investment in any such broker, agent, or intermediary by any

12  member, directly or indirectly, shall in each case be limited

13  in the aggregate to less than 20 percent of the total

14  investment in such member, broker, agent, or intermediary, as

15  the case may be. After December 31, 1987, the aggregate

16  percent of the total investment in such member by any broker,

17  agent, or intermediary and the aggregate percent of the total

18  investment in any such broker, agent, or intermediary by any

19  member, directly or indirectly, shall not exceed 15 percent.

20  After June 30, 1988, such aggregate percent shall not exceed

21  10 percent and after December 31, 1988, such aggregate percent

22  shall not exceed 5 percent.

23         b.  Investments arising on or after July 2, 1987.--The

24  investment in any underwriting member by brokers, agents, or

25  intermediaries transacting business on the exchange, and the

26  investment in any such broker, agent, or intermediary by any

27  underwriting member, directly or indirectly, shall in each

28  case be limited in the aggregate to less than 5 percent of the

29  total investment in such underwriting member, broker, agent,

30  or intermediary.

31  

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 1         49.  "Underwriting manager" defined.--"Underwriting

 2  manager" as used in this subparagraph includes any person,

 3  partnership, corporation, or organization providing any of the

 4  following services to underwriting members of the exchange:

 5         a.  Office management and allied services, including

 6  correspondence and secretarial services.

 7         b.  Accounting services, including bookkeeping and

 8  financial report preparation.

 9         c.  Investment and banking consultations and services.

10         d.  Underwriting functions and services including the

11  acceptance, rejection, placement, and marketing of risk.

12         50.  Prohibition of underwriting manager

13  investment.--Any direct or indirect investment in any

14  underwriting manager by a broker member or any affiliated

15  person of a broker member or any direct or indirect investment

16  in a broker member by an underwriting manager or any

17  affiliated person of an underwriting manager is prohibited.

18  "Affiliated person" for purposes of this subparagraph is

19  defined in subparagraph 43.

20         51.  An underwriting member may not accept reinsurance

21  on an assumed basis from an affiliate or a controlling

22  company, nor may a broker member or management company place

23  reinsurance from an affiliate or controlling company of theirs

24  with an underwriting member.  "Affiliate and controlling

25  company" for purposes of this subparagraph is defined in

26  subparagraph 43.

27         52.  Premium defined.--"Premium" is the consideration

28  for insurance, by whatever name called.  Any "assessment" or

29  any "membership," "policy," "survey," "inspection," "service"

30  fee or charge or similar fee or charge in consideration for an

31  insurance contract is deemed part of the premium.

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 1         53.  Rules.--The commission department shall adopt

 2  promulgate rules necessary for or as an aid to the

 3  effectuation of any provision of this section.

 4         (7)  The performance of the contractual obligations of

 5  the exchange or its members entered into pursuant to

 6  subsection (1) shall not be covered by any of the Florida

 7  state security or guaranty funds.

 8         Section 1331.  Section 629.520, Florida Statutes, is

 9  amended to read:

10         629.520  Authority of a limited reciprocal

11  insurer.--The authority of any limited reciprocal insurer to

12  accept new business or renewals shall not continue beyond

13  October 1, 1992; however, such limited reciprocal insurer

14  shall continue to service its obligations previously incurred

15  or with the approval of the office department, arrange for the

16  transfer of these obligations to an authorized insurer. All

17  power of the office department with respect to limited

18  reciprocal insurers shall continue undiminished. This section

19  does not affect any other power of the office department or

20  any other function of the office department.

21         Section 1332.  Subsection (1) of section 630.021,

22  Florida Statutes, is amended to read:

23         630.021  Required deposit of assets.--

24         (1)  An alien insurer may use Florida as a state of

25  entry to transact insurance in the United States by making and

26  maintaining in this state a deposit of assets in trust with a

27  solvent bank or trust company or savings and loan association

28  approved by the office department.

29         Section 1333.  Section 630.031, Florida Statutes, is

30  amended to read:

31  

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 1         630.031  Existing trusts.--All trusts of trusteed

 2  assets heretofore created and now existing shall be continued

 3  under the instruments creating them, unless inconsistent with

 4  the provisions of this chapter.  No amendment of the deed of

 5  trust under which such assets are so held shall be effective

 6  unless approved by the office department in accordance with

 7  the provisions of this chapter.

 8         Section 1334.  Section 630.051, Florida Statutes, is

 9  amended to read:

10         630.051  Trust agreement; approval; amendment.--

11         (1)  The deposit referred to in s. 630.021 shall be

12  made under a written trust agreement between the insurer and

13  the trustee, consistent with the provisions of this chapter;

14  and the agreement and any amendments thereto shall be

15  authenticated in such form and manner as the office department

16  may designate or approve.

17         (2)  The agreement shall not be effective until filed

18  with and approved in writing by the office department. If the

19  office department finds that the trust agreement is sufficient

20  in form and in conformity with law, that the trustee or

21  trustees are eligible as such, and that the trust agreement is

22  adequate to protect the interests of the beneficiaries of the

23  trust, it shall give its written approval thereof. If the

24  office department finds that any of the above-mentioned

25  requisites do not exist, it shall refuse to approve the trust

26  agreement.

27         (3)  If after a trust agreement has become effective

28  the office department finds that the requisites for approval

29  of the agreement no longer exist, it may withdraw its

30  approval.

31  

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 1         (4)  A trust agreement may be amended, but no amendment

 2  shall be effective unless the agreement as so amended is found

 3  by the office department to be consistent with the provisions

 4  of this chapter and the amendment is approved by it.

 5         Section 1335.  Subsection (2) of section 630.071,

 6  Florida Statutes, is amended to read:

 7         630.071  Requirements and contents of trust

 8  agreement.--Trusteed assets of an alien insurer held in this

 9  state under this chapter shall be subject to, and the trust

10  agreement shall make provisions consistent with, the following

11  conditions:

12         (2)  Substitution of a new trustee or trustees in case

13  of a vacancy by death, resignation or otherwise may be made,

14  subject to the office's department's approval.

15         Section 1336.  Section 630.081, Florida Statutes, is

16  amended to read:

17         630.081  Withdrawal of assets, in general.--

18         (1)  The trust agreement shall provide, in substance,

19  that no withdrawals of trusteed assets shall be made by the

20  insurer or permitted by the trustee or trustees without the

21  written authorization or approval of the office department in

22  advance thereof, except as follows:

23         (a)  Any or all income, earnings, dividends, or

24  interest accumulations of the trusteed assets may be paid over

25  to the United States manager of the insurer upon request of

26  the insurer or the manager.

27         (b)  For substitution, coincidentally with such

28  withdrawal, of other securities or assets of value at least

29  equal in amount to those being withdrawn, if such substituted

30  securities or assets are likewise such as are eligible for

31  investment of the funds of domestic insurers under part II of

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 1  chapter 625; and if such withdrawal is requested in writing by

 2  the insurer's United States manager pursuant to general or

 3  specific written authority previously given or delegated by

 4  the insurer's board of directors or other similar governing

 5  body, and a copy of such authority has been filed with the

 6  trustee or trustees.

 7         (c)  For the purpose of making deposits required by law

 8  in any state in which the insurer is or thereafter becomes an

 9  authorized insurer, for the protection of the insurer's

10  policyholders or policyholders and creditors in such state or

11  in the United States, if such withdrawal does not reduce the

12  insurer's deposit in this state to an amount less than the

13  minimum deposit required under s. 624.412. The trustee or

14  trustees shall transfer any assets so withdrawn, and in the

15  amount so required to be deposited in the other state,

16  directly to the depository required to receive such deposit in

17  such other state, as certified in writing by the public

18  official having supervision of insurance in the other state.

19         (d)  For the purpose of transferring the trusteed

20  assets to an official liquidator, conservator, or

21  rehabilitator pursuant to the order of a court of competent

22  jurisdiction.

23         (2)  The office department shall so authorize or

24  approve withdrawal of only such assets as are in excess of the

25  amount of assets required to be so held in trust under s.

26  630.021, or as may otherwise be consistent with the provisions

27  of this chapter.

28         (3)  If at any time the insurer becomes insolvent, or

29  if its assets held in the United States are less in amount

30  than as required under s. 624.412(1), upon determination

31  thereof the office department shall in writing order the

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 1  trustee to suspend the right of the insurer or any other

 2  person to withdraw assets as otherwise authorized under

 3  paragraphs (1)(a), (b), and (c); and the trustee shall comply

 4  with such order until the further order of the office

 5  department.

 6         (4)  In the case of withdrawal of trusteed assets

 7  deposited in another state in which the insurer is authorized

 8  to do business, it shall be sufficient if the trust agreement

 9  requires similar written approval of the insurance supervisory

10  official of such state in lieu of any required approval of the

11  office department. In all such cases, the insurer shall notify

12  the office department in writing of the nature and extent of

13  such withdrawal.

14         Section 1337.  Section 630.091, Florida Statutes, is

15  amended to read:

16         630.091  Statement of trustee.--

17         (1)  The trustee or trustees of trusteed assets shall

18  from time to time file with the office department statements,

19  in such form as it may designate and request in writing,

20  certifying the character of such assets and the amounts

21  thereof.

22         (2)  If the trustee or trustees fail to file any such

23  statement after request therefor and expiration of a

24  reasonable time thereafter, the office department may suspend

25  or revoke the certificate of authority of the insurer.

26         Section 1338.  Section 630.101, Florida Statutes, is

27  amended to read:

28         630.101  Examination of assets.--The office department

29  may from time to time examine trusteed assets of any insurer

30  in accordance with the same conditions and procedures

31  

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 1  governing the examination of insurers in general under part II

 2  of chapter 624.

 3         Section 1339.  Section 630.131, Florida Statutes, is

 4  amended to read:

 5         630.131  Domestication procedure.--

 6         (1)  Upon compliance with ss. 630.131-630.161, any

 7  alien insurer authorized to do business in this state which

 8  owns beneficially, directly or indirectly, all of the

 9  outstanding capital stock of a domestic insurer may, with the

10  prior written approval of the office department and subject to

11  the final approval of the office department, domesticate its

12  United States branch, if entered through this state, by

13  entering into an agreement in writing with the domestic

14  insurer providing for the acquisition by the domestic insurer

15  of all the liabilities of the United States branch for no

16  consideration other than the assumption of such liabilities;

17  except that the agreement may further provide for additional

18  consideration payable by the issuance by the acquiring

19  domestic insurer of shares of its capital stock.

20         (2)  Such shares of capital stock of the acquiring

21  domestic insurer, or voting trust certificates representing

22  such shares, as are held among the trusteed assets of the

23  United States branch of the alien insurer or are held in a

24  trust created by the alien insurer and of which the alien

25  insurer is a beneficiary shall be deemed to be shares held

26  beneficially, but indirectly, by an alien insurer.

27         (3)  The acquisition of assets and assumption of

28  liabilities of the United States branch by the domestic

29  insurer shall be effected by the filing with the office

30  department of an instrument of transfer and assumption in form

31  

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 1  satisfactory to the office department and executed by the

 2  alien insurer and the domestic insurer.

 3         (4)  A domestic insurer may either be authorized to

 4  transact insurance in this state prior to entering into such

 5  domestication agreement or may, if the office department so

 6  approves, be authorized effective with the consummation of the

 7  domestication agreement in accordance with the provisions of

 8  s. 630.161.

 9         Section 1340.  Section 630.151, Florida Statutes, is

10  amended to read:

11         630.151  Office Departmental approval of domestication

12  agreement.--An executed counterpart of the domestication

13  agreement, together with certified copies of the corporate

14  proceedings of the domestic insurer and the alien insurer,

15  approving, adopting, and authorizing the execution of the

16  domestication agreement, shall be submitted to the office

17  department for its approval. The office department shall

18  thereupon consider the agreement; and, if it finds that the

19  same is in accordance with the provisions hereof and that the

20  interests of policyholders and creditors of the United States

21  branch of the alien insurer are not materially adversely

22  affected, it may approve the domestication agreement and

23  authorize the consummation thereof in compliance with the

24  provisions of s. 630.161.

25         Section 1341.  Section 630.161, Florida Statutes, is

26  amended to read:

27         630.161  Consummation of domestication; transfer of

28  assets and deposits.--

29         (1)  Upon the filing with the office department of a

30  certified copy of the instrument of transfer and assumption

31  pursuant to which a domestic insurer succeeds to the business

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 1  and assets of the United States branch of an alien insurer and

 2  assumes all its liabilities as provided by ss.

 3  630.131-630.161, the domestication of the United States branch

 4  shall be deemed to be effective; and thereupon all the rights,

 5  franchises, and interests of the United States branch in and

 6  to every species of property, real, personal, and mixed, and

 7  things in action thereunto belonging shall be deemed as

 8  transferred to and vested in the domestic insurer, and

 9  simultaneously therewith the domestic insurer shall be deemed

10  to have assumed all of the liabilities of the United States

11  branch.

12         (2)  All deposits of the United States branch held by

13  the department, or state officers or other state regulatory

14  agencies pursuant to requirements of state laws, shall be

15  deemed to be held as security that the domestic insurer will

16  fully perform its assumption as direct liabilities of all the

17  liabilities to policyholders or policyholders and creditors

18  within the United States of the United States branch; and such

19  deposits shall be deemed to be assets of the domestic insurer

20  and shall be reported as such in the annual financial

21  statements and other reports which the domestic insurer may be

22  required to file. Upon the ultimate release by any such state

23  officer or agency of any such deposits, the securities and

24  cash constituting such released deposit shall be delivered and

25  paid over to the domestic insurer as the lawful successor in

26  interest to the United States branch.

27         (3)  Contemporaneously with the consummation of the

28  domestication of the United States branch, notwithstanding any

29  provision of the statutes to the contrary, the department

30  shall transfer to the insurer the securities deposited by the

31  United States branch in compliance with the provisions of this

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 1  law, and the department shall consent that the trustee of the

 2  trusteed assets deposited by the United States branch in

 3  compliance with the provisions of this law shall withdraw from

 4  the trusteed assets and transfer and deliver over to the

 5  domestic insurer all assets held by such trustee.

 6         Section 1342.  Subsection (3) of section 631.021,

 7  Florida Statutes, is amended to

 8         631.021  Jurisdiction of delinquency proceeding; venue;

 9  change of venue; exclusiveness of remedy; appeal.--

10         (3)  A delinquency proceeding pursuant to this chapter

11  constitutes the sole and exclusive method of liquidating,

12  rehabilitating, reorganizing, or conserving an insurer. No

13  court shall entertain a petition for the commencement of such

14  a proceeding unless the petition has been filed in the name of

15  the state on the relation of the office department. The

16  Florida Insurance Guaranty Association, Incorporated, the

17  Florida Workers' Compensation Insurance Guaranty Association,

18  Incorporated, and the Florida Life and Health Guaranty

19  Association, Incorporated, shall be given reasonable written

20  notice by the office department of all hearings which pertain

21  to an adjudication of insolvency of a member insurer.

22         Section 1343.  Section 631.025, Florida Statutes, is

23  amended to read:

24         631.025  Persons subject to this part.--Delinquency

25  proceedings authorized by this part may be initiated against

26  any insurer, as defined in s. 631.011(15), if the statutory

27  grounds are present as to that insurer, and the court may

28  exercise jurisdiction over any person required to cooperate

29  with the department and office pursuant to s. 631.391 and over

30  all persons made subject to the court's jurisdiction by other

31  

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 1  provisions of law. Such persons include, but are not limited

 2  to:

 3         (1)  A person transacting, or that has transacted,

 4  insurance business in or from this state and against whom

 5  claims arising from that business may exist now or in the

 6  future.

 7         (2)  A person purporting to transact an insurance

 8  business in this state and any person who acts as an insurer,

 9  transacts insurance, or otherwise engages in insurance

10  activities in or from this state, with or without a

11  certificate of authority or proper authority from the office

12  department, against whom claims arising from that business may

13  exist now or in the future.

14         (3)  An insurer with policyholders resident in this

15  state.

16         (4)  All other persons organized or in the process of

17  organizing with the intent to transact an insurance business

18  in this state.

19         Section 1344.  Section 631.031, Florida Statutes, is

20  amended to read:

21         631.031  Commencement of delinquency proceeding.--The

22  office department may commence any such proceeding by

23  application to the court for an order directing the insurer to

24  show cause why the office department should not have the

25  relief prayed for. On the return of such order to show cause,

26  and after a full hearing, the court shall either deny the

27  application or grant the application, together with such other

28  relief as the nature of the case and the interests of the

29  policyholders, creditors, stockholders, members, subscribers,

30  or public may require. The office department may also commence

31  any such proceeding by application to the court by petition

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 1  for the entry of a consent order of conservation,

 2  rehabilitation, or liquidation.

 3         Section 1345.  Subsections (2), (3), (4), and (5) of

 4  section 631.041, Florida Statutes, are amended to read:

 5         631.041  Automatic stay; relief from stay;

 6  injunctions.--

 7         (2)  Upon written request of a person or entity subject

 8  to the stay against obtaining or enforcing a judgment against

 9  an insurer or affiliate provided in paragraph (1)(b) the

10  court, with notice to the office and department and upon

11  hearing, may grant relief from the stay provided the movant,

12  who has the burden of proof, establishes by clear and

13  convincing evidence that the judgment is not voidable or void

14  by a receiver and that property from which the judgment would

15  be satisfied does not constitute premium funds or another

16  asset which belongs to the insurer.

17         (3)  Upon application by the office or department

18  pursuant to this part for an order to show cause or upon

19  petition, or at any time thereafter, the court may without

20  notice issue an injunction restraining the insurer and its

21  officers, directors, stockholders, members, subscribers, and

22  agents and all other persons from the transaction of its

23  business or the waste or disposition of its property until the

24  further order of the court.

25         (4)  The court may without notice at any time during a

26  proceeding under this chapter issue such other injunctions or

27  orders as may be deemed necessary to prevent interference with

28  the office or department or the proceeding; waste of the

29  assets of the insurer; the commencement or prosecution of any

30  actions; the obtaining of preferences, judgments, attachments,

31  

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 1  or other liens; or the making of any levy against the insurer

 2  or against its assets or any part thereof.

 3         (5)  Notwithstanding any other provision of law, no

 4  bond shall be required of the office or department as a

 5  prerequisite for the issuance of any injunction or restraining

 6  order pursuant to this section.

 7         Section 1346.  Subsections (1) and (4) of section

 8  631.042, Florida Statutes, are amended to read:

 9         631.042  Extension of time.--

10         (1)  With respect to any action by or against an

11  insurer, no statute of limitations or defense of laches shall

12  run between the date the office department files a petition

13  for a delinquency proceeding against an insurer and the date

14  the court enters an order granting or denying that petition.

15  If the petition is denied, any action against the insurer that

16  might have been commenced when the petition was filed may be

17  commenced no later than 60 days after the order denying such

18  relief or the remaining unexpired time under the applicable

19  statute of limitations or defense of laches that was available

20  on the day the petition was filed, whichever is longer.

21         (4)  For actions not covered by subsection (2), if any

22  unexpired time period is fixed by any agreement or in any

23  proceeding for doing any act for the benefit of the estate,

24  the receiver shall have 180 days, or for good cause shown more

25  than 180 days as allowed by the court, from the date the court

26  enters the order granting the office's department's petition

27  for a delinquency proceeding.

28         Section 1347.  Section 631.051, Florida Statutes, is

29  amended to read:

30         631.051  Grounds for rehabilitation; domestic

31  insurers.--The office department may petition for an order

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 1  directing it to rehabilitate a domestic insurer or an alien

 2  insurer domiciled in this state on any one or more of the

 3  following grounds, that the insurer:

 4         (1)  Is impaired or insolvent;

 5         (2)  Has failed to comply with an order of the office

 6  department to make good an impairment of capital or surplus or

 7  both;

 8         (3)  Is found by the office department to be in such

 9  condition or is using or has been subject to such methods or

10  practices in the conduct of its business, as to render its

11  further transaction of insurance presently or prospectively

12  hazardous to its policyholders, creditors, stockholders, or

13  the public;

14         (4)  Has failed, or its parent corporation, subsidiary,

15  or affiliated person controlled by either the insurer or the

16  parent corporation has failed, to submit its books, documents,

17  accounts, records, and affairs pertaining to the insurer to

18  the reasonable inspection or examination of the office

19  department or its authorized representative; or any individual

20  exercising any executive authority in the affairs of the

21  insurer, or parent corporation, or subsidiary, or affiliated

22  person has refused to be examined under oath by the office

23  department or its authorized representative, whether within

24  this state or otherwise, concerning the pertinent affairs of

25  the insurer, or parent corporation or subsidiary or affiliated

26  person; or if examined under oath refuses to divulge pertinent

27  information reasonably known to her or him; or officers,

28  directors, agents, employees, or other representatives of the

29  insurer or parent corporation, subsidiary, or affiliated

30  person have failed to comply promptly with the reasonable

31  requests of the office department or its authorized

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 1  representative for the purposes of, and during the conduct of,

 2  any such examination;

 3         (5)  Has concealed or removed records or assets or

 4  otherwise violated s. 628.271 or s. 628.281;

 5         (6)  Through its board of directors or governing body

 6  is deadlocked in the management of the insurer's affairs and

 7  that the members of a mutual, reciprocal, or any other type of

 8  organization or stockholders are unable to break the deadlock

 9  and that irreparable injury to the insurer, its creditors, its

10  policyholders, its members or subscribers, or the public is

11  threatened by reason thereof;

12         (7)  Has transferred or attempted to transfer

13  substantially its entire property or business, or has entered

14  into any transaction the effect of which is to merge

15  substantially its entire property or business into that of any

16  other insurer or entity without having first obtained the

17  written approval of the office department under the provisions

18  of s. 628.451, s. 628.461, or s. 628.4615, as the case may be;

19         (8)  Has willfully violated its charter or certificate

20  of incorporation or any law of this state;

21         (9)  Is in such a position that control of it, whether

22  by stock ownership or otherwise, and whether direct or

23  indirect, is in one or more persons found by the office

24  department after notice and hearing to be dishonest or

25  untrustworthy; or that the insurer has failed, upon order of

26  the office department and expiration of such reasonable time

27  for such removal as the office department shall specify in the

28  order, to remove any person who in fact has executive

29  authority, directly or indirectly, in the insurer, whether as

30  an officer, director, manager, agent, employee, or otherwise,

31  and if such person has been found by the office department

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 1  after notice and hearing, to be incompetent, dishonest,

 2  untrustworthy, or so lacking in insurance company managerial

 3  experience as to be hazardous to the insurance-buying public;

 4         (10)  Has been or is the subject of an application for

 5  the appointment of a receiver, trustee, custodian, or

 6  sequestrator of the insurer or its property otherwise than

 7  pursuant to the provisions of this code, but only if such an

 8  appointment has been made or is imminent;

 9         (11)  Has consented to such an order through a majority

10  of its directors, stockholders, members, or subscribers;

11         (12)  Has failed to pay a final judgment rendered

12  against it in this state upon any insurance contract issued or

13  assumed by it, within 60 days after the judgment became final,

14  within 60 days after the time for taking an appeal has

15  expired, or within 30 days after dismissal of an appeal before

16  final determination, whichever date is the later;

17         (13)  Has been the victim of embezzlement, wrongful

18  sequestration, conversion, diversion, or encumbering of its

19  assets; forgery or fraud affecting it; or other illegal

20  conduct in, by, or with respect to it, which if established

21  would threaten its solvency; or that the office department has

22  reasonable cause to so believe any of the foregoing has

23  occurred or may occur;

24         (14)  Is engaging in a systematic practice of reaching

25  settlements with and obtaining releases from policyholders or

26  third-party claimants and then unreasonably delaying payment

27  of, or failing to pay, the agreed-upon settlements; or

28         (15)  Within the previous 12 months has systematically

29  attempted to compromise with creditors on the ground that it

30  is financially unable to pay its claims in full.

31  

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 1         Section 1348.  Section 631.0515, Florida Statutes, is

 2  amended to read:

 3         631.0515  Appointment of receiver; insurance holding

 4  company.--A delinquency proceeding pursuant to this chapter

 5  constitutes the sole and exclusive method of dissolving,

 6  liquidating, rehabilitating, reorganizing, conserving, or

 7  appointing a receiver of a Florida corporation which is not

 8  insolvent as defined by s. 607.01401(16); which through its

 9  shareholders, board of directors, or governing body is

10  deadlocked in the management of its affairs; and which

11  directly or indirectly owns all of the stock of a Florida

12  domestic insurer. The office department may petition for an

13  order directing the department it to rehabilitate such

14  corporation if the interests of policyholders or the public

15  will be harmed as a result of the deadlock. The department

16  shall use due diligence to resolve the deadlock. Whether or

17  not the office department petitions for an order, the circuit

18  court shall not have jurisdiction pursuant to s. 607.271, s.

19  607.274, or s. 607.277 to dissolve, liquidate, or appoint

20  receivers with respect to, a Florida corporation which

21  directly or indirectly owns all of the stock of a Florida

22  domestic insurer and which is not insolvent as defined by s.

23  607.01401(16).

24         Section 1349.  Section 631.061, Florida Statutes, is

25  amended to read:

26         631.061  Grounds for liquidation.--The office

27  department may apply to the court for an order appointing the

28  department it as receiver (if its appointment as receiver is

29  not then in effect) and directing the department it to

30  liquidate the business of a domestic insurer or of the United

31  States branch of an alien insurer having trusteed assets in

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 1  this state, regardless of whether or not there has been a

 2  prior order directing it to rehabilitate such insurer, upon

 3  any of the grounds specified in s. 631.051, or if such

 4  insurer:

 5         (1)  Is or is about to become insolvent.

 6         (2)  Is an insolvent insurer and has commenced or is

 7  attempting to commence voluntary liquidation or dissolution

 8  except under this code.

 9         (3)  Has not completed its organization and obtained a

10  certificate of authority as an insurer within the time allowed

11  therefor under any applicable law.

12         Section 1350.  Section 631.071, Florida Statutes, is

13  amended to read:

14         631.071  Grounds for conservation; foreign

15  insurers.--The office department may apply to the court for an

16  order appointing the department it as receiver or ancillary

17  receiver, and directing it to conserve the assets within this

18  state, of a foreign insurer upon any of the following grounds:

19         (1)  Upon any of the grounds specified in s. 631.051 or

20  s. 631.061, or

21         (2)  Upon the ground that its property has been

22  sequestrated in its domiciliary sovereignty or in any other

23  sovereignty.

24         Section 1351.  Section 631.081, Florida Statutes, is

25  amended to read:

26         631.081  Grounds for conservation; alien insurers.--The

27  office department may apply to the court for an order

28  appointing the department it as receiver or ancillary

29  receiver, and directing it to conserve the assets within this

30  state, of any alien insurer upon any of the following grounds:

31  

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 1         (1)  Upon any of the grounds specified in s. 631.051 or

 2  s. 631.061;

 3         (2)  Upon the ground that the insurer has failed to

 4  comply, within the time designated by the office department,

 5  with an order made by it to make good an impairment of its

 6  trusteed funds; or

 7         (3)  Upon the ground that the property of the insurer

 8  has been sequestrated in its domiciliary sovereignty or

 9  elsewhere.

10         Section 1352.  Section 631.091, Florida Statutes, is

11  amended to read:

12         631.091  Grounds for ancillary liquidation; foreign

13  insurers.--The office department may apply to the circuit

14  court for an order appointing the department it as ancillary

15  receiver of, and directing it to liquidate the business and

16  assets of, a foreign insurer which has assets, business, or

17  claims in this state upon the appointment in the domiciliary

18  state of such insurer of a receiver, liquidator, conservator,

19  rehabilitator, or other officer by whatever name called for

20  the purpose of liquidating the business of such insurer.

21         Section 1353.  Subsection (3) of section 631.111,

22  Florida Statutes, is amended to read:

23         631.111  Order of liquidation; domestic insurers.--

24         (3)  The department or office may apply for and secure

25  an order dissolving the corporate existence of a domestic

26  insurer upon the its application for an order of liquidation

27  of such insurer or at any time after such order has been

28  granted.

29         Section 1354.  Subsection (1) of section 631.152,

30  Florida Statutes, is amended to read:

31  

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 1         631.152  Conduct of delinquency proceeding; foreign

 2  insurers.--

 3         (1)  Whenever under this chapter an ancillary receiver

 4  is to be appointed in a delinquency proceeding for an insurer

 5  not domiciled in this state, the court shall appoint the

 6  department as ancillary receiver. The office department shall

 7  file a petition requesting the appointment on the grounds set

 8  forth in s. 631.091:

 9         (a)  If it finds that there are sufficient assets of

10  the insurer located in this state to justify the appointment

11  of an ancillary receiver, or

12         (b)  If 10 or more persons resident in this state

13  having claims against such insurer file a petition with the

14  office department requesting the appointment of such ancillary

15  receiver.

16         Section 1355.  Paragraph (d) of subsection (6) of

17  section 631.154, Florida Statutes, is amended to read:

18         631.154  Funds, assets, or other property in the

19  possession of third person.--

20         (6)  Should the receiver be successful in establishing

21  its claim or any part thereof, the receiver shall be entitled

22  to recover judgment for the following:

23         (d)  All costs, investigative and other expenses,

24  including, but not limited to, those for department and office

25  staff, incurred in the recovery of the property, assets, or

26  funds, and reasonable attorney's fees. Department and office

27  staff costs and expenses include staff salaries.

28  

29  It is the intent of this section that a person found to be

30  holding receivership assets fully reimburse the receiver for

31  any and all efforts made to recover those assets.

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 1         Section 1356.  Section 631.221, Florida Statutes, is

 2  amended to read:

 3         631.221  Deposit of moneys collected.--The moneys

 4  collected by the department in a proceeding under this chapter

 5  shall be deposited in a qualified public depository as defined

 6  in s. 280.02, which depository with regards to such funds

 7  shall conform to and be bound by all the provisions of chapter

 8  280, or invested with the Chief Financial Officer State

 9  Treasurer pursuant to chapter 18. For the purpose of

10  accounting for the assets and transactions of the estate, the

11  receiver shall use such accounting books, records, and systems

12  as the court directs after it hears and considers the

13  recommendations of the receiver.

14         Section 1357.  Section 631.231, Florida Statutes, is

15  amended to read:

16         631.231  Exemption from fees.--The department or office

17  shall not be required to pay any fee to any public officer in

18  this state for filing, recording, issuing a transcript or

19  certificate, or authenticating any paper or instrument

20  pertaining to the exercise by the department or office of any

21  of the powers or duties conferred upon it under this chapter,

22  whether or not such paper or instrument be executed by the

23  department or office or their its employees or attorneys of

24  record and whether or not it is connected with the

25  commencement of any action or proceeding by or against the

26  department or office, or with the subsequent conduct of such

27  action or proceeding.

28         Section 1358.  Section 631.361, Florida Statutes, is

29  amended to read:

30         631.361  Seizure under court order.--

31  

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 1         (1)  Upon filing by the office department in the

 2  circuit court in and for Leon County of its verified petition

 3  alleging any ground for a formal delinquency proceeding

 4  against an insurer under this chapter, alleging that the

 5  interests of the insurer's policyholders, claimants, or

 6  creditors or the public will be endangered or jeopardized by

 7  delay, and setting forth the order deemed necessary by the

 8  office department, the court may, ex parte and without notice

 9  or hearing, issue forthwith the requested order. The requested

10  order may:

11         (a)  Direct the department to take possession and

12  control of all or part of the property, books, documents,

13  accounts, and other records of the insurer and the premises

14  occupied by it for transaction of its business and premium

15  funds and other property of the insurer held by an affiliate;

16  and

17         (b)  Until further order of court, enjoin the insurer

18  and any affiliate and their officers, directors, managers,

19  agents, and employees from removal, concealment, or other

20  disposition of the insurer's property, books, records, or

21  accounts and from transaction of the insurer's business except

22  with the department's written consent.

23         (2)  The court's order shall be for such duration

24  specified in the order as the court deems necessary to enable

25  the office and department to ascertain the insurer's

26  condition. Upon motion of any party or affected person, or

27  upon its own motion, the court may hold such hearings as it

28  deems desirable, after such notice as it deems appropriate,

29  and may extend, shorten, or modify the terms of the order. The

30  court shall vacate the seizure order if the office department

31  fails to commence a formal proceeding under this chapter after

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 1  having had a reasonable opportunity to do so, and a seizure

 2  order is automatically vacated by issuance of the court's

 3  order pursuant to a formal delinquency proceeding under this

 4  chapter.

 5         (3)  Entry of a seizure order under this section shall

 6  not constitute an anticipatory breach of any contract of the

 7  insurer.

 8         Section 1359.  Section 631.371, Florida Statutes, is

 9  amended to read:

10         631.371  Seizure under order of the office

11  department.--

12         (1)  Upon the office's department filing a verified

13  petition with any circuit judge of the proper judicial circuit

14  as required by s. 631.021(2), which states that it believes

15  that the interest of policyholders, the insurer, claimants,

16  creditors, or the public will be endangered or jeopardized and

17  that prima facie grounds exist for rehabilitation,

18  liquidation, or conservation of an insurer under s. 631.051,

19  s. 631.061, or s. 631.131, the office department may request a

20  seizure order and shall be entitled to an ex parte hearing

21  forthwith and an appropriate seizure order from the judge or

22  court in the interest of protecting the public and such

23  insurer and its policyholders, claimants, or creditors.  After

24  a diligent effort is made to be heard by the judges of the

25  circuit and such judges or the court fails or refuses to hear

26  such petition for any reason, the office department shall then

27  file a duplicate original of said petition and exhibits, if

28  any, in the Circuit Court of Leon County along with an

29  affidavit which shall state that a diligent effort was made to

30  obtain such initial hearing in the judicial circuit where such

31  hearing was sought and that the request to be heard was

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 1  refused or that a hearing was not granted and the reasons

 2  therefor, if known. Upon compliance with the above and if said

 3  affidavit further states that the office department believes

 4  that irreparable harm will result to the public and the

 5  insurer and its policyholders, creditors, or claimants as a

 6  result of further delay, it may thereafter issue a seizure

 7  order on any ground that would justify court seizure under s.

 8  631.361. Such seizure order may contain any or all the

 9  provisions of s. 631.361(1). The office department shall

10  retain possession and control until the order is vacated or is

11  replaced by an order of court pursuant to subsection (2) or

12  subsection (3) or pursuant to a formal delinquency proceeding

13  under this chapter.

14         (2)  The office department may, at any time after

15  seizure under its order, report its actions to the proper

16  court; and, in the event that the insurer, for any reason,

17  fails to avail itself of the judicial review provided for by

18  law, then the office department shall forthwith report its

19  actions to the proper court. The office department may request

20  the court to substitute its order for the office's

21  department's or it may seek any other order which it deems

22  appropriate.

23         (3)  Every law enforcement officer of this state

24  authorized by law shall assist the office department in making

25  and enforcing any such seizure, and every such officer shall

26  furnish it with such deputies, patrolmen, patrolwomen, or

27  officers as are necessary to assist it in execution of its

28  order.

29         (4)  Entry of a seizure order under this section shall

30  not constitute an anticipatory breach of any contract of the

31  insurer.

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 1         Section 1360.  Section 631.391, Florida Statutes, is

 2  amended to read:

 3         631.391  Cooperation of officers and employees.--

 4         (1)  Any officer, director, manager, trustee, agent,

 5  adjuster, employee, or independent contractor of any insurer

 6  or affiliate and any other person who possesses any executive

 7  authority over, or who exercises any control over, any segment

 8  of the affairs of the insurer or affiliate shall fully

 9  cooperate with the department and office in any proceeding

10  under this chapter or any investigation preliminary or

11  incidental to the proceeding. An order of rehabilitation or

12  liquidation which results in the discharge or suspension of

13  any of the persons listed above does not operate to release

14  such person from the duty to cooperate with the department and

15  office as set out herein.  To "cooperate" includes, but is not

16  limited to, the following:

17         (a)  To reply promptly in writing to any inquiry from

18  the department or office requesting such a reply;

19         (b)  Promptly to make available and deliver to the

20  department or office any books, accounts, documents, other

21  records, information, data processing software, or property of

22  or pertaining to the insurer and in her or his possession,

23  custody, or control; or

24         (c)  Promptly to provide access to all data processing

25  records in hard copy and in electronic form and to data

26  processing facilities and services.

27         (2)  No person shall obstruct or interfere with the

28  department or office in the conduct of any delinquency

29  proceeding or any investigation preliminary or incidental

30  thereto.

31  

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 1         (3)  This section does not prohibit any person from

 2  seeking legal relief from a court when aggrieved by the

 3  petition for liquidation or other delinquency proceeding or by

 4  other orders.

 5         (4)  Any person referred to in subsection (1) who fails

 6  to cooperate with the department or office, or any other

 7  person who obstructs or interferes with the department or

 8  office, in the conduct of any delinquency proceeding or any

 9  investigation preliminary or incidental thereto, is guilty of

10  a misdemeanor of the first degree, punishable as provided in

11  s. 775.082 or by fine of not more than $10,000.

12         (5)  Refusal by any person referred to in subsection

13  (1) to provide records upon the request of the department or

14  office is grounds for revocation of any insurance-related

15  license, including, but not limited to, agent and third-party

16  administrator licenses.

17         Section 1361.  Section 631.392, Florida Statutes, is

18  amended to read:

19         631.392  Immunity.--There shall be no liability on the

20  part of, and no cause of action of any nature shall arise

21  against, the Chief Financial Officer, Insurance Commissioner

22  or the department, the office, or any of their its employees

23  or agents for any action taken by them in the performance of

24  their powers and duties under this chapter.

25         Section 1362.  Section 631.398, Florida Statutes, is

26  amended to read:

27         631.398  Prevention of insolvencies.--To aid in the

28  detection and prevention of insurer insolvencies or

29  impairments:

30         (1)  Any member insurer; agent, employee, or member of

31  the board of directors; or representative of any insurance

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 1  guaranty association may make reports and recommendations to

 2  the department or office upon any matter germane to the

 3  solvency, liquidation, rehabilitation, or conservation of any

 4  member insurer or germane to the solvency of any company

 5  seeking to do an insurance business in this state.  Such

 6  reports and recommendations are confidential and exempt from

 7  the provisions of s. 119.07(1) until the termination of a

 8  delinquency proceeding.

 9         (2)  The office department shall:

10         (a)  Report to the board of directors of the

11  appropriate insurance guaranty association when it has

12  reasonable cause to believe from any examination, whether

13  completed or in process, of any member insurer that such

14  insurer may be an impaired or insolvent insurer.

15         (b)  Seek the advice and recommendations of the board

16  of directors of the appropriate insurance guaranty association

17  concerning any matter affecting the duties and

18  responsibilities of the office department in relation to the

19  financial condition of member companies and companies seeking

20  admission to transact insurance business in this state.

21         (3)  The office and department jointly shall, no later

22  than the conclusion of any domestic insurer insolvency

23  proceeding, prepare a summary report containing such

24  information as is in their its possession relating to the

25  history and causes of such insolvency, including a statement

26  of the business practices of such insurer which led to such

27  insolvency.

28         Section 1363.  Section 631.54, Florida Statutes, is

29  amended to read:

30         631.54  Definitions.--As used in this part:

31  

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 1         (1)  "Account" means any one of the three accounts

 2  created by s. 631.55.

 3         (2)  "Association" means the Florida Insurance Guaranty

 4  Association, Incorporated.

 5         (3)  "Covered claim" means an unpaid claim, including

 6  one of unearned premiums, which arises out of, and is within

 7  the coverage, and not in excess of, the applicable limits of

 8  an insurance policy to which this part applies, issued by an

 9  insurer, if such insurer becomes an insolvent insurer after

10  October 1, 1970, and the claimant or insured is a resident of

11  this state at the time of the insured event or the property

12  from which the claim arises is permanently located in this

13  state. "Covered claim" shall not include any amount due any

14  reinsurer, insurer, insurance pool, or underwriting

15  association, as subrogation, contribution, indemnification, or

16  otherwise. Member insurers shall have no right of subrogation

17  against the insured of any insolvent member. 

18         (4)  "Department" means the Department of Insurance.

19         (4)(5)  "Expenses in handling claims" means allocated

20  and unallocated expenses, including, but not limited to,

21  general administrative expenses and those expenses which

22  relate to the investigation, adjustment, defense, or

23  settlement of specific claims under, or arising out of, a

24  specific policy.

25         (5)(6)  "Insolvent insurer" means a member insurer

26  authorized to transact insurance in this state, either at the

27  time the policy was issued or when the insured event occurred,

28  and against which an order of liquidation with a finding of

29  insolvency has been entered by a court of competent

30  jurisdiction if such order has become final by the exhaustion

31  of appellate review.

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 1         (6)(7)  "Member insurer" means any person who writes

 2  any kind of insurance to which this part applies under s.

 3  631.52, including the exchange of reciprocal or interinsurance

 4  contracts, and is licensed to transact insurance in this

 5  state.

 6         (7)(8)  "Net direct written premiums" means direct

 7  gross premiums written in this state on insurance policies to

 8  which this part applies, less return premiums thereon and

 9  dividends paid or credited to policyholders on such direct

10  business. "Net direct written premiums" does not include

11  premiums on contracts between insurers or reinsurers.

12         (8)(9)  "Person" means individuals, children, firms,

13  associations, joint ventures, partnerships, estates, trusts,

14  business trusts, syndicates, fiduciaries, corporations, and

15  all other groups or combinations.

16         Section 1364.  Subsection (1) of section 631.55,

17  Florida Statutes, is amended to read:

18         631.55  Creation of the association.--

19         (1)  There is created a nonprofit corporation to be

20  known as the "Florida Insurance Guaranty Association,

21  Incorporated."  All insurers defined as member insurers in s.

22  631.54(6) s. 631.54(7) shall be members of the association as

23  a condition of their authority to transact insurance in this

24  state, and, further, as a condition of such authority, an

25  insurer shall agree to reimburse the association for all claim

26  payments the association makes on said insurer's behalf if

27  such insurer is subsequently rehabilitated.  The association

28  shall perform its functions under a plan of operation

29  established and approved under s. 631.58 and shall exercise

30  its powers through a board of directors established under s.

31  631.56.  The corporation shall have all those powers granted

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 1  or permitted nonprofit corporations, as provided in chapter

 2  applies.

 3         Section 1365.  Subsection (1) of section 631.56,

 4  Florida Statutes, is amended to read:

 5         631.56  Board of directors.--

 6         (1)  The board of directors of the association shall

 7  consist of not less than five or more than nine persons

 8  serving terms as established in the plan of operation.  The

 9  department shall approve and appoint to the board persons

10  recommended by the member insurers. In the event the

11  department finds that any recommended person does not meet the

12  qualifications for service on the board, the department shall

13  request the member insurers to recommend another person.  Each

14  member shall serve for a 4-year term and may be reappointed.

15  Vacancies on the board shall be filled for the remaining

16  period of the term in the same manner as initial appointments.

17  If no members are selected by November 30, 1970, the

18  department may appoint the initial members of the board of

19  directors.

20         Section 1366.  Subsections (1) and (3) of section

21  631.57, Florida Statutes, are amended to read:

22         631.57  Powers and duties of the association.--

23         (1)  The association shall:

24         (a)1.  Be obligated to the extent of the covered claims

25  existing:

26         a.  Prior to adjudication of insolvency and arising

27  within 30 days after the determination of insolvency;

28         b.  Before the policy expiration date if less than 30

29  days after the determination; or

30  

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 1         c.  Before the insured replaces the policy or causes

 2  its cancellation, if she or he does so within 30 days of the

 3  determination.

 4         2.  The obligation under subparagraph 1. shall include

 5  only that amount of each covered claim which is in excess of

 6  $100 and is less than $300,000, except with respect to

 7  policies covering condominium associations or homeowners'

 8  associations, which associations have a responsibility to

 9  provide insurance coverage on residential units within the

10  association, the obligation shall include that amount of each

11  covered property insurance claim which is less than $100,000

12  multiplied by the number of condominium units or other

13  residential units; however, as to homeowners' associations,

14  this subparagraph applies only to claims for damage or loss to

15  residential units and structures attached to residential

16  units.

17         3.  In no event shall the association be obligated to a

18  policyholder or claimant in an amount in excess of the

19  obligation of the insolvent insurer under the policy from

20  which the claim arises.

21  

22  The foregoing notwithstanding, the association shall have no

23  obligation to pay covered claims to be paid from the proceeds

24  of bonds issued under s. 166.111(2).  However, the association

25  shall cause assessments to be made under paragraph (3)(e) for

26  such covered claims, and such assessments shall be assigned

27  and pledged under paragraph (3)(e) to or on behalf of the

28  issuer of such bonds for the benefit of the holders of such

29  bonds.  The association shall administer any such covered

30  claims and present valid covered claims for payment in

31  

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 1  accordance with the provisions of the assistance program in

 2  connection with which such bonds have been issued.

 3         (b)  Be deemed the insurer to the extent of its

 4  obligation on the covered claims, and, to such extent, shall

 5  have all rights, duties, defenses, and obligations of the

 6  insolvent insurer as if the insurer had not become insolvent.

 7  In no event shall the association be liable for any penalties

 8  or interest.

 9         (3)(a)  To the extent necessary to secure the funds for

10  the respective accounts for the payment of covered claims and

11  also to pay the reasonable costs to administer the same, the

12  office department, upon certification of the board of

13  directors, shall levy assessments in the proportion that each

14  insurer's net direct written premiums in this state in the

15  classes protected by the account bears to the total of said

16  net direct written premiums received in this state by all such

17  insurers for the preceding calendar year for the kinds of

18  insurance included within such account.  Assessments shall be

19  remitted to and administered by the board of directors in the

20  manner specified by the approved plan. Each insurer so

21  assessed shall have at least 30 days' written notice as to the

22  date the assessment is due and payable.  Every assessment

23  shall be made as a uniform percentage applicable to the net

24  direct written premiums of each insurer in the kinds of

25  insurance included within the account in which the assessment

26  is made.  The assessments levied against any insurer shall not

27  exceed in any one year more than 2 percent of that insurer's

28  net direct written premiums in this state for the kinds of

29  insurance included within such account during the calendar

30  year next preceding the date of such assessments.

31  

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 1         (b)  If sufficient funds from such assessments,

 2  together with funds previously raised, are not available in

 3  any one year in the respective account to make all the

 4  payments or reimbursements then owing to insurers, the funds

 5  available shall be prorated and the unpaid portion shall be

 6  paid as soon thereafter as funds become available.

 7         (c)  Assessments shall be included as an appropriate

 8  factor in the making of rates.

 9         (d)  No state funds of any kind shall be allocated or

10  paid to said association or any of its accounts.

11         (e)1.a.  In addition to assessments otherwise

12  authorized in paragraph (a), as a temporary measure related to

13  insolvencies caused by Hurricane Andrew, and to the extent

14  necessary to secure the funds for the account specified in s.

15  631.55(2)(c), or to retire indebtedness, including, without

16  limitation, the principal, redemption premium, if any, and

17  interest on, and related costs of issuance of, bonds issued

18  under s. 166.111(2), and the funding of any reserves and other

19  payments required under the bond resolution or trust indenture

20  pursuant to which such bonds have been issued, the department,

21  upon certification of the board of directors, shall levy

22  assessments upon insurers holding a certificate of authority

23  as follows:

24         (I)  Except as provided in sub-sub-subparagraph (II),

25  the assessments payable under this paragraph by any insurer

26  shall not exceed in any 1 year more than 2 percent of that

27  insurer's direct written premiums, net of refunds, in this

28  state during the preceding calendar year for the kinds of

29  insurance within the account specified in s. 631.55(2)(c).

30         (II)  If the amount levied under sub-sub-subparagraph

31  (I) is less than 2 percent of the insurer's direct written

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 1  premiums, net of refunds, in this state during calendar year

 2  1991 for the kinds of insurance within the account specified

 3  in s. 631.55(2)(c), in addition to and separate from such

 4  assessment, the assessment shall also include the difference

 5  between the amount calculated based on calendar year 1991 and

 6  the amount determined under sub-sub-subparagraph (I).  If this

 7  sub-sub-subparagraph is held invalid, the invalidity shall not

 8  affect other provisions of this section, and to this end the

 9  provisions of this section are declared severable.

10         (III)  In addition to any other insurers subject to

11  this subparagraph, this subparagraph also applies to any

12  insurer that held a certificate of authority on August 24,

13  1992.  If this sub-sub-subparagraph is held invalid, the

14  invalidity shall not affect other provisions of this section,

15  and to this end the provisions of this section are declared

16  severable.

17         b.  Any assessments authorized under this paragraph

18  shall be levied by the department upon insurers referred to in

19  sub-subparagraph a., upon certification as to the need

20  therefor by the board of directors, in 1992 and in each year

21  that bonds issued under s. 166.111(2) are outstanding, in such

22  amounts up to such 2 percent limit as required in order to

23  provide for the full and timely payment of the principal of,

24  redemption premium, if any, and interest on, and related costs

25  of, issuance of bonds issued under s. 166.111(2).  The

26  assessments provided for in this paragraph are hereby assigned

27  and pledged to a municipality issuing bonds under s.

28  166.111(2)(b), for the benefit of the holders of such bonds,

29  in order to enable such municipality to provide for the

30  payment of the principal of, redemption premium, if any, and

31  interest on such bonds, the cost of issuance of such bonds,

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 1  and the funding of any reserves and other payments required

 2  under the bond resolution or trust indenture pursuant to which

 3  such bonds have been issued, without the necessity of any

 4  further action by the association, the department, or any

 5  other party.  To the extent that bonds are issued under s.

 6  166.111(2), the proceeds of assessments levied under this

 7  paragraph shall be remitted directly to and administered by

 8  the trustee appointed for such bonds.

 9         c.  Assessments under this paragraph shall be payable

10  in 12 monthly installments with the first installment being

11  due and payable at the end of the month after an assessment is

12  levied, and subsequent installments being due not later than

13  the end of each succeeding month.

14         d.  The association shall issue a monthly report on the

15  status of the use of the bond proceeds as related to

16  insolvencies caused by Hurricane Andrew. The report must

17  contain the number of claims paid and the amount of claims

18  paid.  The association shall also include an analysis of the

19  revenue generated from the additional assessment levied under

20  this subsection.  The report must be sent to the Legislature

21  and the Insurance Commissioner monthly.

22         2.  In order to assure that insurers paying assessments

23  levied under this paragraph continue to charge rates that are

24  neither inadequate nor excessive, within 90 days after being

25  notified of such assessments, each insurer that is to be

26  assessed pursuant to this paragraph shall make a rate filing

27  for coverage included within the account specified in s.

28  631.55(2)(c) and for which rates are required to be filed

29  under s. 627.062.  If the filing reflects a rate change that,

30  as a percentage, is equal to the difference between the rate

31  of such assessment and the rate of the previous year's

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 1  assessment under this paragraph, the filing shall consist of a

 2  certification so stating and shall be deemed approved when

 3  made, subject to the department's continuing authority to

 4  require actuarial justification as to the adequacy of any rate

 5  at any time. Any rate change of a different percentage shall

 6  be subject to the standards and procedures of s. 627.062.

 7         Section 1367.  Section 631.59, Florida Statutes, is

 8  amended to read:

 9         631.59  Duties and powers of department and office of

10  Insurance.--

11         (1)  The department shall:

12         (a)  Notify the association of the existence of an

13  insolvent insurer not later than 3 days after it receives

14  notice of the determination of the insolvency; and

15         (b)  Upon request of the board of directors, provide

16  the association with a statement of the net direct written

17  premiums of each member insurer.

18         (2)  The department may:

19         (a)  require that the association notify the insureds

20  of the insolvent insurer and any other interested parties of

21  the determination of insolvency and of their rights under this

22  part. Such notification shall be by mail at their last known

23  addresses, when available, but if sufficient information for

24  notification by mail is not available, notice by publication

25  in a newspaper of general circulation shall be sufficient.

26         (3)(b)  The office may:

27         (a)  Suspend or revoke the certificate of authority to

28  transact insurance in this state of any member insurer which

29  fails to pay an assessment when due or fails to comply with

30  the plan of operation.  As an alternative, the office

31  department may levy a fine on any member insurer which fails

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 1  to pay an assessment when due.  Such fine may not exceed 5

 2  percent of the unpaid assessment per month, except that no

 3  fine shall be less than $100 per month.

 4         (b)(c)  Revoke the designation of any servicing

 5  facility if it finds claims are being handled

 6  unsatisfactorily.

 7         Section 1368.  Section 631.62, Florida Statutes, is

 8  amended to read:

 9         631.62  Prevention of insolvencies.--To aid in the

10  detection and prevention of insurer insolvencies:

11         (1)  It shall be the duty of the board of directors,

12  upon majority vote, to notify the office department of any

13  information indicating any member insurer may be insolvent or

14  in a financial condition hazardous to the policyholders or the

15  public.

16         (2)  The board of directors may, upon majority vote,

17  request that the office department order an examination of any

18  member insurer which the board in good faith believes may be

19  in a financial condition hazardous to the policyholders or the

20  public. Within 30 days of the receipt of such request, the

21  office department shall begin such examination.  The

22  examination may be conducted as a National Association of

23  Insurance Commissioners examination or may be conducted by

24  such persons as the office department designates. The cost of

25  such examination shall be paid by the association and the

26  examination report shall be treated as are other examination

27  reports pursuant to s. 624.319.  In no event shall such

28  examination report be released to the board of directors prior

29  to its release to the public.  The office department shall

30  notify the board of directors when the examination is

31  completed.  The request for an examination shall be kept on

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 1  file by the office department; such request is confidential

 2  and exempt from the provisions of s. 119.07(1) until the

 3  examination report is released to the public.

 4         (3)  The board of directors may, upon majority vote,

 5  make reports and recommendations to the department or office

 6  upon any matter germane to the solvency, liquidation,

 7  rehabilitation, or conservation of any member insurer.  Such

 8  reports and recommendations are confidential and exempt from

 9  the provisions of s. 119.07(1) until the termination of a

10  delinquency proceeding.

11         (4)  The board of directors may, upon majority vote,

12  make recommendations to the office department for the

13  detection and prevention of insurer insolvencies.

14         Section 1369.  Section 631.66, Florida Statutes, is

15  amended to read:

16         631.66  Immunity.--There shall be no liability on the

17  part of, and no cause of action of any nature shall arise

18  against, any member insurer, the association or its agents or

19  employees, the board of directors, or the department or office

20  or their its representatives for any action taken by them in

21  the performance of their powers and duties under this part.

22  Such immunity shall extend to the participation in any

23  organization of one or more other state associations of

24  similar purposes and to any such organization and its agents

25  or employees.

26         Section 1370.  Section 631.714, Florida Statutes, is

27  amended to read:

28         631.714  Definitions.--As used in this part, the term:

29         (1)  "Account" means any of the three accounts created

30  in s. 631.715.

31  

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 1         (2)  "Association" means the Florida Life and Health

 2  Insurance Guaranty Association created in s. 631.715.

 3         (3)  "Contractual obligation" means any obligation

 4  under covered policies.

 5         (4)  "Covered policy" means any policy or contract set

 6  out in s. 631.713 and reduced to written, printed, or other

 7  tangible form.

 8         (5)  "Department" means the Department of Insurance.

 9         (5)(6)  "Impaired insurer" means a member insurer

10  deemed by the department to be potentially unable to fulfill

11  its contractual obligations and not an insolvent insurer.

12         (6)(7)  "Insolvent insurer" means a member insurer

13  authorized to transact insurance in this state, either at the

14  time the policy was issued or when the insured event occurred,

15  and against which an order of liquidation with a finding of

16  insolvency has been entered by a court of competent

17  jurisdiction, if such order has become final by the exhaustion

18  of appellate review.

19         (7)(8)  "Member insurer" means any person licensed to

20  transact in this state any kind of insurance as set out in s.

21  631.713.

22         (8)(9)  "Premium" means any direct gross insurance

23  premium and any annuity consideration written on covered

24  policies, less return premium and consideration thereon and

25  dividends paid or credited to policyholders on such direct

26  business.  "Premium" does not include premium and

27  consideration on contracts between insurers and reinsurers.

28         (9)(10)  "Person" means any individual, corporation,

29  partnership, association, or voluntary organization.

30         (10)(11)  "Resident" means any person who resides in

31  this state at the time a member insurer is determined to be an

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 1  impaired or insolvent insurer and to whom contractual

 2  obligations are owed by such impaired or insolvent member

 3  insurer.

 4         Section 1371.  Subsections (2) and (3) of section

 5  631.72, Florida Statutes, are amended to read:

 6         631.72  Premium or income tax credits for assessments

 7  paid.--

 8         (2)  If a member insurer ceases doing business in this

 9  state and surrenders to the office department its certificate

10  of authority to transact insurance in this state, all

11  uncredited assessments may be credited as provided in this

12  section against either its premium or corporate income tax

13  liabilities imposed pursuant to ss. 624.509 and 220.11 for the

14  year it ceases doing business.

15         (3)  Any sums acquired by refund pursuant to s.

16  631.718(6) from the association which have theretofore been

17  written off by contributing insurers and offset against

18  premium or corporate income taxes as provided in subsection

19  (1) and which are not needed for purposes of this part shall

20  be paid by the insurer to the Department of Revenue for

21  deposit with the Chief Financial Officer Treasurer to the

22  credit of the General Revenue Fund.

23         Section 1372.  Section 631.722, Florida Statutes, is

24  amended to read:

25         631.722  Powers and duties of department and office.--

26         (1)  The office department shall:

27         (a)  Upon request of the board of directors, provide

28  the association with a statement of the premiums in each of

29  the appropriate states for each member insurer.

30         (b)  When an impairment is declared and the amount of

31  the impairment is determined, serve a demand upon the impaired

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 1  insurer to make good the impairment within a reasonable time.

 2  Notice to the impaired insurer shall constitute notice to its

 3  shareholders, if any.  The failure of the insurer to promptly

 4  comply with such demand shall not excuse the association from

 5  the performance of its powers and duties under this part.

 6         (2)(c)  The department shall, in any liquidation or

 7  rehabilitation proceeding involving a domestic insurer, be

 8  appointed as the liquidator or rehabilitator.  If a foreign or

 9  alien member insurer is subject to a liquidation proceeding in

10  its domiciliary jurisdiction or state of entry, the department

11  shall be appointed conservator.

12         (3)(2)  The office department may suspend or revoke,

13  after notice and hearing, the certificate of authority to

14  transact insurance in this state of any member insurer that

15  fails to pay an assessment when due or fails to comply with

16  the approved plan of operation of the association.  As an

17  alternative, the office department may levy a forfeiture on

18  any member insurer that fails to pay an assessment when due.

19  Such forfeiture shall not exceed 5 percent of the unpaid

20  assessment per month, but no forfeiture shall be less than

21  $100 per month.

22         (4)(3)  Any action of the board of directors or of the

23  association may be appealed to the office department by any

24  member insurer if such appeal is taken within 30 days of the

25  action being appealed.  If a member company is appealing an

26  assessment, the amount assessed shall be paid to the

27  association and available to meet association obligations

28  during the pendency of the appeal. If the appeal on the

29  assessment is upheld, the amount paid in error or excess shall

30  be returned to the member company.  Any final action or order

31  

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 1  of the office department shall be subject to judicial review

 2  in a court of competent jurisdiction.

 3         (5)(4)  The liquidator, rehabilitator, or conservator

 4  of any impaired insurer may notify all interested persons of

 5  the effect of this part.

 6         Section 1373.  Section 631.723, Florida Statutes, is

 7  amended to read:

 8         631.723  Prevention of insolvencies.--To aid in the

 9  detection and prevention of insurer insolvencies or

10  impairments:

11         (1)  The board of directors may, upon majority vote,

12  make reports and recommendations to the department or office

13  upon any matter germane to the solvency, liquidation,

14  rehabilitation, or conservation of any member insurer or

15  germane to the solvency of any company seeking to do an

16  insurance business in this state. Such reports and

17  recommendations are confidential and exempt from the

18  provisions of s. 119.07(1) until the termination of a

19  delinquency proceeding.

20         (2)  It is the duty of the board of directors, upon a

21  majority vote, to notify the office department of any

22  information indicating that any member insurer may be an

23  impaired or insolvent insurer.

24         (3)  The board of directors may, upon majority vote,

25  request that the office department order an examination of any

26  member insurer which the board in good faith believes may be

27  an impaired or insolvent insurer.  Within 30 days of the

28  receipt of such a request, the office department shall begin

29  such an examination.  The examination may be conducted as a

30  National Association of Insurance Commissioners examination or

31  may be conducted by such persons as the office Insurance

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 1  Commissioner designates.  The cost of such examination shall

 2  be paid by the association, and the examination report shall

 3  be treated in a manner similar to other examination reports

 4  pursuant to s. 624.319.  In no event may such examination

 5  report be released to the board of directors before its

 6  release to the public, but this does not preclude the office

 7  department from complying with s. 631.398(2).  The office

 8  department shall notify the board of directors when the

 9  examination is completed.  The request for an examination

10  shall be kept on file by the office department; such request

11  is confidential and exempt from the provisions of s. 119.07(1)

12  until the examination report is released to the public.

13         (4)  The board of directors may, upon majority vote,

14  make recommendations to the office department for the

15  detection and prevention of insurer insolvencies.

16         Section 1374.  Section 631.727, Florida Statutes, is

17  amended to read:

18         631.727  Immunity.--There shall be no liability on the

19  part of, and no cause of action of any nature shall arise

20  against, any member insurer or its agents or employees, the

21  association or its agents or employees, members of the board

22  of directors, or the department or office or their its

23  representatives for any action taken by them in the

24  performance of their powers and duties under this part.  Such

25  immunity shall extend to the participation in any organization

26  of one or more other state associations of similar purposes

27  and to any such organization and its agents or employees.

28         Section 1375.  Section 631.813, Florida Statutes, is

29  amended to read:

30         631.813  Application of part.--This part shall apply to

31  HMO contractual obligations to residents of Florida by HMOs

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 1  possessing a valid certificate of authority issued by the

 2  Florida Department of Insurance as provided by part I of

 3  chapter 641.  The provisions of this part shall not apply to

 4  persons participating in medical assistance programs under the

 5  Medicaid program.

 6         Section 1376.  Section 631.814, Florida Statutes, is

 7  amended to read:

 8         631.814  Definitions.--As used in this part, the term:

 9         (1)  "Plan" means the Florida Health Maintenance

10  Organization Consumer Assistance Plan created by this part.

11         (2)  "Board" means the board of directors of the plan.

12         (3)  "Contractual obligations" means any obligation

13  under covered health care policies.

14         (4)  "Covered policy" means any policy or contract

15  issued by an HMO for health care services.

16         (5)  "Date of insolvency" means the effective date of

17  an order of liquidation entered by a court of competent

18  jurisdiction.

19         (6)  "Department" means the Florida Department of

20  Insurance.

21         (6)(7)  "Health care services" means comprehensive

22  health care services as defined in s. 641.19.

23         (7)(8)  "HMO" means a health maintenance organization

24  possessing a valid certificate of authority issued by the

25  department pursuant to part I of chapter 641.

26         (8)(9)  "Insolvent HMO" means an HMO against which an

27  order of rehabilitation or liquidation has been entered by a

28  court of competent jurisdiction, with the department appointed

29  as receiver, even if such order has not become final by the

30  exhaustion of appellate reviews.

31  

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 1         (9)(10)  "Person" means any individual, corporation,

 2  partnership, association, or voluntary organization.

 3         (10)(11)  "Subscriber" means any resident of this state

 4  who is enrolled for benefits provided by an HMO and who makes

 5  premium payments or for whom premium payments are made.

 6         Section 1377.  Section 631.821, Florida Statutes, is

 7  amended to read:

 8         631.821  Powers and duties of the department and

 9  office.--

10         (1)  The office department may suspend or revoke, after

11  notice and hearing, the certificate of authority of a member

12  HMO that fails to pay an assessment when due, fails to comply

13  with the approved plan of operation of the plan, or fails

14  either to timely comply with or to timely appeal pursuant to

15  subsection (2) its appointment under s. 631.818(2).

16         (2)  Any action of the board of directors of the plan

17  may be appealed to the department by any member HMO if such

18  appeal is taken within 21 days of the action being appealed;

19  however, the HMO must comply with such action pending

20  exhaustion of appeal under s. 631.818(2).  Any appeal shall be

21  promptly determined by the department, and final action or

22  order of the department shall be subject to judicial review in

23  a court of competent jurisdiction.

24         (3)  The department may:

25         (a)  require that the plan notify the subscriber of the

26  insolvent HMO and any other interested parties of the

27  determination of insolvency and of their rights under this

28  part. Such notification shall be by mail at their last known

29  addresses, when available, but if sufficient information for

30  notification by mail is not available, notice by publication

31  in a newspaper of general circulation shall be sufficient.

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 1         (4)(b)  The office may revoke the designation of any

 2  servicing facility or administrator if it finds claims are

 3  being handled unsatisfactorily.

 4         Section 1378.  Section 631.825, Florida Statutes, is

 5  amended to read:

 6         631.825  Immunity.--There shall be no liability on the

 7  part of, and no cause of action of any nature shall arise

 8  against, any member HMO or its agents or employees, the plan

 9  or its agents or employees, members of the board of directors,

10  or the department or office or their its representatives for

11  any action taken by them in the performance of their powers

12  and duties under this part.

13         Section 1379.  Section 631.904, Florida Statutes, is

14  amended to read:

15         631.904  Definitions.--As used in this part, the term:

16         (1)  "Corporation" means the Florida Workers'

17  Compensation Insurance Guaranty Association, Incorporated.

18         (2)  "Covered claim" means an unpaid claim, including a

19  claim for return of unearned premiums, which arises out of, is

20  within the coverage of, and is not in excess of the applicable

21  limits of, an insurance policy to which this part applies,

22  which policy was issued by an insurer and which claim is made

23  on behalf of a claimant or insured who was a resident of this

24  state at the time of the injury. The term "covered claim" does

25  not include any amount sought as a return of premium under any

26  retrospective rating plan; any amount due any reinsurer,

27  insurer, insurance pool, or underwriting association, as

28  subrogation recoveries or otherwise; or any return of premium

29  resulting from a policy that was not in force on the date of

30  the final order of liquidation. Member insurers have no right

31  of subrogation  against the insured of any insolvent insurer.

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 1  This provision shall be applied retroactively to cover claims

 2  of an insolvent self-insurance fund resulting from accidents

 3  or losses incurred prior to January 1, 1994, regardless of the

 4  date the Department of Insurance filed a petition in circuit

 5  court was filed alleging insolvency and the date the court

 6  entered an order appointing a receiver.

 7         (3)  "Department" means the Department of Insurance.

 8         (3)(4)  "Insolvency" means that condition in which all

 9  of the assets of the insurer, if made immediately available,

10  would not be sufficient to discharge all of its liabilities or

11  that condition in which the insurer is unable to pay its debts

12  as they become due in the usual course of business. When the

13  context of any provision of this part so indicates, insolvency

14  also includes impairment of surplus or impairment of capital.

15         (4)(5)  "Insolvent insurer" means an insurer that was

16  authorized to transact insurance in this state, either at the

17  time the policy was issued or when the insured event occurred,

18  and against which an order of liquidation with a finding of

19  insolvency has been entered by a court of competent

20  jurisdiction if such order has become final by the exhaustion

21  of appellate review.

22         (5)(6)  "Insurer" means an insurance carrier or

23  self-insurance fund authorized to insure under chapter 440.

24  For purposes of this act, "insurer" does not include a

25  qualified local government self-insurance fund, as defined in

26  s. 624.4622, or an individual self-insurer as defined in s.

27  440.385.

28         (6)(7)  "Self-insurance fund" means a group

29  self-insurance fund authorized under s. 624.4621, a commercial

30  self-insurance fund writing workers' compensation insurance

31  authorized under s. 624.462, or an assessable mutual insurer

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 1  authorized under s. 628.6011. For purposes of this act,

 2  "self-insurance fund" does not include a qualified local

 3  government self-insurance fund, as defined in s. 624.4622, or

 4  an individual self-insurer as defined in s. 440.385.

 5         Section 1380.  Subsection (1) of section 631.911,

 6  Florida Statutes, is amended to read:

 7         631.911  Creation of the Florida Workers' Compensation

 8  Insurance Guaranty Association, Incorporated; merger; effect

 9  of merger.--

10         (1)(a)  The Florida Self-Insurance Fund Guaranty

11  Association established in former part V of chapter 631 and

12  the workers' compensation insurance account, which includes

13  excess workers' compensation insurance, established in former

14  s. 631.55(2)(a) shall be merged, effective October 1, 1997, or

15  as provided in paragraph (b), in accordance with the plan of

16  operation adopted by the interim board of directors.  The

17  successor nonprofit corporation shall be known as the "Florida

18  Workers' Compensation Insurance Guaranty Association,

19  Incorporated."

20         (b)  The merger may be effected prior to October 1,

21  1997, if:

22         1.  The interim board of directors of the Workers'

23  Compensation Insurance Guaranty Association provides the

24  Department of Insurance with written notice of its intent to

25  effectuate the merger as of a date certain and its functional

26  readiness to initiate operations, such notice setting forth

27  the plan or summary thereof for effecting the merger; and,

28         2.  The department, upon review of the plan or summary

29  thereof, determines the Workers' Compensation Insurance

30  Guaranty Association is functionally ready to initiate

31  operations and so certifies to the interim board of directors.

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 1         (c)  Prior to the effective date of the merger, the

 2  Florida Self-Insurance Fund Guaranty Association shall be the

 3  entity responsible for the claims of insolvent self-insurance

 4  funds resulting from accidents or losses incurred prior to

 5  January 1, 1994, regardless of the date the Department of

 6  Insurance filed a petition in circuit court alleging

 7  insolvency and the date the court entered an order appointing

 8  a receiver.

 9         (b)(d)  Upon the effective date of the merger:

10         1.  The Florida Self-Insurance Fund Guaranty

11  Association and the workers' compensation insurance account

12  within the Florida Insurance Guaranty Association cease to

13  exist and are succeeded by the Florida Workers' Compensation

14  Insurance Guaranty Association.

15         2.  Title to all assets of any description, all real

16  estate and other property, or any interest therein, owned by

17  each party to the merger is vested in the successor

18  corporation without reversion or impairment.

19         3.  The successor corporation shall be responsible and

20  liable for all the liabilities and obligations of each party

21  to the merger.

22         4.  Any claim existing or action or proceeding pending

23  by or against any party to the merger may be continued as if

24  the merger did not occur or the successor corporation may be

25  substituted in the proceeding for the corporation or account

26  which ceased existence.

27         5.  Neither the rights of creditors nor any liens upon

28  the property of any party to the merger shall be impaired by

29  such merger.

30         6.  Outstanding assessments levied by the Florida

31  Self-Insurance Guaranty Association or the Florida Insurance

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 1  Guaranty Association on behalf of the workers' compensation

 2  insurance account remain in full force and effect and shall be

 3  paid when due.

 4         Section 1381.  Subsections (1) and (3) of section

 5  631.912, Florida Statutes, are amended to read:

 6         631.912  Board of directors.--

 7         (1)  The board of directors of the corporation shall

 8  consist of 11 persons, 1 of whom is the insurance consumer

 9  advocate appointed under s. 627.0613 or designee and 1 of whom

10  is designated by the Chief Financial Officer Insurance

11  Commissioner. The department shall appoint to the board 6

12  persons selected by private carriers from among the 20

13  workers' compensation insurers with the largest amount of net

14  direct written premium as determined by the department, and 3

15  persons selected by the self-insurance funds. At least two of

16  the private carriers shall be foreign carriers authorized to

17  do business in this state. The board shall elect a chairperson

18  from among its members. The Chief Financial Officer

19  commissioner may remove any board member for cause. Each board

20  member shall serve for a 4-year term and may be reappointed,

21  except that four members of the initial board shall have

22  2-year terms so as to stagger the periods of service. A

23  vacancy on the board shall be filled for the remaining period

24  of the term in the same manner by which the original

25  appointment was made.

26         (3)  Effective upon this act becoming a law, the

27  persons on the board of directors created pursuant to s.

28  627.311(4)(a) who evidence a willingness to serve in writing,

29  shall serve as an interim board of directors of the

30  corporation until the initial board of directors has been

31  appointed for the corporation in accordance with the

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 1  provisions of subsection (1). The interim board of directors

 2  shall serve for a period not to exceed 6 months. The initial

 3  meeting shall be called by the commissioner within 30 days

 4  after this act becomes a law. The interim board of directors

 5  shall establish a process for the selection of persons to

 6  serve on the board of the Florida Workers' Compensation

 7  Insurance Guaranty Association in accordance with the terms of

 8  subsection (1).  The board of directors shall adopt an interim

 9  plan of operation to effect the merger in s. 631.911 and avoid

10  any interruption of benefit payments to injured workers.  When

11  necessary and upon approval of the chairs of their respective

12  board of directors, the Florida Self-Insurance Fund Guaranty

13  Association and the Florida Insurance Guaranty Association

14  shall provide staff support to the interim board of directors.

15  The board shall submit the interim plan to the commissioner,

16  who shall approve or disapprove the plan within 30 days after

17  receipt.

18         Section 1382.  Section 631.917, Florida Statutes, is

19  amended to read:

20         631.917  Prevention of insolvencies.--To aid in the

21  detection and prevention of insolvencies or impairments:

22         (1)(a)  The board may make reasonable and lawful

23  investigation into the practices of any third-party

24  administrator or service company for a self-insurance fund

25  declared insolvent by the court.

26         (b)  If the results of an investigation reasonably lead

27  to a finding that certain actions taken or not taken by those

28  handling, processing, or preparing covered claims for payment

29  or other benefit pursuant to any workers' compensation

30  insurance policy contributed to the insolvency of an insurer,

31  

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 1  such information may, in the discretion of the board, be

 2  provided to the department or office in an expedited manner.

 3         (2)  The board of directors may make reports and

 4  recommendations to the department or office upon any matter

 5  germane to the solvency, liquidation, rehabilitation, or

 6  conservation of any member insurer or germane to the solvency

 7  of any insurer seeking to do insurance business in this state.

 8         (3)  The board of directors, in its discretion, may

 9  notify the office department of any information indicating

10  that any member insurer may be an impaired or insolvent

11  insurer.

12         (4)  The board of directors, in its discretion, may

13  request that the office department order an examination of any

14  member insurer which the board in good faith believes may be

15  an impaired or insolvent insurer.  Within 30 days after

16  receipt of such a request, the office department shall begin

17  such an examination. The examination may be conducted as a

18  National Association of Insurance Commissioners examination or

19  may be conducted by such persons as the office Insurance

20  Commissioner designates.  The cost of such examination shall

21  be paid by the corporation, and the examination report shall

22  be treated in a manner similar to other examination reports

23  pursuant to s. 624.319.  In no event may such examination

24  report be released to the board of directors before its

25  release to the public, but this requirement does not preclude

26  the office department from complying with s. 631.398(2).  The

27  office department shall notify the board of directors when the

28  examination is completed.  The request for an examination

29  shall be kept on file by the office department.

30         (5)  The board is authorized to assist and aid the

31  department or office, in any manner consistent with existing

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 1  laws and this chapter, in the department's or office's

 2  investigation or referral for prosecution of those whose

 3  action or inaction may have contributed to the impairment or

 4  insolvency of the insurer.

 5         (6)  The board may make recommendations to the office

 6  department for the detection and prevention of insurer

 7  insolvencies.

 8         Section 1383.  Section 631.918, Florida Statutes, is

 9  amended to read:

10         631.918  Immunity.--There is no liability on the part

11  of, and a cause of action may not arise against, the

12  corporation, its agents or employees, or members of its board

13  of directors, or the department or office or their its agents

14  or employees, for any action taken by them in the performance

15  of their powers and duties under this section, unless such

16  action is found to be a violation of antitrust laws, was in

17  bad faith, or was undertaken with malicious purpose or in a

18  manner exhibiting wanton and willful disregard of human

19  rights, safety, or property.

20         Section 1384.  Section 631.931, Florida Statutes, is

21  amended to read:

22         631.931  Reports and recommendations by board; public

23  records exemption.--Reports and recommendations made by the

24  Board of Directors of the Florida Workers' Compensation

25  Insurance Guaranty Association to the Department of Insurance

26  under s. 631.917 upon any matter germane to the solvency,

27  liquidation, rehabilitation, or conservation of any member

28  insurer are confidential and exempt from the provisions of s.

29  119.07(1) and s. 24(a), Art. I of the State Constitution until

30  the termination of a delinquency proceeding.

31  

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 1         Section 1385.  Subsections (2), (3), (4), and (5) of

 2  section 632.611, Florida Statutes, are amended to read:

 3         632.611  Organization.--A domestic society organized on

 4  or after June 24, 1986, shall be formed as follows:

 5         (2)  Such articles of incorporation; duly certified

 6  copies of the society's bylaws and rules; copies of all

 7  proposed forms of certificates, applications therefor, and

 8  circulars to be issued by the society; and a bond, conditioned

 9  upon the return to the applicants of the advanced payments if

10  the organization is not completed within 1 year, shall be

11  filed with the office department, which may require such

12  further information as it deems necessary. The bond with

13  sureties approved by the office department shall be in such

14  amount, not less than $300,000 nor more than $1.5 million, as

15  required by the office department. All documents filed are to

16  be in the English language.  If the purposes of the society

17  conform to the requirements of this chapter and all provisions

18  of the law have been complied with, the office department

19  shall so certify, retain, and file the articles of

20  incorporation and shall furnish the incorporators a

21  preliminary certificate authorizing the society to solicit

22  members as hereinafter provided.

23         (3)  No preliminary certificate granted under the

24  provisions of this section shall be valid after 1 year from

25  its date or after such further period, not exceeding 1 year,

26  as may be authorized by the office department upon cause

27  shown. The articles of incorporation and all other proceedings

28  thereunder shall become null and void in 1 year from the date

29  of the preliminary certificate, or at the expiration of the

30  extended period, unless the society shall have completed its

31  

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 1  organization and received a certificate of authority to do

 2  business as hereinafter provided.

 3         (4)  Upon receipt of a preliminary certificate of

 4  authority from the office department, the society may solicit

 5  members for the purpose of completing its organization, shall

 6  collect from each applicant the amount of not less than one

 7  regular monthly premium in accordance with its table of rates,

 8  and shall issue to each such applicant a receipt for the

 9  amount so collected.  No society shall incur any liability

10  other than for the return of such advance premium, nor issue

11  any certificate, nor pay, allow, or offer or promise to pay or

12  allow, any benefit, to any person until:

13         (a)  Actual bona fide applications for benefits have

14  been secured on not less than 500 applicants, and any

15  necessary evidence of insurability has been furnished to and

16  approved by the society;

17         (b)  At least 10 subordinate lodges have been

18  established into which the 500 applicants have been admitted;

19         (c)  There has been submitted to the office department,

20  under oath of the president or secretary, or corresponding

21  officer of the society, a list of such applicants, giving

22  their names, addresses, date each was admitted, name and

23  number of the subordinate lodge of which each applicant is a

24  member, amount of benefits to be granted and the premiums

25  therefor; and

26         (d)  It shall have been shown to the office department,

27  by sworn statement of the treasurer or corresponding officer

28  of such society, that at least 500 applicants have each paid

29  in cash at least one regular monthly premium as herein

30  provided, which premiums in the aggregate shall amount to at

31  least $150,000.  Such advance premiums shall be held in trust

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 1  during the period of organization and if the society has not

 2  qualified for a certificate of authority within 1 year, as

 3  herein provided, such premiums shall be returned to said

 4  applicants.

 5         (5)  The office department may make such examination

 6  and require such further information as it deems advisable.

 7  Upon presentation of satisfactory evidence that the society

 8  has complied with all the provisions of law, the office

 9  department shall issue to the society a certificate of

10  authority to that effect and to the effect that the society is

11  authorized to transact business pursuant to the provisions of

12  this chapter.  The certificate of authority shall be prima

13  facie evidence of the existence of the society at the date of

14  such certificate.  The office department shall cause a record

15  of such certificate of authority to be made.  A certified copy

16  of such record may be given in evidence with like effect as

17  the original certificate of authority.

18         Section 1386.  Subsections (2), (3), and (4) of section

19  632.612, Florida Statutes, are amended to read:

20         632.612  Amendments to laws.--

21         (2)  No amendment to the laws of any domestic society

22  shall take effect unless approved by the office department,

23  which shall approve such amendment if it finds that the

24  amendment has been duly adopted and is not inconsistent with

25  any requirement of the laws of this state or with the

26  character, objects, and purposes of the society.  Unless the

27  office department shall disapprove any such amendment within

28  90 days after the filing of same, the amendment shall be

29  considered approved.  The approval or disapproval of the

30  office department shall be in writing and mailed to the

31  secretary or corresponding officer of the society at its

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 1  principal office.  In case the office department disapproves

 2  the amendment, the reasons therefor shall be stated in the

 3  written notice.

 4         (3)  Within 90 days from the approval thereof by the

 5  office department, all such amendments or a synopsis thereof

 6  shall be furnished to all members of the society either by

 7  mail or by publication in full in the official publication of

 8  the society. The affidavit of any officer of the society or of

 9  anyone authorized by it to mail any amendments or a synopsis

10  thereof, stating facts which show that same have been duly

11  addressed and mailed, shall be prima facie evidence that such

12  amendments or a synopsis thereof have been furnished the

13  addressee.

14         (4)  Every foreign or alien society authorized to do

15  business in this state shall file with the office department a

16  duly certified copy of all amendments of, or additions to, its

17  laws within 90 days after the enactment of same.

18         Section 1387.  Section 632.614, Florida Statutes, is

19  amended to read:

20         632.614  Reinsurance.--

21         (1)  A domestic society may, by a reinsurance

22  agreement, cede any individual risk or risks in whole or in

23  part to an insurer, other than another fraternal benefit

24  society, having the power to make such reinsurance and

25  authorized to do business in this state, or if not so

26  authorized, to an insurer which is approved by the office

27  department. However, no domestic society may reinsure 75

28  percent or more of its insurance in force without the written

29  permission of the office department.  The domestic society may

30  take credit for the reserves on such ceded risks to the extent

31  reinsured, but no credit shall be allowed as an admitted asset

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 1  or as a deduction from liability, to a ceding society for

 2  reinsurance made, ceded, renewed, or otherwise becoming

 3  effective after the effective date of this act, unless the

 4  reinsurance is payable by the assuming insurer on the basis of

 5  the liability of the ceding society under the contract or

 6  contracts reinsured without diminution because of the

 7  insolvency of the ceding society.

 8         (2)  Notwithstanding the limitation in subsection (1),

 9  a society may reinsure the risks of another society in a

10  consolidation or merger approved by the office department

11  under s. 632.615.

12         Section 1388.  Subsections (1) and (2) of section

13  632.615, Florida Statutes, are amended to read:

14         632.615  Consolidations and mergers.--

15         (1)  A domestic society may not consolidate or merge

16  with any other insurer other than another society.  It may

17  consolidate or merge with another society by complying with

18  the provisions of this section.  It shall file with the office

19  department:

20         (a)  A certified copy of the written contract

21  containing in full the terms and conditions of the

22  consolidation or merger;

23         (b)  A sworn statement by the president and secretary

24  or corresponding officers of each society showing the

25  financial condition thereof on a date fixed by the office

26  department but not earlier than December 31 next preceding the

27  date of the contract;

28         (c)  A certificate of such officers, duly verified by

29  their respective oaths, that the consolidation or merger has

30  been approved by a two-thirds vote of the supreme governing

31  body of each society, such vote being conducted at a regular

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 1  or special meeting of each such body, or, if the society's

 2  laws so permit, by mail; and

 3         (d)  Evidence that at least 60 days prior to the action

 4  of the supreme governing body of each society, the text of the

 5  contract has been furnished to all members of each society

 6  either by mail or by publication in full in the official

 7  publication of each society.

 8         (2)  If the office department finds that the contract

 9  is in conformity with the provisions of this section, that the

10  financial statements are correct, and that the consolidation

11  or merger is just and equitable to the members of each

12  society, the office department shall approve the contract and

13  issue a certificate to such effect. Upon such approval, the

14  contract shall be in full force and effect unless any society

15  which is a party to the contract is incorporated under the

16  laws of any other state or territory.  In such event the

17  consolidation or merger shall not become effective unless and

18  until it has been approved as provided by the laws of such

19  state or territory and a certificate of such approval filed

20  with the office department or, if the laws of such state or

21  territory contain no such provision, then the consolidation or

22  merger shall not become effective unless and until it has been

23  approved by the insurance supervisory official of such state

24  or territory and a certificate of such approval filed with the

25  office department.

26         Section 1389.  Section 632.616, Florida Statutes, is

27  amended to read:

28         632.616  Conversion of fraternal benefit society into

29  mutual life insurance company.--Any domestic fraternal benefit

30  society may be converted and licensed as a mutual life

31  insurance company by compliance with all the requirements of

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 1  chapter 628.  A plan of conversion shall be prepared in

 2  writing by the board of directors setting forth in full the

 3  terms and conditions of conversion.  The affirmative vote of

 4  two-thirds of all members of the supreme governing body at a

 5  regular or special meeting shall be necessary for the approval

 6  of such plan.  No such conversion shall take effect unless and

 7  until approved by the office department, which may give such

 8  approval if it finds that the proposed change is in conformity

 9  with the requirements of law and not prejudicial to the

10  certificateholders of the society.

11         Section 1390.  Subsection (6) of section 632.621,

12  Florida Statutes, is amended to read:

13         632.621  The benefit contract.--

14         (6)  No certificate shall be delivered or issued for

15  delivery in this state unless a copy of the form has been

16  filed with the office department in the manner provided for

17  like policies issued by life insurers in this state.  Every

18  life, accident, health, or disability insurance certificate

19  and every annuity certificate issued on or after one year from

20  June 24, 1986, shall meet the standard contract provision

21  requirements not inconsistent with this chapter for like

22  policies issued by life insurers in this state, except that a

23  society may provide for a grace period for payment of premiums

24  of 1 full month in its certificates.  The certificate shall

25  also contain a provision stating the amount of premiums which

26  are payable under the certificate and a provision reciting or

27  setting forth the substance of any sections of the society's

28  laws or rules in force at the time of issuance of the

29  certificate which, if violated, will result in the termination

30  or reduction of benefits payable under the certificate.  If

31  the laws of the society provide for expulsion or suspension of

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 1  a member, the certificate shall also contain a provision that

 2  any member so expelled or suspended, except for nonpayment of

 3  a premium or within the contestable period for material

 4  misrepresentation in the application for membership or

 5  insurance, shall have the privilege of maintaining the

 6  certificate in force by continuing payment of the required

 7  premium.

 8         Section 1391.  Subsection (2) of section 632.622,

 9  Florida Statutes, is amended to read:

10         632.622  Nonforfeiture benefits, cash surrender values,

11  certificate loans, and other options.--

12         (2)  For certificates issued on or after October 1,

13  1982, reserves shall be computed utilizing the appropriate

14  mortality tables approved by the office department for

15  policies containing life insurance benefits made applicable to

16  life insurers under s. 625.121.

17         Section 1392.  Subsection (3) of section 632.627,

18  Florida Statutes, is amended to read:

19         632.627  Valuation.--

20         (3)  The office department may, in its discretion,

21  accept other standards for valuation if it finds that the

22  reserves produced thereby will not be less in the aggregate

23  than reserves computed in accordance with the minimum

24  valuation standard herein prescribed.  The office department

25  may, in its discretion, vary the standards of mortality

26  applicable to all benefit contracts on substandard lives or

27  other extra hazardous lives by any society authorized to do

28  business in this state.

29         Section 1393.  Section 632.628, Florida Statutes, is

30  amended to read:

31         632.628  Reports.--

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 1         (1)  Reports shall be filed in accordance with the

 2  provisions of this section.  Every society transacting

 3  business in this state shall annually, on or before March 1,

 4  unless for cause shown such time has been extended by the

 5  office department, file with the office department a true

 6  statement of its financial condition, transactions, and

 7  affairs for the preceding calendar year and pay a fee for

 8  filing same, as provided in s. 624.501(4).  The statement

 9  shall be in general form and context as approved by the

10  National Association of Insurance Commissioners for fraternal

11  benefits societies and as supplemented by additional

12  information required by the office department.

13         (2)  As part of the annual statement herein required,

14  each society shall, on or before March 1, file with the office

15  department a valuation of its certificates in force on

16  December 31 last preceding, provided the office department

17  may, in its discretion for cause shown, extend the time for

18  filing such valuation for not more than 2 calendar months.

19  Such valuation shall be done in accordance with the standards

20  specified in s. 632.627.  Such valuation and underlying data

21  shall be certified by a qualified actuary or, at the expense

22  of the society, verified by the actuary of the insurance

23  regulatory agency department of insurance of the state of

24  domicile of the society.

25         (3)  A society neglecting to file the annual statement

26  in the form and within the time provided by this section shall

27  be subject to an administrative fine in an amount up to $100

28  for each day during which such neglect continues, and, upon

29  notice by the office department to that effect, its authority

30  to do business in this state shall cease while such default

31  continues.

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 1         (4)  The office department shall deposit all fees

 2  received under this section to the credit of the Insurance

 3  Commissioner's Regulatory Trust Fund.

 4         Section 1394.  Section 632.629, Florida Statutes, is

 5  amended to read:

 6         632.629  Annual license.--

 7         (1)  A fraternal benefit society may not transact

 8  business in this state unless authorized therefor under a

 9  subsisting license issued to the society by the office

10  department.

11         (2)  A license issued or renewed under this chapter

12  shall continue in force as long as the society is entitled

13  thereto under this chapter and until suspended or revoked by

14  the office department or terminated at the request of the

15  society, provided:

16         (a)  The society pays, prior to June 1, the annual

17  license tax provided for in s. 624.501(3); and

18         (b)  The office department is satisfied that the

19  society has met the applicable requirements of the Florida

20  Insurance Code.

21         (3)  If the license is not continued by the society,

22  the license shall expire at midnight on May 31 following

23  failure of the society to continue it.  The office department

24  shall promptly notify the society of the impending expiration

25  of its license.

26         (4)  The office department may reinstate a license

27  which the society has inadvertently permitted to expire, after

28  the society has fully cured all its failures which resulted in

29  the expiration and upon payment by the society of the fee for

30  reinstatement in the amount provided in s. 624.501(1)(b).

31  Otherwise, the society shall be granted another license only

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 1  after filing application therefor and meeting all other

 2  requirements for an original license in this state.

 3         (5)  A duly certified copy or duplicate of such license

 4  shall be prima facie evidence that the licensee is a fraternal

 5  benefit society within the meaning of this chapter.

 6         Section 1395.  Section 632.631, Florida Statutes, is

 7  amended to read:

 8         632.631  Examination of societies; no adverse

 9  publications.--

10         (1)  The office department, or any person it may

11  appoint, may examine any domestic, foreign, or alien society

12  transacting or applying for admission to transact business in

13  this state in the same manner as authorized for examination of

14  domestic, foreign, or alien insurers.  Requirements of notice

15  and an opportunity to respond before findings are made public

16  as provided in the laws regulating insurers shall also be

17  applicable to the examination of societies.

18         (2)  The expense of each examination and of each

19  valuation, including compensation and actual expense of

20  examiners, shall be paid by the society examined or whose

21  certificates are valued, upon statements furnished by the

22  office department.

23         Section 1396.  Section 632.632, Florida Statutes, is

24  amended to read:

25         632.632  Foreign or alien society; admission.--No

26  foreign or alien society shall transact business in this state

27  without a license issued by the office department. Any such

28  society desiring admission to this state shall have the

29  qualifications required of domestic societies organized under

30  this chapter.  Any such society may be licensed to transact

31  business in this state upon filing with the office department:

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 1         (1)  A duly certified copy of its articles of

 2  incorporation;

 3         (2)  A copy of its bylaws, certified by its secretary

 4  or corresponding officer;

 5         (3)  A power of attorney to the office department;

 6         (4)  A copy of its most recent annual statement

 7  certified under oath by its president and secretary or

 8  corresponding officers in a form prescribed by the commission

 9  department;

10         (5)  A copy of an examination report conducted within

11  the most recent 3-year period by the supervising insurance

12  official of its home state or other state, territory,

13  province, or country, satisfactory to the office department;

14         (6)  Certification from the proper official of its home

15  state, territory, province, or country that the society is

16  legally incorporated and licensed to transact business

17  therein;

18         (7)  Copies of its certificate forms; and

19         (8)  Such other information as the office department

20  may deem necessary;

21  

22  and upon a showing satisfactory to the office department that

23  its assets are invested in accordance with the provisions of

24  this chapter.

25         Section 1397.  Section 632.633, Florida Statutes, is

26  amended to read:

27         632.633  Additional grounds for suspension, revocation,

28  or denial of certificate of authority; receivership;

29  insolvency.--

30         (1)  In addition to the grounds set forth in s.

31  624.418, the office department may, in its discretion,

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 1  suspend, revoke, or deny the certificate of authority of a

 2  society, if it finds that the society:

 3         (a)  Has exceeded its powers;

 4         (b)  Has failed to comply with any provision of this

 5  chapter;

 6         (c)  Is not fulfilling its contracts in good faith;

 7         (d)  Has a membership of less than 400 after an

 8  existence of 1 year or more; or

 9         (e)  Is conducting business fraudulently or in a manner

10  hazardous to its members, creditors, the public, or the

11  business.

12         (2)  In addition to the grounds set forth in s.

13  626.9571, whenever the office department has reason to believe

14  that any society is operating in violation of this chapter or

15  of any provision of the Florida Insurance Code applicable to

16  societies, the provisions of ss. 626.9571, 626.9581, 626.9591,

17  and 626.9601 shall apply.

18         (3)  Any rehabilitation, liquidation, conservation, or

19  dissolution of a society shall be conducted under the

20  supervision of the department.  The department and office

21  shall have all the powers with respect to such rehabilitation,

22  liquidation, conservation, or dissolution that are granted to

23  the department and office under the laws governing the

24  rehabilitation, liquidation, conservation, or dissolution of

25  life insurance companies.

26         Section 1398.  Subsection (5) of section 632.637,

27  Florida Statutes, is amended to read:

28         632.637  Exemption of certain societies.--

29         (5)  The office department may require from any society

30  or association, by examination or otherwise, such information

31  as will enable the office department to determine whether such

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 1  society or association is exempt from the provisions of this

 2  chapter.

 3         Section 1399.  Subsection (1) of section 633.01,

 4  Florida Statutes, is amended to read:

 5         633.01  State Fire Marshal; powers and duties; rules.--

 6         (1)  The Chief Financial Officer is head of the

 7  Department of Insurance shall be designated as "State Fire

 8  Marshal."  The State Fire Marshal has authority to adopt rules

 9  pursuant to ss. 120.536(1) and 120.54 to implement the

10  provisions of this chapter conferring powers or duties upon

11  the department. Rules shall be in substantial conformity with

12  generally accepted standards of firesafety; shall take into

13  consideration the direct supervision of children in

14  nonresidential child care facilities; and shall balance and

15  temper the need of the State Fire Marshal to protect all

16  Floridians from fire hazards with the social and economic

17  inconveniences that may be caused or created by the rules. The

18  department shall adopt the Florida Fire Prevention Code and

19  the Life Safety Code.

20         Section 1400.  Subsection (1) of section 633.022,

21  Florida Statutes, is amended to read:

22         633.022  Uniform firesafety standards.--The Legislature

23  hereby determines that to protect the public health, safety,

24  and welfare it is necessary to provide for firesafety

25  standards governing the construction and utilization of

26  certain buildings and structures.  The Legislature further

27  determines that certain buildings or structures, due to their

28  specialized use or to the special characteristics of the

29  person utilizing or occupying these buildings or structures,

30  should be subject to firesafety standards reflecting these

31  special needs as may be appropriate.

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 1         (1)  The department of Insurance shall establish

 2  uniform firesafety standards that apply to:

 3         (a)  All new, existing, and proposed state-owned and

 4  state-leased buildings.

 5         (b)  All new, existing, and proposed hospitals, nursing

 6  homes, assisted living facilities, adult family-care homes,

 7  correctional facilities, public schools, transient public

 8  lodging establishments, public food service establishments,

 9  elevators, migrant labor camps, mobile home parks, lodging

10  parks, recreational vehicle parks, recreational camps,

11  residential and nonresidential child care facilities,

12  facilities for the developmentally disabled, motion picture

13  and television special effects productions, and self-service

14  gasoline stations, of which standards the State Fire Marshal

15  is the final administrative interpreting authority.

16  

17  In the event there is a dispute between the owners of the

18  buildings specified in paragraph (b) and a local authority

19  requiring a more stringent uniform firesafety standard for

20  sprinkler systems, the State Fire Marshal shall be the final

21  administrative interpreting authority and the State Fire

22  Marshal's interpretation regarding the uniform firesafety

23  standards shall be considered final agency action.

24         Section 1401.  Subsection (4) of section 633.025,

25  Florida Statutes, is amended to read:

26         633.025  Minimum firesafety standards.--

27         (4)  Such codes shall be minimum codes and a

28  municipality, county, or special district with firesafety

29  responsibilities may adopt more stringent firesafety

30  standards, subject to the requirements of this subsection.

31  Such county, municipality, or special district may establish

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 1  alternative requirements to those requirements which are

 2  required under the minimum firesafety standards on a

 3  case-by-case basis, in order to meet special situations

 4  arising from historic, geographic, or unusual conditions, if

 5  the alternative requirements result in a level of protection

 6  to life, safety, or property equal to or greater than the

 7  applicable minimum firesafety standards. For the purpose of

 8  this subsection, the term "historic" means that the building

 9  or structure is listed on the National Register of Historic

10  Places of the United States Department of the Interior.

11         (a)  The local governing body shall determine,

12  following a public hearing which has been advertised in a

13  newspaper of general circulation at least 10 days before the

14  hearing, if there is a need to strengthen the requirements of

15  the minimum firesafety code adopted by such governing body.

16  The determination must be based upon a review of local

17  conditions by the local governing body, which review

18  demonstrates that local conditions justify more stringent

19  requirements than those specified in the minimum firesafety

20  code for the protection of life and property or justify

21  requirements that meet special situations arising from

22  historic, geographic, or unusual conditions.

23         (b)  Such additional requirements shall not be

24  discriminatory as to materials, products, or construction

25  techniques of demonstrated capabilities.

26         (c)  Paragraphs (a) and (b) apply solely to the local

27  enforcing agency's adoption of requirements more stringent

28  than those specified in the Florida Fire Prevention Code and

29  the Life Safety Code that have the effect of amending building

30  construction standards. Upon request, the enforcing agency

31  shall provide a person making application for a building

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 1  permit, or any state agency or board with construction-related

 2  regulation responsibilities, a listing of all such

 3  requirements and codes.

 4         (d)  A local government which adopts amendments to the

 5  minimum firesafety code must provide a procedure by which the

 6  validity of such amendments may be challenged by any

 7  substantially affected party to test the amendment's

 8  compliance with the provisions of this section.

 9         1.  Unless the local government agrees to stay

10  enforcement of the amendment, or other good cause is shown,

11  the challenging party shall be entitled to a hearing on the

12  challenge within 45 days.

13         2.  For purposes of such challenge, the burden of proof

14  shall be on the challenging party, but the amendment shall not

15  be presumed to be valid or invalid.

16  

17  This subsection gives local government the authority to

18  establish firesafety codes that exceed the minimum firesafety

19  codes and standards adopted by the State Fire Marshal. The

20  Legislature intends that local government give proper public

21  notice and hold public hearings before adopting more stringent

22  firesafety codes and standards. A substantially affected

23  person may appeal, to the department of Insurance, the local

24  government's resolution of the challenge, and the department

25  shall determine if the amendment complies with this section.

26  Actions of the department are subject to judicial review

27  pursuant to s. 120.68.  The department shall consider reports

28  of the Florida Building Commission, pursuant to part VII of

29  chapter 553, when evaluating building code enforcement.

30         Section 1402.  Paragraph (a) of subsection (1) of

31  section 633.052, Florida Statutes, is amended to read:

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 1         633.052  Ordinances relating to firesafety;

 2  definitions; penalties.--

 3         (1)  As used in this section:

 4         (a)  A "firesafety inspector" is an individual

 5  certified by the Division of State Fire Marshal of the

 6  Department of Insurance, officially assigned the duties of

 7  conducting firesafety inspections of buildings and facilities

 8  on a recurring or regular basis, investigating civil

 9  infractions relating to firesafety, and issuing citations

10  pursuant to this section on behalf of the state or any county,

11  municipality, or special district with firesafety

12  responsibilities.

13         Section 1403.  Subsection (7) of section 633.061,

14  Florida Statutes, is amended to read:

15         633.061  Fire suppression equipment; license to install

16  or maintain.--

17         (7)  The fees collected for any such licenses and

18  permits and the filing fees for license and permit examination

19  are hereby appropriated for the use of the State Fire Marshal

20  in the administration of this chapter and shall be deposited

21  in the Insurance Commissioner's Regulatory Trust Fund.

22         Section 1404.  Subsections (4) and (7) of section

23  633.081, Florida Statutes, are amended to read:

24         633.081  Inspection of buildings and equipment; orders;

25  firesafety inspection training requirements; certification;

26  disciplinary action.--The State Fire Marshal and her or his

27  agents shall, at any reasonable hour, when the department has

28  reasonable cause to believe that a violation of this chapter

29  or s. 509.215, or a rule promulgated thereunder, or a minimum

30  firesafety code adopted by a local authority, may exist,

31  inspect any and all buildings and structures which are subject

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 1  to the requirements of this chapter or s. 509.215 and rules

 2  promulgated thereunder. The authority to inspect shall extend

 3  to all equipment, vehicles, and chemicals which are located

 4  within the premises of any such building or structure.

 5         (4)  A firefighter certified pursuant to s. 633.35 may

 6  conduct firesafety inspections, under the supervision of a

 7  certified firesafety inspector, while on duty as a member of a

 8  fire department company conducting inservice firesafety

 9  inspections without being certified as a firesafety inspector,

10  if such firefighter has satisfactorily completed an inservice

11  fire department company inspector training program of at least

12  24 hours' duration as provided by rule of the department of

13  Insurance.

14         (7)  The department of Insurance shall provide by rule

15  for the certification of firesafety inspectors.

16         Section 1405.  Section 633.111, Florida Statutes, is

17  amended to read:

18         633.111  State Fire Marshal to keep records of fires;

19  reports of agents.--The State Fire Marshal shall keep in her

20  or his office a record of all fires occurring in this state

21  upon which she or he had caused an investigation to be made

22  and all facts concerning the same. These records, obtained or

23  prepared by the State Fire Marshal pursuant to her or his

24  investigation, include documents, papers, letters, maps,

25  diagrams, tapes, photographs, films, sound recordings, and

26  evidence.  These records are confidential and exempt from the

27  provisions of s. 119.07(1) until the investigation is

28  completed or ceases to be active. For purposes of this

29  section, an investigation is considered "active" while such

30  investigation is being conducted by the department with a

31  reasonable, good faith belief that it may lead to the filing

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 1  of administrative, civil, or criminal proceedings. An

 2  investigation does not cease to be active if the department is

 3  proceeding with reasonable dispatch, and there is a good faith

 4  belief that action may be initiated by the department or other

 5  administrative or law enforcement agency. Further, these

 6  documents, papers, letters, maps, diagrams, tapes,

 7  photographs, films, sound recordings, and evidence relative to

 8  the subject of an investigation shall not be subject to

 9  subpoena until the investigation is completed or ceases to be

10  active, unless the State Fire Marshal consents. These records

11  shall be made daily from the reports furnished the State Fire

12  Marshal by her or his agents or others.  Whenever the State

13  Fire Marshal releases an investigative report, any person

14  requesting a copy of the report shall pay in advance, and the

15  State Fire Marshal shall collect in advance, notwithstanding

16  the provisions of s. 624.501(19)(a) and (b), a fee of $10 for

17  the copy of the report, which fee shall be deposited into the

18  Insurance Commissioner's Regulatory Trust Fund. The State Fire

19  Marshal may release the report without charge to any state

20  attorney or to any law enforcement agency or fire department

21  assisting in the investigation.

22         Section 1406.  Subsection (1) of section 633.161,

23  Florida Statutes, is amended to read:

24         633.161  Violations; orders to cease and desist,

25  correct hazardous conditions, preclude occupancy, or vacate;

26  enforcement; penalties.--

27         (1)  If it is determined by the department of Insurance

28  that a violation specified in this subsection exists, the

29  State Fire Marshal or her or his deputy may issue and deliver

30  to the person committing the violation an order to cease and

31  desist from such violation, to correct any hazardous

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 1  condition, to preclude occupancy of the affected building or

 2  structure, or to vacate the premises of the affected building

 3  or structure.  Such violations are:

 4         (a)  Except as set forth in paragraph (b), a violation

 5  of any provision of this chapter, of any rule adopted pursuant

 6  thereto, of any applicable uniform firesafety standard adopted

 7  pursuant to s. 633.022 which is not adequately addressed by

 8  any alternative requirements adopted on a local level, or of

 9  any minimum firesafety standard adopted pursuant to s.

10  394.879.

11         (b)  A substantial violation of an applicable minimum

12  firesafety standard adopted pursuant to s. 633.025 which is

13  not reasonably addressed by any alternative requirement

14  imposed at the local level, or an unreasonable interpretation

15  of an applicable minimum firesafety standard, and which

16  violation or interpretation clearly constitutes a danger to

17  lifesafety.

18         (c)  A building or structure which is in a dilapidated

19  condition and as a result thereof creates a danger to life,

20  safety, or property.

21         (d)  A building or structure which contains explosive

22  matter or flammable liquids or gases constituting a danger to

23  life, safety, or property.

24         Section 1407.  Subsection (5) of section 633.162,

25  Florida Statutes, is amended to read:

26         633.162  Fire suppression system contractors;

27  disciplinary action.--

28         (5)  In addition, the department of Insurance shall not

29  issue a new license or permit if it finds that the

30  circumstance or circumstances for which the license or permit

31  

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 1  was previously revoked or suspended still exist or are likely

 2  to recur.

 3         Section 1408.  Section 633.30, Florida Statutes, is

 4  amended to read:

 5         633.30  Standards for firefighting; definitions.--As

 6  used in this chapter, the term:

 7         (1)  "Firefighter" means any person initially employed

 8  as a full-time professional firefighter by any employing

 9  agency, as defined herein, whose primary responsibility is the

10  prevention and extinguishment of fires, the protection and

11  saving of life and property, and the enforcement of municipal,

12  county, and state fire prevention codes, as well as of any law

13  pertaining to the prevention and control of fires.

14         (2)  "Employing agency" means any municipality or

15  county, the state, or any political subdivision of the state,

16  including authorities and special districts, employing

17  firefighters as defined in subsection (1).

18         (3)  "Department" means the Department of Financial

19  Services Insurance.

20         (4)  "Council" means the Firefighters Employment,

21  Standards, and Training Council.

22         (5)  "Division" means the Division of State Fire

23  Marshal of the Department of Financial Services Insurance.

24         Section 1409.  Subsection (1) of section 633.31,

25  Florida Statutes, is amended to read:

26         633.31  Firefighters Employment, Standards, and

27  Training Council.--

28         (1)  There is created within the department of

29  Insurance a Firefighters Employment, Standards, and Training

30  Council of 13 members.  Two members shall be fire chiefs

31  appointed by the Florida Fire Chiefs Association, two members

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 1  shall be firefighters who are not officers, appointed by the

 2  Florida Professional Firefighters Association, two members

 3  shall be firefighter officers who are not fire chiefs,

 4  appointed by the State Fire Marshal, one member appointed by

 5  the Florida League of Cities, one member appointed by the

 6  Florida Association of Counties, one member appointed by the

 7  Florida Association of Special Districts, one member appointed

 8  by the Florida Fire Marshal's Association, and one member

 9  appointed by the State Fire Marshal, and one member shall be a

10  director or instructor of a state-certified firefighting

11  training facility appointed by the State Fire Marshal. To be

12  eligible for appointment as a fire chief member, firefighter

13  officer member, firefighter member, or a director or

14  instructor of a state-certified firefighting facility, a

15  person shall have had at least 4 years' experience in the

16  firefighting profession. The remaining member, who shall be

17  appointed by the State Fire Marshal, shall not be a member or

18  representative of the firefighting profession or of any local

19  government. Members shall serve only as long as they continue

20  to meet the criteria under which they were appointed, or

21  unless a member has failed to appear at three consecutive and

22  properly noticed meetings unless excused by the chair.

23         Section 1410.  Section 633.353, Florida Statutes, is

24  amended to read:

25         633.353  Falsification of qualifications.--Any person

26  who willfully and knowingly falsifies the qualifications of a

27  new employee to the Bureau of Fire Standards and Training of

28  the division of State Fire Marshal of the Department of

29  Insurance is guilty of a misdemeanor of the second degree,

30  punishable as provided in s. 775.082 or s. 775.083.

31  

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 1         Section 1411.  Subsection (1) of section 633.382,

 2  Florida Statutes, is amended to read:

 3         633.382  Firefighters; supplemental compensation.--

 4         (1)  DEFINITIONS.--As used in this section, the term:

 5         (a)  "Division" means the Division of State Fire

 6  Marshal of the Department of Insurance created and existing

 7  under the provisions of this chapter.

 8         (a)(b)  "Employing agency" means any municipality or

 9  any county, the state, or any political subdivision of the

10  state, including authorities and special districts employing

11  firefighters.

12         (b)(c)  "Firefighter" means any person who meets the

13  definition of the term "firefighter" in s.  633.30(1) who is

14  certified in compliance with s. 633.35 and who is employed

15  solely within the fire department of the employing agency or

16  is employed by the division.

17         Section 1412.  Section 633.43, Florida Statutes, is

18  amended to read:

19         633.43  Florida State Fire College established.--There

20  is hereby established a state institution to be known as the

21  Florida State Fire College, to be located at or near Ocala,

22  Marion County.  The institution shall be operated by the

23  Division of State Fire Marshal of the department of Insurance.

24         Section 1413.  Subsections (1), (2), (3), (7), (8),

25  (9), and (10) of section 633.445, Florida Statutes, are

26  amended to read:

27         633.445  State Fire Marshal Scholarship Grant

28  Program.--

29         (1)  All payments, gifts, or grants received pursuant

30  to this section shall be deposited in the State Treasury to

31  the credit of the Insurance Commissioner's Regulatory Trust

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 1  Fund for the State Fire Marshal Scholarship Grant Program.

 2  Such funds shall provide, from grants to the state from moneys

 3  raised from public and private sources, scholarships for

 4  qualified applicants to the Florida State Fire College as

 5  created by s. 633.43.

 6         (2)  The Chief Financial Officer Comptroller shall

 7  authorize expenditures from the Insurance Commissioner's

 8  Regulatory Trust Fund upon receipt of vouchers approved by the

 9  division State Fire Marshal.  All moneys collected from public

10  and private sources pursuant to this section shall be

11  deposited into the trust fund.  Any balance in the trust fund

12  at the end of any fiscal year shall remain therein and shall

13  be available for carrying out the purposes of the fund in the

14  ensuing year.

15         (3)  All funds deposited into the Insurance

16  Commissioner's Regulatory Trust Fund shall be invested

17  pursuant to s. 17.61 s. 18.125. Interest income accruing to

18  moneys so invested shall increase the total funds available

19  for the purposes for which the trust fund is created.

20         (7)  The criteria and procedures for establishing

21  standards of eligibility shall be recommended by the council

22  to the department of Insurance. The council shall recommend to

23  the department of Insurance a rating system upon which to base

24  the approval of scholarship grants. However, to be eligible to

25  receive a scholarship pursuant to this section, an applicant

26  must:

27         (a)  Be a full-time employee or volunteer of a local

28  municipal, county, regional or district firefighter unit;

29         (b)  Have graduated from high school, have earned an

30  equivalency diploma issued by the Department of Education

31  

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 1  pursuant to s. 1003.435, or have earned an equivalency diploma

 2  issued by the United States Armed Forces Institute;

 3         (c)  Be accepted for full-time enrollment, with the

 4  intent to maintain such enrollment at the Florida State Fire

 5  College;

 6         (d)  Have the firefighter unit by whom the applicant is

 7  employed or for which the applicant is a volunteer, recommend

 8  her or him and certify that, because of financial need, the

 9  scholarship is necessary for her or him to attend the State

10  Fire College; and

11         (e)  Agree that she or he intends to return to duty

12  with the firefighter unit by whom she or he was recommended,

13  or, by agreement with such unit, that she or he will remain in

14  some capacity relating to the firefighting profession for a

15  period of at least 1 year.

16         (8)  The department of Insurance may adopt rules to

17  implement this section, including rules detailing the

18  eligibility standards and an approval rating system which are

19  based on financial need, need for additional certified

20  firefighters from the applicant's community, and the

21  applicant's employment record.

22         (9)  After selection and approval of an applicant for a

23  grant by the council, payment in the applicant's name for

24  scholarship funds shall be transmitted from the Insurance

25  Commissioner's Regulatory Trust Fund by the Chief Financial

26  Officer Comptroller upon receipt of vouchers authorized by the

27  division State Fire Marshal.  If a recipient terminates her or

28  his enrollment during the course of her or his curriculum at

29  the State Fire College, unless excused by the council and

30  allowed to resume training at a later time, any unused portion

31  of the scholarship funds shall be refunded to the trust fund.

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 1  A recipient who terminates her or his enrollment is not liable

 2  for any portion of a scholarship.

 3         (10)  The council may accept payments, gifts, and

 4  grants of money from any federal agency, private agency,

 5  county, city, town, corporation, partnership, or individual

 6  for deposit in the Insurance Commissioner's Regulatory Trust

 7  Fund to implement this section and for authorized expenses

 8  incurred by the council in performing its duties.

 9         Section 1414.  Subsection (1) of section 633.45,

10  Florida Statutes, is amended to read:

11         633.45  Division of State Fire Marshal; powers,

12  duties.--

13         (1)  The division of State Fire Marshal of the

14  Department of Insurance shall:

15         (a)  Establish uniform minimum standards for the

16  employment and training of firefighters.

17         (b)  Establish minimum curriculum requirements for

18  schools operated by or for any employing agency for the

19  specific purpose of training firefighter recruits or

20  firefighters.

21         (c)  Approve institutions, instructors, and facilities

22  for school operation by or for any employing agency for the

23  specific purpose of training firefighters and firefighter

24  recruits.

25         (d)  Specify, by rule, standards for the approval,

26  denial of approval, probation, and revocation of approval of

27  institutions, instructors, and facilities for training

28  firefighters and firefighter recruits; including a rule that

29  an instructor must complete 40 hours of continuing education

30  every 3 years in order to maintain the approval of the

31  department.

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 1         (e)  Issue certificates of competency to persons who,

 2  by reason of experience and completion of basic inservice

 3  training, advanced education, or specialized training, are

 4  especially qualified for particular aspects or classes of

 5  firefighter duties.

 6         (f)  Establish minimum training qualifications for

 7  persons serving as firesafety coordinators for their

 8  respective departments of state government and certify all

 9  persons who satisfy such qualifications.

10         (g)  Establish a uniform lesson plan to be followed by

11  firesafety instructors in the training of state employees in

12  firesafety and emergency evacuation procedures.

13         (h)  Have complete jurisdiction over, and complete

14  management and control of, the Florida State Fire College and

15  be invested with full power and authority to make all rules

16  and regulations necessary for the governance of said

17  institution.

18         (i)  Appoint a superintendent of the Florida State Fire

19  College and such other instructors, experimental helpers, and

20  laborers as may be necessary and remove the same as in its

21  judgment and discretion may be best, fix their compensation,

22  and provide for their payment.

23         (j)  Have full management, possession, and control of

24  the lands, buildings, structures, and property belonging to

25  the Florida State Fire College.

26         (k)  Provide for the courses of study and curriculum of

27  the Florida State Fire College.

28         (l)  Make rules and regulations for the admission of

29  trainees to the Florida State Fire College.

30  

31  

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 1         (m)  Visit and inspect the Florida State Fire College

 2  and every department thereof and provide for the proper

 3  keeping of accounts and records thereof.

 4         (n)  Make and prepare all necessary budgets of

 5  expenditures for the enlargement, proper furnishing,

 6  maintenance, support, and conduct of the Florida State Fire

 7  College.

 8         (o)  Select and purchase all property, furniture,

 9  fixtures, and paraphernalia necessary for the Florida State

10  Fire College.

11         (p)  Build, construct, change, enlarge, repair, and

12  maintain any and all buildings or structures of the Florida

13  State Fire College that may at any time be necessary for said

14  institution and purchase and acquire all lands and property

15  necessary for same, of every nature and description

16  whatsoever.

17         (q)  Care for and maintain the Florida State Fire

18  College and do and perform every other matter or thing

19  requisite to the proper management, maintenance, support, and

20  control of said institution, necessary or requisite to carry

21  out fully the purpose of this act and for raising it to, and

22  maintaining it at, the proper efficiency and standard as

23  required in and by the provisions of ss. 633.43-633.49.

24         Section 1415.  Section 633.46, Florida Statutes, is

25  amended to read:

26         633.46  Fees.--The division may fix and collect

27  admission fees and other fees which it deems necessary to be

28  charged for training given. All fees so collected shall be

29  deposited in the Insurance Commissioner's Regulatory Trust

30  Fund.

31  

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 1         Section 1416.  Section 633.461, Florida Statutes, is

 2  amended to read:

 3         633.461  Use of Insurance Commissioner's Regulatory

 4  Trust Fund.--The funds received from the Insurance

 5  Commissioner's Regulatory Trust Fund shall be used by the

 6  staff of the Florida State Fire College to provide all

 7  necessary services, training, equipment, and supplies to carry

 8  out the college's responsibilities, including, but not limited

 9  to, the State Fire Marshal Scholarship Grant Program and the

10  procurement of training films, videotapes, audiovisual

11  equipment, and other useful information on fire, firefighting,

12  and fire prevention, including public fire service information

13  packages.

14         Section 1417.  Section 633.47, Florida Statutes, is

15  amended to read:

16         633.47  Procedure for making expenditures.--No moneys

17  shall be spent for and on behalf of the Florida State Fire

18  College except upon a written voucher drawn by the division,

19  stating the nature of the expenditures and the person to whom

20  the same shall be made payable, which voucher shall be

21  submitted to the Chief Financial Officer Comptroller and

22  audited for approval by her or him; upon such approval, the

23  Chief Financial Officer Comptroller shall draw a warrant upon

24  the Treasurer for the payment thereof, filing the original

25  voucher in her or his office.

26         Section 1418.  Section 633.50, Florida Statutes, is

27  amended to read:

28         633.50  Division powers and duties; Florida State Fire

29  College.--

30         (1)  The division of State Fire Marshal of the

31  Department of Insurance, in performing its duties related to

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 1  the Florida State Fire College, specified in ss.

 2  633.43-633.49, shall:

 3         (a)  Enter into agreements with public or private

 4  school districts, community colleges, junior colleges, or

 5  universities to carry out its duties and responsibilities.

 6         (b)  Review and approve budget requests for the fire

 7  college educational program.

 8         (c)  Prepare the legislative budget request for the

 9  Florida State Fire College education program.  The

10  superintendent is responsible for all expenditures pursuant to

11  appropriations.

12         (d)  Implement procedures to obtain appropriate

13  entitlement funds from federal and state grants to supplement

14  the annual legislative appropriation. Such funds must be used

15  expressly for the fire college educational programs.

16         (e)  Develop a staffing and funding formula for the

17  Florida State Fire College.  The formula shall include

18  differential funding levels for various types of programs,

19  shall be based on the number of full-time equivalent students

20  and information obtained from scheduled attendance counts

21  taken the first day of each program, and shall provide the

22  basis for the legislative budget request.  As used in this

23  section, a full-time equivalent student is equal to a minimum

24  of 900 hours in a technical certificate program and 400 hours

25  in a degree-seeking program.  The funding formula shall be as

26  prescribed pursuant to s. 1011.62, shall include procedures to

27  document daily attendance, and shall require that attendance

28  records be retained for audit purposes.

29         (2)  Funds generated by the formula per full-time

30  equivalent student may not exceed the level of state funding

31  per full-time equivalent student generated through the Florida

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 1  Education Finance Program or the State Community College

 2  Program Fund for students enrolled in comparable education

 3  programs provided by public school districts and community

 4  colleges.  Funds appropriated for education and operational

 5  costs shall be deposited in the Insurance Commissioner's

 6  Regulatory Trust Fund to be used solely for purposes specified

 7  in s. 633.461 and may not be transferred to any other budget

 8  entity for purposes other than education.

 9         Section 1419.  Subsection (2) of section 633.524,

10  Florida Statutes, is amended to read:

11         633.524  Certificate fees; use and deposit of collected

12  funds.--

13         (2)  All moneys collected by the State Fire Marshal

14  pursuant to this chapter are hereby appropriated for the use

15  of the State Fire Marshal in the administration of this

16  chapter and shall be deposited in the Insurance Commissioner's

17  Regulatory Trust Fund.

18         Section 1420.  Section 633.802, Florida Statutes, is

19  amended to read:

20         633.802  Definitions.--Unless the context clearly

21  requires otherwise, the following definitions shall apply to

22  ss. 633.801-633.821:

23         (1)  "Department" means the Department of Insurance.

24         (2)  "Division" means the Division of State Fire

25  Marshal of the department.

26         (1)(3)  "Firefighter employee" means any person engaged

27  in any employment, public or private, as a firefighter under

28  any appointment or contract of hire or apprenticeship, express

29  or implied, oral or written, whether lawfully or unlawfully

30  employed, responding to or assisting with fire or medical

31  

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 1  emergencies, whether or not the firefighter is on duty, except

 2  those appointed under s. 590.02(1)(d).

 3         (2)(4)  "Firefighter employer" means the state and all

 4  political subdivisions of this state, all public and

 5  quasi-public corporations in this state, and every person

 6  carrying on any employment for this state, political

 7  subdivisions of this state, and public and quasi-public

 8  corporations in this state which employs firefighters, except

 9  those appointed under s. 590.02(1)(d).

10         (3)(5)  "Firefighter employment" or "employment" means

11  any service performed by a firefighter employee for the

12  firefighter employer.

13         (4)(6)  "Firefighter place of employment" or "place of

14  employment" means the physical location at which the

15  firefighter is employed.

16         Section 1421.  Section 633.811, Florida Statutes, is

17  amended to read:

18         633.811  Firefighter employer penalties.--If any

19  firefighter employer violates or fails or refuses to comply

20  with ss. 633.801-633.821, or with any rule adopted by the

21  division under such sections in accordance with chapter 120

22  for the prevention of injuries, accidents, or occupational

23  diseases or with any lawful order of the division in

24  connection with ss. 633.801-633.821, or fails or refuses to

25  furnish or adopt any safety device, safeguard, or other means

26  of protection prescribed by division rule under ss.

27  633.801-633.821 for the prevention of accidents or

28  occupational diseases, the division may assess against the

29  firefighter employer a civil penalty of not less than $100 nor

30  more than $5,000 for each day the violation, omission,

31  failure, or refusal continues after the firefighter employer

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 1  has been given written notice of such violation, omission,

 2  failure, or refusal.  The total penalty for each violation

 3  shall not exceed $50,000.  The division shall adopt rules

 4  requiring penalties commensurate with the frequency or

 5  severity of safety violations.  A hearing shall be held in the

 6  county in which the violation, omission, failure, or refusal

 7  is alleged to have occurred, unless otherwise agreed to by the

 8  firefighter employer and authorized by the division.  All

 9  penalties assessed and collected under this section shall be

10  deposited in the Insurance Commissioner's Regulatory Trust

11  Fund.

12         Section 1422.  Section 633.814, Florida Statutes, is

13  amended to read:

14         633.814  Expenses of administration.--The amounts that

15  are needed to administer ss. 633.801-633.821 shall be

16  disbursed from the Insurance Commissioner's Regulatory Trust

17  Fund.

18         Section 1423.  Section 634.011, Florida Statutes, is

19  amended to read:

20         634.011  Definitions.--As used in this part, the term:

21         (1)  "Acquisition cost" means all costs specifically

22  associated with acquiring new business, including, but not

23  limited to, underwriting costs, commissions, contingent fees,

24  and cost of sales material.

25         (2)  "Additive product" means any fuel supplement, oil

26  supplement, or any other supplement product added to a motor

27  vehicle for the purpose of increasing or enhancing the

28  performance or improving the longevity of such motor vehicle.

29         (3)  "Affiliate" means any entity which exercises

30  control over or is controlled by the motor vehicle service

31  agreement company or insurer, directly or indirectly, through:

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 1         (a)  Equity ownership of voting securities;

 2         (b)  Common managerial control; or

 3         (c)  Collusive participation by the management of the

 4  motor vehicle service agreement company or insurer and

 5  affiliate in the management of the motor vehicle service

 6  agreement company or insurer or the affiliate.

 7         (4)  "Department" means the Department of Insurance.

 8         (4)(5)  "Gross premium written" means the total amount

 9  of premiums paid by the agreement holder, inclusive of

10  commissions, for those agreements which are in force.

11         (5)(6)  "Insurer" means any property or casualty

12  insurer duly authorized to transact such business in this

13  state.

14         (6)(7)  "Motor vehicle" means:

15         (a)  A self-propelled device operated solely or

16  primarily upon roadways to transport people or property, or

17  the component part of such a self-propelled device, except

18  such term does not include any self-propelled vehicle, or

19  component part of such vehicle, which:

20         1.  Has a gross vehicle weight rating of 10,000 pounds

21  or more, and is not a recreational vehicle as defined by s.

22  320.01(1)(b);

23         2.  Is designed to transport more than 10 passengers,

24  including the driver; or

25         3.  Is used in the transportation of materials found to

26  be hazardous for the purposes of the Hazardous Materials

27  Transportation Act, as amended, 49 U.S.C. ss. 1801 et seq.; or

28         (b)  A self-propelled device operated solely or

29  primarily upon water for noncommercial, personal use, the

30  engine of such a vehicle, or a trailer or other device used to

31  transport such vehicle or device.

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 1         (7)(8)  "Motor vehicle service agreement" or "service

 2  agreement" means any contract or agreement indemnifying the

 3  service agreement holder for the motor vehicle listed on the

 4  service agreement and arising out of the ownership, operation,

 5  and use of the motor vehicle against loss caused by failure of

 6  any mechanical or other component part, or any mechanical or

 7  other component part that does not function as it was

 8  originally intended; however, nothing in this part shall

 9  prohibit or affect the giving, free of charge, of the usual

10  performance guarantees by manufacturers or dealers in

11  connection with the sale of motor vehicles. Transactions

12  exempt under s. 624.125 are expressly excluded from this

13  definition and are exempt from the provisions of this part.

14  The term "motor vehicle service agreement" includes any

15  contract or agreement that provides:

16         (a)  For the coverage or protection defined in this

17  subsection and which is issued or provided in conjunction with

18  an additive product applied to the motor vehicle that is the

19  subject of such contract or agreement; or

20         (b)  For payment of vehicle protection expenses.

21         1.a.  "Vehicle protection expenses" means expenses

22  incurred by the service agreement holder for loss or damage to

23  a covered vehicle, including, but not limited to, applicable

24  deductibles under a motor vehicle insurance policy; temporary

25  vehicle rental expenses; expenses for a replacement vehicle

26  that is at least the same year, make, and model of the stolen

27  motor vehicle; sales taxes or registration fees for a

28  replacement vehicle that is at least the same year, make, and

29  model of the stolen vehicle; or other incidental expenses

30  specified in the agreement.

31  

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 1         b.  "Vehicle protection product" means a product or

 2  system installed or applied to a motor vehicle or designed to

 3  prevent the theft of the motor vehicle or assist in the

 4  recovery of the stolen motor vehicle.

 5         2.  Vehicle protection expenses shall be payable in the

 6  event of loss or damage to the vehicle as a result of the

 7  failure of the vehicle protection product to prevent the theft

 8  of the motor vehicle or to assist in the recovery of the

 9  stolen motor vehicle.  Vehicle protection expenses covered

10  under the agreement shall be clearly stated in the service

11  agreement form.

12         3.  Motor vehicle service agreements providing for the

13  payment of vehicle protection expenses shall:

14         a.  Reimburse a service agreement holder for the

15  following expenses, at a minimum:  deductibles applicable to

16  comprehensive coverage under the service agreement holder's

17  motor vehicle insurance policy; temporary vehicle rental

18  expenses; sales taxes and registration fees on a replacement

19  vehicle that is at least the same year, make, and model of the

20  stolen motor vehicle; and the difference between the benefits

21  paid to the service agreement holder for the stolen vehicle

22  under the service agreement holder's comprehensive coverage

23  and the actual cost of a replacement vehicle that is at least

24  the same year, make, and model of the stolen motor vehicle; or

25         b.  Pay a preestablished flat amount to the service

26  agreement holder.

27  

28  Payments shall not duplicate any benefits or expenses paid to

29  the service agreement holder by the insurer providing

30  comprehensive coverage under a motor vehicle insurance policy

31  covering the stolen motor vehicle.

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 1         (8)(9)  "Motor vehicle service agreement company" or

 2  "service agreement company" means any corporation, sole

 3  proprietorship, or partnership (other than an authorized

 4  insurer) issuing motor vehicle service agreements.

 5         (9)(10)  "Net assets" means the amount by which the

 6  total statutory assets exceed total liability, except that

 7  assets pledged to secure debts not reflected on the books of

 8  the service agreement company shall not be included in net

 9  assets.

10         (10)(11)  "Person" shall have the same meaning as

11  defined in s. 624.04.

12         (11)(12)  "Premium" means the total amount paid by the

13  agreement holder. No "assessment" or any "membership fee,"

14  "policy fee," "survey fee," "inspection fee," "service fee,"

15  "finance fee," or similar fee shall be charged by the service

16  agreement company.

17         (12)(13)  "Rate" means the unit charge by which the

18  measure of exposure in a service agreement is multiplied to

19  determine the premium.

20         (13)(14)  "Salesperson" means any dealership,

21  corporation, partnership, or sole proprietorship employed or

22  otherwise retained by an insurer or motor vehicle service

23  agreement company for the purpose of selling or issuing motor

24  vehicle service agreements or for the purpose of soliciting or

25  retaining other salespersons.

26         (14)(15)  "Unearned premium" means that portion of the

27  gross written premium which has not been earned on a straight

28  pro rata basis.

29         (15)(16)  "Unearned premium reserve" means unencumbered

30  assets equal to 50 percent of the unearned premium.

31  

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 1         (16)(17)  "Unearned gross written premium" means that

 2  portion of the gross written premium which has not been

 3  amortized or earned on a pro rata basis.

 4         Section 1424.  Section 634.021, Florida Statutes, is

 5  amended to read:

 6         634.021  Powers of department, commission, and office;

 7  rules.--The office department shall administer this act and

 8  the commission may to that end it has authority to adopt rules

 9  pursuant to ss. 120.536(1) and 120.54 to implement the

10  provisions of this act related to motor vehicle agreement

11  companies and motor vehicle service agreements. The department

12  shall administer this act and may adopt rules pursuant to ss.

13  120.536(1) and 120.54 to implement provisions of this act

14  related to sales representatives.

15         Section 1425.  Section 634.031, Florida Statutes, is

16  amended to read:

17         634.031  License required.--

18         (1)  A person may not transact, administer, or market,

19  attempt to transact, administer, or market, or in any manner

20  hold itself out as transacting, administering, or marketing

21  the service agreement business, on behalf of herself or

22  himself or itself, in this state or from this state unless it

23  is authorized to do so under a subsisting license issued to it

24  by the office department. The company shall pay to the office

25  department an annual nonrefundable license fee for the

26  license.

27         (2)  No person shall, from offices or by personnel or

28  facilities in this state, solicit applications or otherwise

29  transact service agreement sales in another state or country

30  unless it holds a subsisting license issued to it by the

31  

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 1  office department authorizing it to transact the same kind or

 2  kinds of service agreement business in this state.

 3         (3)  No person shall transact, administer, or market

 4  service agreements unless it holds a subsisting license issued

 5  by the office department authorizing it to transact the same

 6  kind or kinds of service agreement business in this state.

 7         (4)  The office department may, pursuant to s. 120.569,

 8  in its discretion and without advance notice or hearing issue

 9  an immediate final order to cease and desist to any person or

10  entity which violates this section. The Legislature finds that

11  a violation of this section constitutes an imminent and

12  immediate threat to the public health, safety, and welfare of

13  the residents of this state.

14         Section 1426.  Section 634.041, Florida Statutes, is

15  amended to read:

16         634.041  Qualifications for license.--To qualify for

17  and hold a license to issue service agreements in this state,

18  a service agreement company must be in compliance with this

19  part, with applicable rules of the commission department, with

20  related sections of the Florida Insurance Code, and with its

21  charter powers and must comply with the following:

22         (1)  Any service agreement company applying for a

23  license must be a solvent corporation formed under the laws of

24  this state or of another state or district of the United

25  States and must meet minimum requirements under this section.

26         (2)  The service agreement company must furnish the

27  office department with evidence satisfactory to the office

28  department that the management of the company is competent and

29  trustworthy and can successfully and lawfully manage its

30  affairs.

31  

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 1         (3)  The service agreement company must make the

 2  deposit required under s. 634.052.

 3         (4)  A service agreement company may not be licensed to

 4  transact service agreement business in this state unless it

 5  maintains the required reserves and the required ratio of

 6  liquid assets to the required reserves.

 7         (5)  A service agreement company may not be licensed to

 8  transact service agreement business in this state if, during

 9  the 3 years immediately preceding its application for a

10  license, it has violated any requirement of this part or a

11  rule adopted thereunder.

12         (6)  In order to obtain or maintain a license, a

13  service agreement company must have and maintain minimum net

14  assets of $500,000.  However, a service agreement company that

15  maintains a gross written premium of less than $750,000 at all

16  times, that has been licensed in Florida for more than 5

17  years, and that has never had an administrative complaint

18  filed by the office department against its operations under

19  this part may reach this net asset requirement in equal

20  increments over a 5-year period beginning on October 1, 1991.

21         (7)  All assets used to maintain the minimum net asset

22  requirement must be maintained in the United States.

23         (8)(a)  A service agreement company must establish and

24  maintain an unearned premium reserve in accordance with the

25  following:

26         1.  It must consist of unencumbered assets equal to a

27  minimum of 50 percent of the unearned gross written premium on

28  each service agreement and must amortize this reserve pro rata

29  over the duration of the service agreement.  Such assets must

30  be held in the form of cash or invested in securities for

31  investment under ss. 625.301-625.340.

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 1         2.  In addition to the net asset requirements set forth

 2  in subsection (6), a company utilizing the 50-percent reserve

 3  must not allow its ratio of gross written premium in force to

 4  net assets to exceed 10 to 1.  For companies that have

 5  utilized both contractual liability insurance and the

 6  50-percent reserve, this ratio must be calculated based only

 7  on that portion of gross written premium in force which is

 8  covered by the 50-percent reserve.

 9         3.  A company that uses an unearned premium reserve

10  must deposit with the department securities of the type

11  eligible for deposit by insurers under s. 625.52 equal to 15

12  percent of the unearned premium reserve.  This reserve deposit

13  may be included as an asset for calculating the requirement of

14  subparagraph 1.  A request for release of the reserve deposit

15  may be made quarterly only after the office department has

16  approved the company's current quarterly or annual financial

17  statement and a statement sworn to by two officers of the

18  company, verifying that the release will not reduce the

19  reserve deposit to less than 15 percent of the unearned

20  premium reserve.

21         (b)  A service agreement company does not have to

22  establish and maintain an unearned premium reserve if it

23  purchases and maintains contractual liability insurance in

24  accordance with the following:

25         1.  The insurance covers 100 percent of its claim

26  exposure and is obtained from an insurer approved by the

27  office department which holds a certificate of authority to do

28  business within this state.

29         2.  If the service agreement company does not meet its

30  contractual obligations, the contractual liability insurance

31  policy binds its issuer to pay or cause to be paid to the

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 1  service agreement holder all legitimate claims and

 2  cancellation refunds for all service agreements issued by the

 3  service agreement company while the policy was in effect.

 4  This requirement also applies to those service agreements for

 5  which no premium has been remitted to the insurer.

 6         3.  If the issuer of the contractual liability policy

 7  is fulfilling the service agreements covered by the

 8  contractual liability policy and the service agreement holder

 9  cancels the service agreement, the issuer must make a full

10  refund of unearned premium to the consumer, subject to the

11  cancellation fee provisions of s. 634.121(5).  The sales

12  representative and agent must refund to the contractual

13  liability policy issuer their unearned pro rata commission.

14         4.  The policy may not be canceled, terminated, or

15  nonrenewed by the insurer or the service agreement company

16  unless a 90-day written notice thereof has been given to the

17  office department by the insurer before the date of the

18  cancellation, termination, or nonrenewal.

19         5.  The service agreement company must provide the

20  office department with the claims statistics.

21  

22  All funds or premiums remitted to an insurer by a motor

23  vehicle service agreement company under this part shall remain

24  in the care, custody, and control of the insurer and shall be

25  counted as an asset of the insurer; provided, however, this

26  requirement does not apply when the insurer and the motor

27  vehicle service agreement company are affiliated companies and

28  members of an insurance holding company system. If the motor

29  vehicle service agreement company chooses to comply with this

30  paragraph but also maintains a reserve to pay claims, such

31  reserve shall only be considered an asset of the covered motor

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 1  vehicle service agreement company and may not be

 2  simultaneously counted as an asset of any other entity.

 3         (9)  In meeting the requirements of this part, a

 4  service agreement company may not utilize both the 50-percent

 5  reserve and contractual liability insurance simultaneously.

 6  However, a company may have contractual liability coverage on

 7  service agreements previously sold and sell new service

 8  agreements covered by the 50-percent reserve, and the converse

 9  of this is also allowed. A service agreement company must be

10  able to distinguish how each individual service agreement is

11  covered.

12         (10)  In addition to information called for and

13  furnished with its annual statement, a service agreement

14  company must furnish to the office department, as soon as

15  reasonably possible, any information as to its transactions or

16  affairs that the office department requests in writing.  All

17  information furnished pursuant to the request of the office

18  department must be verified by the oath of two executive

19  officers of the service agreement company.

20         (11)  A service agreement company offering service

21  agreements providing vehicle protection expenses may meet the

22  requirements for this part only by maintaining contractual

23  liability insurance in accordance with paragraph (8)(b), which

24  insurance must be issued by an insurance company not

25  affiliated with the service agreement company, unless the

26  insurance company had issued a contractual liability insurance

27  policy to a service agreement company on or before January 1,

28  2002.  Service agreements providing vehicle protection

29  expenses may be sold only to a service agreement holder that

30  has in-force comprehensive motor vehicle insurance coverage

31  for the vehicle to be covered by the service agreement.

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 1         Section 1427.  Section 634.044, Florida Statutes, is

 2  amended to read:

 3         634.044  Assets and liabilities.--

 4         (1)  ASSETS.--In any determination of the financial

 5  condition of a service agreement company, there shall be

 6  allowed as assets only those assets that are owned by the

 7  service agreement company and which assets consist of:

 8         (a)  Cash in the possession of the service agreement

 9  company, or in transit under its control, including the true

10  balance of any deposit in a solvent bank, savings and loan

11  association, or trust company which is domiciled in the United

12  States.

13         (b)  Investments, securities, properties, and loans

14  acquired or held in accordance with this part, and in

15  connection therewith the following items:

16         1.  Interest due or accrued on any bond or evidence of

17  indebtedness which is not in default and which is not valued

18  on a basis including accrued interest.

19         2.  Declared and unpaid dividends on stock and shares,

20  unless the amount of the dividends has otherwise been allowed

21  as an asset.

22         3.  Interest due or accrued upon a collateral loan

23  which is not in default in an amount not to exceed 1 year's

24  interest thereon.

25         4.  Interest due or accrued on deposits or certificates

26  of deposit in solvent banks, savings and loan associations,

27  and trust companies domiciled in the United States, and

28  interest due or accrued on other assets, if such interest is

29  in the judgment of the office department a collectible asset.

30         5.  Interest due or accrued on current mortgage loans,

31  in an amount not exceeding in any event the amount, if any, of

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 1  the excess of the value of the property less delinquent taxes

 2  thereon over the unpaid principal; but in the property less

 3  delinquent taxes thereon over the unpaid principal; but in no

 4  event shall interest accrued for a period in excess of 90 days

 5  be allowed as an asset.

 6         6.  Rent due or accrued on real property if such rent

 7  is not in arrears for more than 3 months.  However, in no

 8  event shall rent accrued for a period in excess of 90 days be

 9  allowed as an asset.

10         7.  The unaccrued portion of taxes paid prior to the

11  due date on real property.

12         (c)  Furniture, fixtures, furnishings, vehicles, and

13  equipment, if the original cost of each item is at least $200,

14  which cost shall be amortized in full over a period not to

15  exceed 5 calendar years, unless otherwise approved by the

16  office department.

17         (d)  Part inventories maintained for the purpose of

18  servicing products warranted. Part inventories must be listed

19  at cost. Service agreement companies are required to maintain

20  records to support valuation of part inventories.

21         (e)  The liquidation value of prepaid expenses.

22         (f)  Other assets or receivables, not inconsistent with

23  the provisions of this section, deemed by the office

24  department to be available for the payment of losses and

25  claims, at values to be determined by the office department.

26  

27  The office department, upon determining that a service

28  agreement company's asset has not been evaluated according to

29  applicable law or that it does not qualify as an asset, shall

30  require the service agreement company to properly reevaluate

31  the asset or replace the asset with an asset suitable to the

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 1  office department within 30 days of written notification by

 2  the office department of this determination, if the removal of

 3  the asset from the organization's assets would impair the

 4  company's solvency.

 5         (2)  ASSETS NOT ALLOWED.--In addition to assets

 6  impliedly excluded by the provisions of subsection (1), the

 7  following assets expressly shall not be allowed as assets in

 8  any determination of the financial condition of a service

 9  agreement company:

10         (a)  Goodwill, agreement holder lists, patents, trade

11  names, agreements not to compete, and other like intangible

12  assets.

13         (b)  Any note or account receivable from or advances to

14  officers, directors, or controlling stockholders, whether

15  secured or not, and advances to employees, agents, or other

16  persons on personal security only.

17         (c)  Stock of the service agreement company owned by it

18  directly or owned by it through any entity in which the

19  organization owns or controls, directly or indirectly, more

20  than 25 percent of the ownership interest.

21         (d)  Leasehold improvements, stationery, and

22  literature, except that leasehold improvements made prior to

23  October 1, 1991, shall be allowed as an asset and shall be

24  amortized over the shortest of the following periods:

25         1.  The life of the lease.

26         2.  The useful life of the improvements.

27         3.  The 3-year period following October 1, 1991.

28         (e)  Furniture, fixtures, furnishings, vehicles, and

29  equipment, other than those items authorized under paragraph

30  (1)(c).

31  

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 1         (f)  Notes or other evidences of indebtedness which are

 2  secured by mortgages or deeds of trust which are in default

 3  and beyond the express period specified in the instrument for

 4  curing the default.

 5         (g)  Bonds in default for more than 60 days.

 6         (h)  Deferred costs other than the liquidation value of

 7  prepaid expenses except for those companies that reserve 100

 8  percent of gross written premium.

 9         (i)  Any note, account receivable, advance, or other

10  evidence of indebtedness, or investment in:

11         1.  The parent of the service agreement company;

12         2.  Any entity directly or indirectly controlled by the

13  service agreement company parent;

14         3.  An affiliate of the parent or the service agreement

15  company; however, receivables from the parent or affiliated

16  companies shall be considered an admitted asset of the company

17  when the office department is satisfied that the repayment of

18  receivables, loans, and advances from the parent or the

19  affiliated company are guaranteed by an organization in

20  accordance with s. 634.045; or

21         4.  Officers, directors, shareholders, employees, or

22  salespersons of the service agreement company; however,

23  premium receivables under 45 days old may be considered an

24  admitted asset.

25  

26  The office department may, however, allow all or a portion of

27  such asset, at values to be determined by the office

28  department, if deemed by the office department to be available

29  for the payment of losses and claims.

30         (3)  LIABILITIES.--In any determination of the

31  financial condition of a service agreement company,

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 1  liabilities to be charged against its assets shall include,

 2  but not be limited to:

 3         (a)  The amount, in conformity with generally accepted

 4  accounting principles, necessary to pay all of its unpaid

 5  losses and claims incurred for or on behalf of an agreement

 6  holder, on or prior to the end of the reporting period,

 7  whether reported or unreported.

 8         (b)  Taxes, expenses, and other obligations due or

 9  accrued at the date of the statement.

10         (c)  Reserve for unearned premiums.

11  

12  The office department, upon determining that the service

13  agreement company has failed to report liabilities that should

14  have been reported, shall require a correct report which

15  reflects the proper liabilities to be submitted by the service

16  agreement company to the office department within 10 working

17  days of receipt of written notification.

18         Section 1428.  Subsections (2) and (4) of section

19  634.045, Florida Statutes, are amended to read:

20         634.045  Guarantee agreements.--In order to include

21  receivables from affiliated companies as assets under s.

22  634.041, the motor vehicle service agreement company shall

23  provide a written guarantee to assure repayment of all

24  receivables, loans, and advances from affiliated companies,

25  provided that the written guarantee is made by a guaranteeing

26  organization which:

27         (2)  Submits a guarantee that is approved by the office

28  department as meeting the requirements of this part, provided

29  that the written guarantee contains a provision which requires

30  that the guarantee be irrevocable unless the guaranteeing

31  organization can demonstrate to the office department that the

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 1  cancellation of the guarantee will not result in the net

 2  assets of the motor vehicle service agreement company falling

 3  below its minimum net asset requirement and the office

 4  department approves cancellation of the guarantee.

 5         (4)  Submits annually, within 3 months after the end of

 6  its fiscal year, an audited financial statement certified by

 7  an independent certified public accountant, prepared in

 8  accordance with generally accepted accounting principles.  The

 9  office department may, as it deems necessary, require

10  quarterly financial statements from the guaranteeing

11  organization.

12         Section 1429.  Section 634.052, Florida Statutes, is

13  amended to read:

14         634.052  Required deposit.--

15         (1)  To assure the faithful performance of its

16  obligations to its members or subscribers, each motor vehicle

17  service agreement company shall, prior to issuance of its

18  license by the office department, deposit with the department

19  securities of the type eligible for deposit by insurers under

20  s. 625.52 and having at all times a market value of not less

21  than $200,000; however, service agreement companies

22  maintaining an unearned gross written premium of less than

23  $750,000 shall have on deposit with the department $100,000.

24  After 1 year from the date of initial licensure, a service

25  agreement company may file a request for the release of a

26  portion of the deposit and thereafter requests may be made

27  quarterly.  A request may be granted only after the office

28  department has received and approved the company's current

29  quarterly or annual financial statement.  However, at no time

30  shall the deposit be less than $100,000.

31  

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 1         (2)  In addition to the deposits otherwise required

 2  pursuant to this section, the office department may, after

 3  notice and hearing, require any company for good cause shown

 4  to deposit and maintain deposited in trust for the protection

 5  of the contract holders and creditors of the company, for such

 6  time as the office department deems necessary, securities

 7  eligible for such deposit under s. 625.52 having a value of

 8  not less than the amount which the office department

 9  determines is necessary, which amount shall be neither less

10  than $100,000, nor more than $500,000, depending on the

11  obligation of the company in this state.

12         (3)  The state shall be responsible for the safekeeping

13  of all securities deposited with the department under this

14  act. Such securities shall not, on account of being in this

15  state, be subject to taxation, but shall be held exclusively

16  and solely to guarantee the faithful performance by the

17  company of its obligations to its members or subscribers.

18         (4)  The depositing company shall, during its solvency,

19  have the right to exchange or substitute other securities of

20  like quality and value for securities so on deposit, to

21  receive the interest and other income accruing on such

22  securities, and to inspect the deposit at all reasonable

23  times.

24         (5)  Such deposit shall be maintained unimpaired as

25  long as the company continues in business or from offices in

26  this state.  Whenever the company ceases to do business in or

27  from offices in this state and furnishes to the office

28  department proof satisfactory to it that it has discharged or

29  otherwise adequately provided for all its obligations to its

30  members or subscribers in this state, the office and

31  department shall release the deposited securities to the

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 1  parties entitled thereto, on presentation of the receipts of

 2  the department for such securities.

 3         Section 1430.  Section 634.053, Florida Statutes, is

 4  amended to read:

 5         634.053  Levy upon deposit limited.--A judgment

 6  creditor or other claimant of a motor vehicle service

 7  agreement company does not have the right to levy upon any of

 8  the assets or securities held in this state as a deposit under

 9  s. 634.052. However, to pay any unpaid obligation to this

10  state, the office department may levy upon any of the assets

11  of a motor vehicle service agreement company found to be

12  insolvent or found to be bankrupt by any court.

13         Section 1431.  Subsections (1), (2), and (4) of section

14  634.061, Florida Statutes, are amended to read:

15         634.061  Application for and issuance of license.--

16         (1)  A sworn application for a license as a motor

17  vehicle service agreement company shall be made to and filed

18  with the office department on forms as prescribed by the

19  commission and furnished by the office it.

20         (2)  In addition to information relative to its

21  qualifications as called for under s. 634.041, the application

22  shall show:

23         (a)  The location of the applicant's home office.

24         (b)  The name and residence address of each director,

25  officer, and 10-percent or greater stockholder of the

26  applicant.

27         (c)  Other pertinent information as required by the

28  commission or office department.

29         (4)  Upon completion of the application for license,

30  the office department shall examine the same and make such

31  further investigation of the applicant as it deems advisable.

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 1  If it finds that the applicant is qualified therefor under

 2  this part, it shall issue to the applicant a license as a

 3  motor vehicle service agreement company.  If the office

 4  department does not so find, it shall refuse to issue the

 5  license.

 6         Section 1432.  Subsections (1), (2), (3), and (5) of

 7  section 634.081, Florida Statutes, are amended to read:

 8         634.081  Suspension or revocation of license;

 9  grounds.--

10         (1)  The office department may, in its discretion,

11  suspend or revoke the license of any motor vehicle service

12  agreement company if it finds that the company has violated

13  any lawful order of the office department or any provision of

14  this part.

15         (2)  The office department shall suspend or revoke the

16  license of a motor vehicle service agreement company if it

17  finds that the company:

18         (a)  Is impaired or insolvent as defined in s. 631.011

19  or in unsound condition, or in a condition, or using methods

20  and practices in the conduct of its business, as to render its

21  further transaction of service agreements in this state

22  hazardous or injurious to its service agreement holders or to

23  the public.

24         (b)  Has refused to be examined or to produce its

25  accounts, records, and files for examination, or if any of its

26  officers have refused to give information with respect to its

27  affairs or to perform any other legal obligation as to the

28  examination, when required by the office department.

29         (c)  Has failed to pay any fees, taxes, or other

30  assessments within 90 days after their due date.

31  

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 1         (d)  Has failed to pay any final judgment rendered

 2  against it in this state within 90 days after the judgment

 3  became final.

 4         (e)  With a frequency as to indicate its general

 5  business practice in this state, has without just cause

 6  refused to pay proper claims arising under its service

 7  agreements, or without just cause compels service agreement

 8  holders to accept less than the amount due them or to employ

 9  attorneys or to bring suit against the service agreement

10  company to secure full payment or settlement of proper claims.

11         (f)  Is affiliated with, or under the same general

12  management or interlocking directorate or ownership of,

13  another motor vehicle service agreement company or person who

14  transacts service agreements in or from this state without a

15  subsisting license.

16         (g)  Fails to affirm or deny coverage of a claim upon

17  written request of the agreement holder within a reasonable

18  time after notification of the claim.

19         (h)  Fails to promptly provide a reasonable explanation

20  in writing if requested by the agreement holder of the basis

21  in the service agreement in relation to the facts or

22  applicable law for denial of a claim or for the offer of a

23  compromise settlement.

24         (3)  The office department may, in its discretion,

25  suspend the license of any motor vehicle service agreement

26  company as to which a proceeding for receivership,

27  conservatorship, or rehabilitation or other delinquency

28  proceeding has been commenced against it or its affiliate in

29  any state.

30         (5)  The office department shall suspend or revoke the

31  license of a company if it finds that the ratio of gross

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 1  written premiums written to net assets exceeds 10 to 1 unless

 2  the company has in excess of $750,000 in net assets and is

 3  utilizing contractual liability insurance which cedes 100

 4  percent of the service agreement company's claims liabilities

 5  to the contractual liability insurer or is utilizing

 6  contractual liability insurance which reimburses the service

 7  agreement company for 100 percent of its paid claims.

 8  However, if a service agreement company has been licensed by

 9  the office department in excess of 10 years, is in compliance

10  with all applicable provisions of this part, and has net

11  assets at all times in excess of $3 million that comply with

12  the provisions of part II of chapter 625, such company may not

13  exceed a ratio of gross written premiums written to net assets

14  of 15 to 1.

15         Section 1433.  Paragraph (b) of subsection (3) of

16  section 634.095, Florida Statutes, is amended to read:

17         634.095  Prohibited acts.--Any service agreement

18  company or salesperson that engages in one or more of the

19  following acts is, in addition to any applicable denial,

20  suspension, revocation, or refusal to renew or continue any

21  appointment or license, guilty of a misdemeanor of the second

22  degree, punishable as provided in s. 775.082 or s. 775.083:

23         (3)  Issuing or causing to be issued any advertisement

24  which:

25         (b)  In any respect is in violation of or does not

26  comply with this part, applicable provisions of the Florida

27  Insurance Code, or applicable rule of the commission

28  department.

29         Section 1434.  Section 634.101, Florida Statutes, is

30  amended to read:

31  

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 1         634.101  Order, notice of suspension or revocation of

 2  license; effect; publication.--

 3         (1)  Suspension or revocation of the license of a

 4  company shall be by the order of the office department mailed

 5  to the company by registered or certified mail.  The office

 6  department shall promptly also give notice of such suspension

 7  or revocation to the salespersons of the company in this state

 8  of record with in the office of the department.  The company

 9  shall not solicit or write any new service agreements in this

10  state during the period of any such suspension or revocation,

11  nor after such revocation renew any business previously

12  written.

13         (2)  In its discretion, the office department may cause

14  notice of any such revocation to be published in one or more

15  newspapers of general circulation published in this state.

16         (3)  When the license is surrendered or revoked, the

17  service agreement company shall proceed immediately, following

18  the effective date of the surrender or order of revocation, to

19  conclude its affairs transacted under this part.  The service

20  agreement company shall not solicit, negotiate, advertise, or

21  effectuate new or renewal of service agreements.  The office

22  department retains jurisdiction over the service agreement

23  company as it may find to be in the best interest of the

24  insured until all contracts have been fulfilled, canceled, or

25  expired.

26         Section 1435.  Section 634.111, Florida Statutes, is

27  amended to read:

28         634.111  Duration of suspension; obligations of company

29  during suspension period; reinstatement.--

30         (1)  The suspension of the license of a company shall

31  be for such period not to exceed 1 year as is fixed by the

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 1  office department in the order of suspension, unless the

 2  office department shortens or rescinds such suspension or the

 3  order upon which the suspension is based is modified,

 4  rescinded, or reversed.

 5         (2)  During the period of suspension, the company shall

 6  file its annual statement and quarterly reports, pay fees, pay

 7  licenses, and pay taxes as required under this chapter as if

 8  the license had continued in full force.

 9         (3)  Upon expiration of the suspension period, if

10  within such period the license has not otherwise terminated,

11  the license of the company shall be reinstated automatically

12  unless the office department finds that the causes of the

13  suspension have not been removed or that the company is

14  otherwise not in compliance with the requirements of this

15  chapter.  The office department shall give the company notice

16  of any such finding not less than 30 days in advance of the

17  expiration of the suspension period.  If not so automatically

18  reinstated, the license shall be deemed to have expired as of

19  the end of the suspension period or upon failure of the

20  company to continue the license during the suspension period,

21  whichever event first occurs.

22         (4)  Upon reinstatement of the license of a company or

23  reinstatement of the certificate of authority of an insurer

24  following suspension, the authority of its salespersons in

25  this state to represent the company or insurer shall likewise

26  be reinstated. The office department shall promptly notify the

27  company or insurer and its salespersons of record in this

28  state of such reinstatement.

29         Section 1436.  Subsections (1), (2), (3), and (7) of

30  section 634.121, Florida Statutes, are amended to read:

31  

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 1         634.121  Filing of forms, required procedures,

 2  provisions.--

 3         (1)  A service agreement form or related form may not

 4  be issued or used in this state unless it has been filed with

 5  and approved by the office department.  Upon application for a

 6  license, the office department shall require the applicant to

 7  submit for approval each brochure, pamphlet, circular, form

 8  letter, advertisement, or other sales literature or

 9  advertising communication addressed or intended for

10  distribution. The office department shall disapprove any

11  document which is untrue, deceptive, or misleading or which

12  contains misrepresentations or omissions of material facts.

13         (a)  After an application has been approved, a licensee

14  is not required to submit brochures or advertisement to the

15  office department for approval; however, a licensee may not

16  have published, and a person may not publish, any brochure or

17  advertisement which is untrue, deceptive, or misleading or

18  which contains misrepresentations or omissions of material

19  fact.

20         (b)  For purposes of this section, brochures and

21  advertising includes, but is not limited to, any report,

22  circular, public announcement, certificate, or other printed

23  matter or advertising material which is designed or used to

24  solicit or induce any persons to enter into any motor vehicle

25  service agreement.

26         (c)  The office department shall disapprove any service

27  agreement form providing vehicle protection expenses which

28  does not clearly indicate the method for calculating the

29  benefit to be paid or provided to the service agreement

30  holder. All service agreement forms providing vehicle

31  protection expenses shall clearly indicate the term of the

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 1  service agreement, whether new or used cars are eligible for

 2  the vehicle protection product, and that the service agreement

 3  holder may not make any claim against the Florida Insurance

 4  Guarantee Association for vehicle protection expenses.  The

 5  service agreement shall be provided to a service agreement

 6  holder on a form that provides only vehicle protection

 7  expenses. A service agreement form providing vehicle

 8  protection expenses must state that the service agreement

 9  holder must have in force at the time of loss comprehensive

10  motor vehicle insurance coverage as a condition precedent to

11  requesting payment of vehicle protection expenses.

12         (2)  Every filing required under this section must be

13  made not less than 30 days in advance of issuance or use.  At

14  the expiration of 30 days from the date of filing, a form so

15  filed becomes approved unless prior thereto it has been

16  affirmatively disapproved by written notice of the office

17  department. The office department may extend by not more than

18  an additional 15 days the period within which it may

19  affirmatively approve or disapprove any form by giving notice

20  of extension before the expiration of the initial 30-day

21  period.  At the expiration of any period as so extended and in

22  the absence of prior affirmative disapproval, the form becomes

23  approved.

24         (3)  Before the sale of any service agreement, written

25  notice must be given to the prospective purchaser by the

26  service agreement company or its agent or salesperson, on an

27  office-approved a department-approved form, that purchase of

28  the service agreement is not required in order to purchase or

29  obtain financing for a motor vehicle.

30         (7)  If a service agreement company violates any lawful

31  order of the office department or fails to meet its

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 1  contractual obligations under this part, upon notice from the

 2  office department, the sales representative or agent must

 3  refund to the service agreement holder the unearned pro rata

 4  commission, unless the sales representative or agent has made

 5  other arrangements, satisfactory to the office department,

 6  with the service agreement holder.

 7         Section 1437.  Section 634.1213, Florida Statutes, is

 8  amended to read:

 9         634.1213  Grounds for disapproval.--The office

10  department may disapprove any service agreement form or

11  service agreement company sales brochures filed under s.

12  634.121, or withdraw any previous approval thereof, if the

13  form or brochure:

14         (1)  Is in any respect in violation of or does not

15  comply with this part, any applicable provision of the Florida

16  Insurance Code, or any applicable rule of the commission

17  department.

18         (2)  Contains or incorporates by reference when such

19  incorporation is otherwise permissible, any inconsistent,

20  ambiguous, or misleading clauses, or exceptions and conditions

21  which deceptively affect the risk purported to be assumed in

22  the general coverage of the service agreement.

23         (3)  Has any title, heading, or other indication of its

24  provisions which is misleading.

25         (4)  Is printed or otherwise reproduced in such manner

26  as to render any material provision of the form substantially

27  illegible.

28         (5)  Contains any provision which is unfair or

29  inequitable or which encourages misrepresentation.

30  

31  

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 1         (6)  Contains any provision which makes it difficult to

 2  determine the actual insurer or service agreement company

 3  issuing the form.

 4         (7)  Contains any provision for reducing claim payments

 5  due to depreciation of parts, except for marine engines.

 6         Section 1438.  Section 634.1216, Florida Statutes, is

 7  amended to read:

 8         634.1216  Rate filings.--Each insurer and each motor

 9  vehicle service agreement company shall file with the office

10  department the rates, rating schedules, or rating manuals

11  used, including all modifications of rates and premiums, to be

12  paid by the service agreement holder.  Every filing shall

13  state the proposed effective date thereon.  The filing shall

14  be made not less than 30 days before its effective date.

15         Section 1439.  Section 634.137, Florida Statutes, is

16  amended to read:

17         634.137  Financial and statistical reporting

18  requirements.--

19         (1)  Each service agreement company shall submit to the

20  office department financial reports on forms prescribed by the

21  commission and furnished by the office department as follows:

22         (a)  Reports for a period ending December 31 are due by

23  March 1.

24         (b)  Reports for a period ending March 31 are due by

25  May 15.

26         (c)  Reports for a period ending June 30 are due by

27  August 15.

28         (d)  Reports for a period ending September 30 are due

29  by November 15.

30         (2)  Any motor vehicle service agreement company

31  engaged in the business of issuing service agreements in this

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 1  state must transmit the following information, based on

 2  Florida data, to the office department each year with the

 3  annual report of the company:

 4         (a)  Net assets.

 5         (b)  Premiums written.

 6         (c)  Premiums earned.

 7         (d)  Unearned premium reserve.

 8         (e)  Percent of claim exposure for which contractual

 9  liability insurance has been obtained.

10         (f)  Incurred claims, not including claims incurred but

11  not reported.

12         (g)  Claims incurred but not reported.

13         (h)  Loss reserve for all claims except those incurred

14  but not reported.

15         (i)  Reserves for claims incurred but not reported.

16         (j)  Number and dollar amount of claims paid.

17         (k)  Itemized acquisition costs.

18         (l)  Net gain or loss from operations before income

19  taxes.

20         (m)  Net investment income from all reserves.

21         (n)  Net investment income from surplus.

22         (o)  Ratio of claims paid to premium earned.

23         (p)  Ratio of all claims incurred to premium earned

24  plus investment income from all reserves.

25         (q)  Number of claims resisted.

26         (r)  Any additional information that the commission

27  department requires in order to evaluate the financial

28  condition or trade practices of companies issuing service

29  agreements in this state.

30         (3)  Any service agreement company that does not file

31  an annual statement in the form and within the time provided

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 1  by this section shall forfeit up to $100 for each day during

 2  which the default continues, and, upon notice by the office

 3  department, the authority of the company to do business in

 4  this state shall cease while the default continues.  The

 5  office department shall deposit all sums collected under this

 6  subsection in the Insurance Commissioner's Regulatory Trust

 7  Fund.

 8         (4)  The office department shall provide a summary of

 9  the information provided pursuant to subsection (2) in its

10  annual report.

11         (5)  The commission department may by rule require each

12  motor vehicle service agreement company to submit to the

13  office department, as the commission department may designate,

14  all or part of the information contained in the financial

15  reports required by this section in a computer-readable form

16  compatible with the electronic data processing system

17  specified by the office department.

18         Section 1440.  Section 634.141, Florida Statutes, is

19  amended to read:

20         634.141  Examination of companies.--Motor vehicle

21  service agreement companies licensed under this part shall be

22  subject to periodic examination by the office department in

23  the same manner and subject to the same terms and conditions

24  as applies to insurers under part II of chapter 624. The

25  commission department may by rule establish provisions whereby

26  a company may be exempted from examination.

27         Section 1441.  Section 634.151, Florida Statutes, is

28  amended to read:

29         634.151  Service of process; appointment of

30  commissioner as process agent.--

31  

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 1         (1)  Each company applying for authority to transact

 2  business in this state, whether domestic or foreign, shall

 3  file with the office department its appointment of the Chief

 4  Financial Officer Insurance Commissioner and Treasurer and her

 5  or his successors in office, on a form as furnished by the

 6  office department, as its attorney to receive service of all

 7  legal process issued against it in any civil action or

 8  proceeding in this state and agreeing that process so served

 9  shall be valid and binding upon the company.  The appointment

10  shall be irrevocable, shall bind the company and any successor

11  in interest as to the assets or liabilities of the company,

12  and shall remain in effect as long as there is outstanding in

13  this state any obligation or liability of the company

14  resulting from its service agreement transactions therein.

15         (2)  At the time of such appointment of the Chief

16  Financial Officer Insurance Commissioner and Treasurer as its

17  process agent the company shall file with the department a

18  designation of the name and address of the person to whom

19  process against it served upon the Chief Financial Officer

20  Insurance Commissioner and Treasurer is to be forwarded.  The

21  company may change the designation at any time by a new

22  filing.

23         Section 1442.  Section 634.161, Florida Statutes, is

24  amended to read:

25         634.161  Service of process; method.--

26         (1)  Service of process upon the Chief Financial

27  Officer Insurance Commissioner and Treasurer as process agent

28  of the company shall be made by serving copies in triplicate

29  of the process upon the Chief Financial Officer Insurance

30  Commissioner and Treasurer or upon her or his assistant,

31  deputy, or other person in charge of her or his office.  Upon

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 1  receiving such service, the Chief Financial Officer Insurance

 2  Commissioner and Treasurer shall file one copy with the

 3  department, return one copy with her or his admission of

 4  service, and promptly forward one copy of the process by

 5  registered or certified mail to the person last designated by

 6  the company to receive the same, as provided under s. 634.151.

 7         (2)  Process served upon the Chief Financial Officer

 8  Insurance Commissioner and Treasurer and copy thereof

 9  forwarded as in this section provided shall for all purposes

10  constitute valid and binding service thereof upon the company.

11         Section 1443.  Subsections (2) and (10) of section

12  634.181, Florida Statutes, are amended to read:

13         634.181  Grounds for compulsory refusal, suspension, or

14  revocation of license or appointment of salespersons.--The

15  department shall deny, suspend, revoke, or refuse to renew or

16  continue the license or appointment of any such salesperson if

17  it finds that as to the salesperson any one or more of the

18  following applicable grounds exist:

19         (2)  If the license or appointment is willfully used,

20  or to be used, to circumvent any of the requirements or

21  prohibitions of this part, any applicable provision of the

22  Florida Insurance Code, or rule of the department or

23  commission.

24         (10)  Willful failure to comply with, or willful

25  violation of any proper order of the department or office, or

26  willful violation of any provision of this part, or of any

27  applicable provision of the insurance code, or applicable rule

28  of the department or commission.

29         Section 1444.  Subsection (3) of section 634.191,

30  Florida Statutes, is amended to read:

31  

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 1         634.191  Grounds for discretionary refusal, suspension,

 2  or revocation of license or appointment of salespersons.--The

 3  department may, in its discretion, deny, suspend, revoke, or

 4  refuse to renew or continue the license or appointment of any

 5  salesperson if it finds that as to the salesperson any one or

 6  more of the following applicable grounds exist under

 7  circumstances for which such denial, suspension, revocation,

 8  or refusal is not mandatory under s. 634.181:

 9         (3)  Has violated any lawful order or rule of the

10  department or commission.

11         Section 1445.  Section 634.211, Florida Statutes, is

12  amended to read:

13         634.211  Administrative fine in lieu of suspension or

14  revocation of license or appointment.--

15         (1)  If the department or office finds that one or more

16  grounds exist for the suspension, revocation, or refusal to

17  renew or continue any license or appointment issued under this

18  part, the department or office may, in its discretion, in lieu

19  of such suspension, revocation, or refusal, on a first offense

20  and except where such suspension, revocation, or refusal is

21  mandatory, impose upon the licensee or appointee an

22  administrative penalty in an amount of up to $500 per

23  violation, or if the department or office has found willful

24  misconduct or willful violation on the part of the licensee or

25  appointee, an administrative fine of up to $1,000 per

26  violation. The administrative penalty may, in the department's

27  or office's discretion, be augmented in amount by an amount

28  equal to any commissions received by or accruing to the credit

29  of the licensee or appointee in connection with any

30  transaction as to which the grounds for suspension,

31  revocation, or refusal related.

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 1         (2)  The department or office may allow the licensee or

 2  appointee a reasonable period, not to exceed 30 days, within

 3  which to pay to the department or office the amount of the

 4  penalty so imposed.  If the licensee or appointee fails to pay

 5  the penalty in its entirety to the department or office at its

 6  office at Tallahassee within the period so allowed, the

 7  license and appointment of the licensee or appointee shall

 8  stand suspended, revoked, or renewal or continuation refused,

 9  as the case may be, upon expiration of such period.

10         Section 1446.  Section 634.221, Florida Statutes, is

11  amended to read:

12         634.221  Disposition of taxes and fees.--All license

13  taxes, taxes on premiums and assessments, registration fees,

14  and administrative fines and penalties collected under this

15  act from motor vehicle service agreement companies shall be

16  deposited to the credit of the Insurance Commissioner's

17  Regulatory Trust Fund.

18         Section 1447.  Section 634.231, Florida Statutes, is

19  amended to read:

20         634.231  Insurance business not authorized.--Nothing in

21  the Florida Insurance Code or in this part shall be deemed to

22  authorize any motor vehicle service agreement company to

23  transact any insurance business other than that of motor

24  vehicle service agreement as herein defined or otherwise to

25  engage in any other type of insurance unless the company is

26  authorized under a certificate of authority issued by the

27  office department under the provisions of the Florida

28  Insurance Code.

29         Section 1448.  Section 634.242, Florida Statutes, is

30  amended to read:

31  

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 1         634.242  Injunctive proceedings.--In addition to the

 2  penalties and other enforcement provisions of this part, if

 3  any person violates s. 634.031 or s. 634.171 or any rule

 4  adopted pursuant thereto, the department or office may resort

 5  to a proceeding for injunction in the circuit court of the

 6  county where such person resides or has her or his or its

 7  principal place of business, and therein apply for such

 8  temporary and permanent orders as the department or office may

 9  deem necessary to restrain such person from engaging in any

10  such activity, until such person has complied with such

11  provision or rule.

12         Section 1449.  Section 634.253, Florida Statutes, is

13  amended to read:

14         634.253  Delinquency proceedings.--

15         (1)  If any of the grounds for rehabilitation,

16  liquidation, conservation, reorganization, seizure, or summary

17  proceedings of an insurer as set forth in ss. 631.051,

18  631.061, and 631.071 exist as to a company, the office

19  department may petition for an appropriate court order or may

20  pursue such other relief as is afforded in part I of chapter

21  631.

22         (2)  In the event an order of rehabilitation,

23  liquidation, conservation, reorganization, seizure, or summary

24  proceedings has been entered against a company, the department

25  and office shall be vested with all of the powers and duties

26  they have it has under the provisions of part I of chapter 631

27  in regard to delinquency proceedings of insurance companies.

28         Section 1450.  Section 634.261, Florida Statutes, is

29  amended to read:

30         634.261  Voluntary compliance in lieu of suspension or

31  revocation.--The department or office may terminate an

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 1  investigation or an action upon acceptance of the written

 2  assurance of a company or salesperson of voluntary compliance

 3  with this part.  An acceptance of assurance may be conditioned

 4  on a commitment to reimburse agreement purchasers or to take

 5  other appropriate corrective action.  An assurance is not

 6  evidence of a prior violation of this part. However, unless an

 7  assurance has been rescinded by agreement of the parties or

 8  voided by a court for good cause, the subsequent failure to

 9  comply with the terms of an assurance is prima facie evidence

10  of a violation of this part. No such assurance shall act as a

11  limitation upon any action or remedy available to a person

12  aggrieved by a violation of this part.

13         Section 1451.  Subsections (7) and (13) of section

14  634.282, Florida Statutes, are amended to read:

15         634.282  Unfair methods of competition and unfair or

16  deceptive acts or practices defined.--The following methods,

17  acts, or practices are defined as unfair methods of

18  competition and unfair or deceptive acts or practices:

19         (7)  UNLAWFUL REBATES.--Except as otherwise expressly

20  provided by law, or in an applicable filing with the office

21  department, knowingly:

22         (a)  Permitting, or offering to make, or making, any

23  contract or agreement as to such contract other than as

24  plainly expressed in the motor vehicle service agreement

25  issued thereon;

26         (b)  Paying, allowing, or giving, or offering to pay,

27  allow, or give, directly or indirectly, as inducement to such

28  motor vehicle service agreement, any unlawful rebate of

29  premiums payable on the agreement, any special favor or

30  advantage in the benefits thereon, or any valuable

31  consideration or inducement not specified in the agreement;

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 1         (c)  Giving, selling, or purchasing, or offering to

 2  give, sell, or purchase, as an inducement to such motor

 3  vehicle service agreement or in connection therewith, any

 4  stocks, bonds, or other securities of any insurance company,

 5  service agreement company, or other corporation, association,

 6  or partnership, or any dividends or profits accrued thereon,

 7  or anything of value not specified in the motor vehicle

 8  service agreement.

 9         (13)  ILLEGAL DEALINGS IN PREMIUMS; EXCESS OR REDUCED

10  CHARGES FOR MOTOR VEHICLE SERVICE AGREEMENTS.--

11         (a)  Knowingly collecting any sum as a premium or

12  charge for a motor vehicle service agreement, which is not

13  then provided, or is not in due course to be provided, subject

14  to acceptance of the risk by a service agreement company or an

15  insurer, by a motor vehicle service agreement issued by a

16  service agreement company or an insurer as permitted by this

17  part.

18         (b)  Knowingly collecting as a premium or charge for a

19  motor vehicle service agreement any sum in excess of or less

20  than the premium or charge applicable to such motor vehicle

21  service agreement, in accordance with the applicable

22  classifications and rates as filed with the office department,

23  and as specified in the motor vehicle service agreement.

24  

25  No provision of this section shall be deemed to prohibit a

26  service agreement company or a licensed insurer from giving to

27  service agreement holders, prospective service agreement

28  holders, and others for the purpose of advertising, any

29  article of merchandise having a value of not more than $25.

30         Section 1452.  Section 634.283, Florida Statutes, is

31  amended to read:

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 1         634.283  Power of department and office to examine and

 2  investigate.--The department and office may, within their

 3  respective regulatory jurisdictions, examine and investigate

 4  the affairs of every person involved in the business of motor

 5  vehicle service agreements in this state in order to determine

 6  whether such person has been or is engaged in any unfair

 7  method of competition or in any unfair or deceptive act or

 8  practice prohibited by s. 634.2815, and each shall have the

 9  powers and duties specified in ss. 634.284-634.289 in

10  connection therewith.

11         Section 1453.  Section 634.284, Florida Statutes, is

12  amended to read:

13         634.284  Prohibited practices; hearings; procedure;

14  service of process.--

15         (1)  Whenever the department or office has reason to

16  believe that any person has engaged, or is engaging, in this

17  state in any unfair method of competition or any unfair or

18  deceptive act or practice as defined in s. 634.282, or is

19  engaging in the business of motor vehicle service agreements

20  without being properly licensed as required by this part, and

21  that a proceeding by the department or office in respect

22  thereto would be in the interest of the public, the department

23  or office shall conduct or cause to have conducted a hearing

24  in accordance with chapter 120.

25         (2)  The department or office, a duly empowered hearing

26  officer, or an administrative law judge shall, during the

27  conduct of such hearing, have those powers enumerated in s.

28  120.569; however, the penalty for failure to comply with a

29  subpoena or with an order directing discovery is limited to a

30  fine not to exceed $1,000 per violation.

31  

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 1         (3)  A statement of charges, notice, or order under

 2  this part may be served by anyone duly authorized by the

 3  department or office, either in the manner provided by law for

 4  service of process in civil actions or by certifying and

 5  mailing a copy thereof to the person affected by such

 6  statement, notice, order, or other process at her or his

 7  residence or principal office or place of business. The

 8  verified return by the person so serving such statement,

 9  notice, order, or other process, setting forth the manner of

10  the service, is proof of the same; and the return postcard

11  receipt for such statement, notice, order, or other process,

12  certified and mailed as provided in this subsection, is proof

13  of service of the same.

14         Section 1454.  Section 634.285, Florida Statutes, is

15  amended to read:

16         634.285  Cease and desist and penalty orders.--After

17  the hearing provided for in s. 634.284, the department or

18  office shall enter a final order in accordance with s.

19  120.569. If it is determined that the person charged has

20  engaged in an unfair or deceptive act or practice or the

21  unlawful transaction of a service agreement business, the

22  department or office also shall issue an order requiring the

23  violator to cease and desist from engaging in such method of

24  competition, act, or practice or the unlawful transaction of

25  service agreement business. Further, the department or office

26  may, at its discretion, order any one or more of the following

27  penalties:

28         (1)  The suspension or revocation of such person's

29  license, or eligibility for any license, if the person knew,

30  or reasonably should have known, that she or he was in

31  violation of this part.

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 1         (2)  If it is determined that the person charged has

 2  provided or offered to provide motor vehicle service

 3  agreements without proper licensure, the imposition of an

 4  administrative penalty not to exceed $1,000 for each service

 5  agreement contract offered or effectuated.

 6         Section 1455.  Section 634.286, Florida Statutes, is

 7  amended to read:

 8         634.286  Appeals from orders of the department or

 9  office.--Any person subject to an order of the department or

10  office under s. 634.285 may obtain a review of such order by

11  filing an appeal therefrom in accordance with the provisions

12  and procedures for appeal from the orders of the department or

13  office in general under s. 120.68.

14         Section 1456.  Section 634.287, Florida Statutes, is

15  amended to read:

16         634.287  Penalty for violation of cease and desist

17  order.--Any person who violates a cease and desist order of

18  the department or office under s. 634.285 while such order is

19  in effect, after notice and hearing as provided in s. 634.284,

20  is subject, at the discretion of the department or office, to

21  any one or more of the following penalties:

22         (1)  A monetary penalty of not more than $50,000 as to

23  all matters determined in such hearing.

24         (2)  The suspension or revocation of such person's

25  license or eligibility to hold a license.

26         Section 1457.  Section 634.288, Florida Statutes, is

27  amended to read:

28         634.288  Civil liability.--The provisions of this part

29  are cumulative to rights under the general civil and common

30  law, and no action of the department or office will abrogate

31  such rights to damages or other relief in any court.

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 1         Section 1458.  Section 634.289, Florida Statutes, is

 2  amended to read:

 3         634.289  Rules.--The department or commission may adopt

 4  rules, in accordance with chapter 120, to identify specific

 5  methods of competition or acts or practices that are

 6  prohibited by s. 634.282, but these rules shall not enlarge

 7  upon or extend the provisions of that section.

 8         Section 1459.  Section 634.301, Florida Statutes, is

 9  amended to read:

10         634.301  Definitions.--As used in this part, the term:

11         (1)  "Department" means the Department of Insurance.

12         (1)(2)  "Gross written premiums" means the total amount

13  of premiums, paid for the entire period of the home warranty,

14  inclusive of commissions, for which the association is

15  obligated under home warranties issued.

16         (2)(3)  "Home improvement" means major remodeling,

17  enclosure of a garage, addition of a room, addition of a pool,

18  and other like items that add value to the residential

19  property.  The term does not include normal maintenance for

20  items such as painting, reroofing, and other like items

21  subject to normal wear and tear.

22         (3)(4)  "Home warranty" or "warranty" means any

23  contract or agreement:

24         (a)  Offered in connection with the sale of residential

25  property;

26         (b)  Offered in connection with a loan of $5,000 or

27  more which is secured by residential property that is the

28  subject of the warranty, but not in connection with the sale

29  of such property; or

30         (c)  Offered in connection with a home improvement of

31  $7,500 or more for residential property that is the subject of

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 1  the warranty, but not in connection with the sale of such

 2  property;

 3  

 4  whereby a person undertakes to indemnify the warranty holder

 5  against the cost of repair or replacement, or actually

 6  furnishes repair or replacement, of any structural component

 7  or appliance of a home, necessitated by wear and tear or an

 8  inherent defect of any such structural component or appliance

 9  or necessitated by the failure of an inspection to detect the

10  likelihood of any such loss. However, this part does not

11  prohibit the giving of usual performance guarantees by either

12  the builder of a home or the manufacturer or seller of an

13  appliance, as long as no identifiable charge is made for such

14  guarantee.  This part does not permit the provision of

15  indemnification against consequential damages arising from the

16  failure of any structural component or appliance of a home,

17  which practice constitutes the transaction of insurance

18  subject to all requirements of the insurance code.  This part

19  does not apply to service contracts entered into between

20  consumers and nonprofit organizations or cooperatives the

21  members of which consist of condominium associations and

22  condominium owners and which perform repairs and maintenance

23  for appliances or maintenance of the residential property.

24         (4)(5)  "Home warranty association" means any

25  corporation or any other organization, other than an

26  authorized insurer, issuing home warranties.

27         (5)(6)  "Impaired" means having liabilities in excess

28  of assets.

29         (6)(7)  "Insolvent" means the inability of a

30  corporation to pay its debts as they become due in the usual

31  course of its business.

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 1         (7)(8)  "Insurance code" means the Florida Insurance

 2  Code.

 3         (8)(9)  "Insurer" means any property or casualty

 4  insurer duly authorized to transact such business in this

 5  state.

 6         (9)(10)  "Listing period" means the period of time

 7  residential property is listed for sale with a licensed real

 8  estate broker, beginning on the date the residence is first

 9  listed for sale and ending on either the date the sale of the

10  residence is closed, the date the residence is taken off the

11  market, or the date the listing contract with the real estate

12  broker expires.

13         (10)(11)  "Net assets" means the amount by which the

14  total statutory assets of an association exceed the total

15  liabilities of the association.

16         (11)(12)  "Person" includes an individual, company,

17  corporation, association, insurer, agent, and every other

18  legal entity.

19         (12)(13)  "Premium" means the total consideration

20  received, or to be received, by an insurer or home warranty

21  association for or related to the issuance and delivery of any

22  binder or warranty, including any charges designated as

23  assessments or fees for policies, surveys, inspections, or

24  service or any other charges.

25         (13)(14)  "Sales representative" means any person with

26  whom an insurer or home inspection or warranty association has

27  a contract and who is utilized by such insurer or association

28  for the purpose of selling or issuing home warranties.  The

29  term includes all employees of an insurer or association

30  engaged directly in the sale or issuance of home warranties.

31  

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 1         (14)(15)  "Structural component" means the roof,

 2  plumbing system, electrical system, foundation, basement,

 3  walls, ceilings, or floors of a home.

 4         Section 1460.  Section 634.302, Florida Statutes, is

 5  amended to read:

 6         634.302  Powers of department, commission, and office;

 7  rules.--The office department shall administer this part, and

 8  the commission may, to that end, it has authority to adopt

 9  rules pursuant to ss. 120.536(1) and 120.54 to implement the

10  provisions of this part related to home warranty associations

11  and home warranties. The department shall administer this part

12  and may adopt rules pursuant to ss. 120.536(1) and 120.54 to

13  implement provisions of this part related to sales

14  representatives. Such rules by the commission or department

15  may include rules that identify specific methods of

16  competition or acts or practices that are prohibited by s.

17  634.336, but the rules shall not enlarge upon or extend the

18  provisions of that section.

19         Section 1461.  Subsection (1) of section 634.303,

20  Florida Statutes, is amended to read:

21         634.303  License required.--

22         (1)  No person in this state shall provide or offer to

23  provide home warranties unless authorized therefor under a

24  subsisting license issued by the office department.  The home

25  warranty association shall pay to the office department a

26  license tax of $200 for such license for each license year, or

27  part thereof, the license is in force.

28         Section 1462.  Section 634.304, Florida Statutes, is

29  amended to read:

30  

31  

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 1         634.304  Qualifications for license.--The office

 2  department may not issue or renew a license to any home

 3  warranty association unless the association:

 4         (1)  Is a solvent corporation formed under the laws of

 5  this state or of another state, district, territory, or

 6  possession of the United States.

 7         (2)  Furnishes the office department with evidence

 8  satisfactory to it that the management of the association is

 9  competent and trustworthy and can successfully manage the

10  affairs of the association in compliance with law.

11         (3)  Proposes to use and uses in its business a name,

12  together with a trademark or emblem, if any, which is

13  distinctive and not so similar to the name or trademark of any

14  other association, corporation, or organization already doing

15  business in this state as will tend to mislead or confuse the

16  public.

17         (4)  Meets the deposit requirements under s. 634.305.

18         (5)  Is otherwise in compliance with this part.

19         Section 1463.  Subsections (1), (2), and (6) of section

20  634.305, Florida Statutes, are amended to read:

21         634.305  Required deposit or bond.--

22         (1)  To assure the faithful performance of its

23  obligations to its members or subscribers in the event of

24  insolvency, every home warranty association shall, before the

25  issuance of its license by the office department, deposit with

26  the department securities of the type eligible for deposit by

27  insurers under s. 625.52, which securities shall have at all

28  times a market value of not less than $100,000.

29         (2)  In lieu of any deposit of securities required

30  under subsection (1), the association may:

31  

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 1         (a)  Deposit with the department securities of the type

 2  eligible for deposit by insurers under s. 625.52, which

 3  securities shall have at all times a market value of not less

 4  than $25,000; and

 5         (b)  File with the office department a surety bond in

 6  the amount of $75,000.  The bond shall be one issued by an

 7  authorized surety insurer, shall be for the same purpose as

 8  the deposit in lieu of which it is filed, and shall be subject

 9  to the approval of the office department.  The bond shall

10  guarantee that the home warranty association will faithfully

11  and truly perform all the conditions of any home warranty

12  contract. No such bond may be canceled or subject to

13  cancellation unless at least 60 days' advance notice thereof

14  in writing is filed with the office department.  In the event

15  that notice of termination of the bond is filed with the

16  office department, the home warranty association insured

17  thereunder shall, within 30 days of the filing of notice of

18  termination, provide the office department with a replacement

19  bond meeting the requirements of this part or deposit

20  additional securities as required under subsection (1). The

21  cancellation of a bond will not relieve the obligation of the

22  issuer of the bond for claims arising out of contracts issued

23  before cancellation of the bond unless a replacement bond or

24  securities are filed pursuant to this section.  In no event

25  may the liability of the issuer under the bond exceed the face

26  amount of the bond.  If within 30 days of filing the notice of

27  termination no replacement bond or additional security is

28  provided, the office department shall suspend the license of

29  the association until the deposit requirements are satisfied.

30         (6)  Such deposit or bond shall be maintained

31  unimpaired as long as the association continues in business in

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 1  this state.  Whenever the association ceases to do business in

 2  this state and furnishes the office department proof

 3  satisfactory to the office department that it has discharged

 4  or otherwise adequately provided for all its obligations to

 5  its members or subscribers in this state, the office and

 6  department shall release the deposited securities to the

 7  parties entitled thereto, on presentation of the receipts of

 8  the department for such securities, or shall release any bond

 9  filed with it pursuant to this section.

10         Section 1464.  Section 634.306, Florida Statutes, is

11  amended to read:

12         634.306  Application for and issuance of license.--

13         (1)  An application for license as a home warranty

14  association must be made to and must be filed with the office

15  department on printed forms prescribed by the commission and

16  furnished by the office it.

17         (2)  In addition to information relative to its

18  qualifications as required under s. 634.304, the application

19  must show:

20         (a)  The location of the applicant's home office.

21         (b)  The name and residence address of each director or

22  officer of the applicant and the name and residence address of

23  each shareholder who owns or controls 10 percent or more

24  shares of the applicant.

25         (c)  Such other pertinent information as is required by

26  the office or commission department.

27         (3)  The application must be accompanied by:

28         (a)  A copy of the applicant's articles of

29  incorporation, certified by the public official having custody

30  of the original, and a copy of the applicant's bylaws,

31  certified by the applicant's secretary.

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 1         (b)  A copy of the most recent financial statement of

 2  the applicant, verified under oath of at least two of its

 3  principal officers.

 4         (c)  A license fee in the amount of $200, as required

 5  under s. 634.303.

 6         (4)  Upon completion of the application for license,

 7  the office department shall examine the application and make

 8  any further investigation of the applicant as it deems

 9  advisable.  If it finds that the applicant is qualified

10  therefor, the office department shall issue to the applicant a

11  license as a home warranty association. If the office

12  department does not so find, it shall refuse to issue the

13  license and shall give the applicant written notice of such

14  refusal, setting forth the grounds therefor.

15         Section 1465.  Section 634.307, Florida Statutes, is

16  amended to read:

17         634.307  License expiration; renewal.--Each license as

18  a home warranty association issued under this part shall

19  expire on June 1 next following the date of issuance.  If the

20  association is then qualified therefor under the provisions of

21  this part, its license may be renewed annually, upon its

22  request and upon payment to the office department of the

23  license tax in the amount of $200, in advance, for each such

24  license year.

25         Section 1466.  Subsections (3) and (4) of section

26  634.3077, Florida Statutes, are amended to read:

27         634.3077  Financial requirements.--

28         (3)  An association shall not be required to set up an

29  unearned premium reserve if it has purchased contractual

30  liability insurance which demonstrates to the satisfaction of

31  the office department that 100 percent of its claim exposure

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 1  is covered by such insurance.  Such contractual liability

 2  insurance shall be obtained from an insurer that holds a

 3  certificate of authority to do business within the state or

 4  from an insurer approved by the office department as

 5  financially capable of meeting the obligations incurred

 6  pursuant to the policy. For purposes of this subsection, the

 7  contractual liability policy shall contain the following

 8  provisions:

 9         (a)  In the event that the home warranty association is

10  unable to fulfill its obligation under its contracts issued in

11  this state for any reason, including insolvency, bankruptcy,

12  or dissolution, the contractual liability insurer will pay

13  losses and unearned premiums under such plans directly to

14  persons making claims under such contracts.

15         (b)  The insurer issuing the policy shall assume full

16  responsibility for the administration of claims in the event

17  of the inability of the association to do so.

18         (c)  The policy may not be canceled or not renewed by

19  either the insurer or the association unless 60 days' written

20  notice thereof has been given to the office department by the

21  insurer before the date of such cancellation or nonrenewal.

22         (4)  An association that purchases contractual

23  liability insurance on the warranties that it issues shall

24  provide the office department with claim statistics required

25  to be filed by associations not purchasing such insurance.

26         Section 1467.  Section 634.3078, Florida Statutes, is

27  amended to read:

28         634.3078  Assets and liabilities.--

29         (1)  ASSETS.--In any determination of the financial

30  condition of a home warranty association, there shall be

31  

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 1  allowed as assets only those assets that are owned by the home

 2  warranty association company and which assets consist of:

 3         (a)  Cash in the possession of the home warranty

 4  association, or in transit under its control, including the

 5  true balance of any deposit in a solvent bank, savings and

 6  loan association, or trust company that is domiciled in the

 7  United States.

 8         (b)  Investments, securities, properties, and loans

 9  acquired or held in accordance with this part and, in

10  connection therewith, the following items:

11         1.  Interest due or accrued on any bond or evidence of

12  indebtedness which is not in default and which is not valued

13  on a basis including accrued interest.

14         2.  Declared and unpaid dividends on stock and shares,

15  unless the amount of the dividends has otherwise been allowed

16  as an asset.

17         3.  Interest due or accrued upon a collateral loan that

18  is not in default in an amount not to exceed 1 year's interest

19  thereon.

20         4.  Interest due or accrued on deposits or certificates

21  of deposit in solvent banks, savings and loan associations,

22  and trust companies domiciled in the United States, and

23  interest due or accrued on other assets, if such interest is

24  in the judgment of the office department a collectible asset.

25         5.  Interest due or accrued on current mortgage loans,

26  in an amount not exceeding the amount, if any, of the excess

27  of the value of the property less delinquent taxes thereon

28  over the unpaid principal; but interest accrued for a period

29  in excess of 90 days may not be allowed as an asset.

30         6.  Rent due or accrued on real property if such rent

31  is not in arrears for more than 3 months. However, rent

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 1  accrued for a period in excess of 90 days may not be allowed

 2  as an asset.

 3         7.  The unaccrued portion of taxes paid prior to the

 4  due date on real property.

 5         (c)  Furniture, fixtures, furnishings, vehicles, and

 6  equipment, if the original cost of each item is at least $200,

 7  which cost shall be amortized in full over a period not to

 8  exceed 5 calendar years, unless otherwise approved by the

 9  office department.

10         (d)  Part inventories maintained for the purpose of

11  servicing products warranted. Part inventories must be listed

12  at cost. Home warranty associations companies are required to

13  maintain records to support valuation of part inventories.

14         (e)  The liquidation value of prepaid expenses.

15         (f)  Other assets or receivables, not inconsistent with

16  the provisions of this section, deemed by the office

17  department to be available for the payment of losses and

18  claims, at values to be determined by the office department.

19  

20  The office department, upon determining that a home warranty

21  association's asset has not been evaluated according to

22  applicable law or that it does not qualify as an asset, shall

23  require the home warranty association to properly reevaluate

24  the asset or replace the asset with an asset suitable to the

25  office department within 30 days after written notification by

26  the office department of this determination, if the removal of

27  the asset from the organization's assets would impair the

28  company's solvency.

29         (2)  ASSETS NOT ALLOWED.--In addition to assets

30  impliedly excluded by the provisions of subsection (1), the

31  following assets expressly shall not be allowed as assets in

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 1  any determination of the financial condition of a home

 2  warranty association:

 3         (a)  Goodwill, agreement holder lists, patents, trade

 4  names, agreements not to compete, and other like intangible

 5  assets.

 6         (b)  Any note or account receivable from or advances to

 7  officers, directors, or controlling stockholders, whether

 8  secured or not, and advances to employees, agents, or other

 9  persons on personal security only.

10         (c)  Stock of the home warranty association owned by it

11  directly or owned by it through any entity in which the

12  organization owns or controls, directly or indirectly, more

13  than 25 percent of the ownership interest.

14         (d)  Leasehold improvements, stationery, and

15  literature, except that leasehold improvements made prior to

16  October 1, 2001, shall be allowed as an asset and shall be

17  amortized over the shortest of the following periods:

18         1.  The life of the lease.

19         2.  The useful life of the improvements.

20         3.  The 3-year period following October 1, 2001.

21         (e)  Furniture, fixtures, furnishings, vehicles, and

22  equipment, other than those items authorized under paragraph

23  (1)(c).

24         (f)  Notes or other evidences of indebtedness which are

25  secured by mortgages or deeds of trust which are in default

26  and beyond the express period specified in the instrument for

27  curing the default.

28         (g)  Bonds in default for more than 60 days.

29         (h)  Deferred costs other than the liquidation value of

30  prepaid expenses except for those companies that reserve 100

31  percent of gross written premium.

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 1         (i)  Any note, account receivable, advance, or other

 2  evidence of indebtedness, or investment in:

 3         1.  The parent of the home warranty association;

 4         2.  Any entity directly or indirectly controlled by the

 5  home warranty association's parent;

 6         3.  An affiliate of the parent or the home warranty

 7  association; or

 8         4.  Officers, directors, shareholders, employees, or

 9  salespersons of the home warranty association; however,

10  premium receivables under 45 days old may be considered an

11  admitted asset.

12  

13  The office department may, however, allow all or a portion of

14  such asset, at values to be determined by the office

15  department, if deemed by the office department to be available

16  for the payment of losses and claims.

17         (3)  LIABILITIES.--In any determination of the

18  financial condition of a home warranty association,

19  liabilities to be charged against its assets shall include,

20  but not be limited to:

21         (a)  The amount, in conformity with generally accepted

22  accounting principles, necessary to pay all of its unpaid

23  losses and claims incurred for or on behalf of an agreement

24  holder, on or prior to the end of the reporting period,

25  whether reported or unreported.

26         (b)  Taxes, expenses, and other obligations due or

27  accrued at the date of the statement.

28         (c)  Reserve for unearned premiums.

29  

30  The office department, upon determining that the home warranty

31  association has failed to report liabilities that should have

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 1  been reported, shall require a correct report which reflects

 2  the proper liabilities to be submitted by the home warranty

 3  association to the office department within 10 working days

 4  after receipt of written notification.

 5         Section 1468.  Subsections (1), (2), and (3) of section

 6  634.308, Florida Statutes, are amended to read:

 7         634.308  Grounds for suspension or revocation of

 8  license.--

 9         (1)  The license of any home warranty association may

10  be revoked or suspended, or the office department may refuse

11  to renew any such license, if it is determined that:

12         (a)  The association has violated any lawful rule or

13  order of the commission or office department or any provision

14  of this part.

15         (b)  The association has not maintained a funded,

16  unearned premium reserve account as required by s.

17  634.3077(1).

18         (c)  The association has not maintained, at a minimum,

19  net assets as required by s. 634.3077(2).

20         (2)  The license of any home warranty association shall

21  be suspended, revoked, or not renewed if it is determined that

22  such association:

23         (a)  Is in unsound financial condition or is in such

24  condition or is using such methods and practices in the

25  conduct of its business as to render its further transaction

26  of warranties in this state hazardous or injurious to its

27  warranty holders or to the public.

28         (b)  Has refused to be examined or to produce its

29  accounts, records, and files for examination, or if any of its

30  officers have refused to give information with respect to its

31  affairs or have refused to perform any other legal obligation

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 1  as to such examination, when required by the office

 2  department.

 3         (c)  Has failed to pay any final judgment rendered

 4  against it in this state within 60 days after the judgment

 5  became final.

 6         (d)  Has, without just cause, refused to pay proper

 7  claims arising under its warranties or, without just cause,

 8  has compelled warranty holders to accept less than the amount

 9  due them or to employ attorneys, or to bring suit against the

10  association, to secure full payment or settlement of such

11  claims.

12         (e)  Is affiliated with, and under the same general

13  management, interlocking directorate, or ownership as, another

14  home warranty association which transacts direct warranties in

15  this state without having a license therefor.

16         (f)  Has issued warranty contracts which renewal

17  contracts provide that the cost of renewal exceeds the

18  then-current cost for new warranty contracts or impose a fee

19  for inspection of the premises.

20         (3)  The office department may, pursuant to s. 120.60,

21  in its discretion and without advance notice or hearing

22  thereon, immediately suspend the license of any home warranty

23  association if it finds that one or more of the following

24  circumstances exist:

25         (a)  The association is insolvent or impaired.

26         (b)  The reserve account or net asset ratio requirement

27  of s. 634.3077 is not being maintained.

28         (c)  A proceeding for receivership, conservatorship or

29  rehabilitation or any other delinquency proceeding regarding

30  the association has been commenced in any state.

31  

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 1         (d)  The financial condition or business practices of

 2  the association otherwise pose an imminent threat to the

 3  public health, safety, or welfare of the residents of this

 4  state.

 5         Section 1469.  Section 634.310, Florida Statutes, is

 6  amended to read:

 7         634.310  Order, notice of suspension or revocation of

 8  license; effect; publication.--

 9         (1)  A suspension or revocation of the license of a

10  home warranty association shall be effected by order mailed to

11  the association by registered or certified mail.  The office

12  department also shall promptly give notice of such suspension

13  or revocation to the sales representatives of the association

14  in this state who are of record with in the office of the

15  department.  The association may not solicit or write any new

16  warranties in this state during the period of any such

17  suspension or revocation.

18         (2)  In its discretion, the office department may cause

19  notice of any such revocation or suspension to be published in

20  one or more newspapers of general circulation published in

21  this state.

22         Section 1470.  Subsection (4) of section 634.311,

23  Florida Statutes, is amended to read:

24         634.311  Duration of suspension; obligations of

25  association during suspension period; reinstatement.--

26         (4)  Upon reinstatement of the license of an

27  association, or reinstatement of the certificate of authority

28  of an insurer, following suspension, the authority of the

29  sales representatives of the association in this state to

30  represent the association or insurer shall likewise be

31  

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 1  reinstated.  The office department shall promptly notify the

 2  association.

 3         Section 1471.  Section 634.3112, Florida Statutes, is

 4  amended to read:

 5         634.3112  Administrative fine in lieu of suspension or

 6  revocation of license of association.--

 7         (1)  If it is found that one or more grounds exist for

 8  the suspension, revocation, or refusal to renew the license of

 9  any association issued under this part, the office department

10  may, in lieu of such revocation or suspension, impose a fine

11  upon the association.

12         (2)  With respect to any nonwillful violation, such

13  fine may not exceed $500 per violation.  In no event may such

14  fine exceed an aggregate amount of $5,000 for all nonwillful

15  violations arising out of the same action.  When an

16  association discovers a nonwillful violation, the association

17  shall correct the violation and, if restitution is due, make

18  restitution to all affected persons.  Such restitution shall

19  include interest at 12 percent per year from either the date

20  of the violation or the date of inception of the affected

21  person's policy, at the option of the association.

22         (3)  With respect to any knowing and willful violation

23  of a lawful order or rule of the office or commission

24  department or a provision of this part, the office department

25  may impose a fine upon the association in an amount not to

26  exceed $2,500 for each such violation.  In no event may such

27  fine exceed an aggregate amount of $25,000 for all knowing and

28  willful violations arising out of the same action.  In

29  addition to such fines, an association shall make restitution

30  when due in accordance with the provisions of subsection (2).

31  

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 1         (4)  The failure of an association to make restitution

 2  when due, as required under this section, constitutes a

 3  willful violation of this code.  However, if an insurer in

 4  good faith is uncertain as to whether any restitution is due

 5  or as to the amount of such restitution, it shall promptly

 6  notify the office department of the circumstances, and the

 7  failure to make restitution pending a determination thereof

 8  will not constitute a violation of this part.

 9         Section 1472.  Subsections (1), (2), and (3) of section

10  634.312, Florida Statutes, are amended to read:

11         634.312  Filing, approval of forms.--

12         (1)  No warranty form or related form shall be issued

13  or used in this state unless it has been filed with and

14  approved by the office department. Also upon application for a

15  license, the office department shall require the applicant to

16  submit for approval each brochure, pamphlet, circular, form

17  letter, advertisement, or other sales literature or

18  advertising communication addressed or intended for

19  distribution. Approval of the application constitutes approval

20  of such documents, unless the applicant has consented

21  otherwise in writing.  The office department shall disapprove

22  any document which is untrue, deceptive, or misleading or

23  which contains misrepresentations or omissions of material

24  facts.

25         (a)  After an application has been approved, a licensee

26  is not required to submit brochures or advertisement to the

27  office department for approval; however, a licensee may not

28  have published, and a person may not publish, any brochure or

29  advertisement which is untrue, deceptive, or misleading or

30  which contains misrepresentations or omissions of material

31  fact.

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 1         (b)  For purposes of this section, brochures and

 2  advertising includes, but is not limited to, any report,

 3  circular, public announcement, certificate, or other printed

 4  matter or advertising material which is designed or used to

 5  solicit or induce any persons to enter into any home warranty

 6  agreement.

 7         (2)  Every such filing shall be made not less than 30

 8  days in advance of issuance or use.  At the expiration of 30

 9  days from date of filing, a form so filed shall be deemed

10  approved unless prior thereto it has been affirmatively

11  approved or disapproved by written order of the office

12  department.

13         (3)  The office department shall not approve any such

14  form which allows for more than nine annual renewals or which

15  renewal contracts provide that the cost of renewal exceeds the

16  then-current cost for new warranty contracts or impose a fee

17  for inspection of the premises.

18         Section 1473.  Section 634.3123, Florida Statutes, is

19  amended to read:

20         634.3123  Grounds for disapproval of forms.--The office

21  department shall disapprove any form filed under s. 634.312 or

22  withdraw any previous approval if the form:

23         (1)  Is in violation of or does not comply with this

24  part.

25         (2)  Contains or incorporates by reference, when such

26  incorporation is otherwise permissible, any inconsistent,

27  ambiguous, or misleading clauses or exceptions or conditions

28  which deceptively affect the risk purported to be assumed in

29  the general coverage of the contract.

30         (3)  Has any title, heading, or other indication of its

31  provisions which is misleading.

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 1         (4)  Is printed or otherwise reproduced in such a

 2  manner as to render any material provision of the form

 3  illegible.

 4         (5)  Provides that the cost of renewal exceeds the

 5  then-current cost for new warranty contracts or impose a fee

 6  for inspection of the premises.

 7         Section 1474.  Section 634.3126, Florida Statutes, is

 8  amended to read:

 9         634.3126  Rate filings.--Each insurer and home warranty

10  association shall file with the office department for

11  informational purposes the rate to be charged for each

12  warranty and the premium, including all modifications of rates

13  and premiums.  Each filing shall state the proposed effective

14  date.

15         Section 1475.  Section 634.313, Florida Statutes, is

16  amended to read:

17         634.313  Tax on premiums; annual statement; reports.--

18         (1)  In addition to paying the license taxes provided

19  for in this part for home warranty associations and license

20  taxes provided in the insurance code as to insurers, each such

21  association and each such insurer must, annually on or before

22  March 1, file with the office department its annual statement,

23  in the form prescribed by the commission department, showing

24  all premiums received by it in connection with the issuance of

25  warranties in this state during the preceding calendar year

26  and using accounting principles that will enable the office

27  department to ascertain whether the reserve required by s.

28  634.3077 has been maintained.  Each annual statement must

29  contain a balance sheet listing all assets and liabilities; a

30  statement of operations and retained earnings; and a schedule

31  used to report all claims statistics.  The annual statement

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 1  must be completed using generally accepted accounting

 2  principles except as otherwise provided in this part.

 3  Further, each association and each insurer must pay to the

 4  Chief Financial Officer Treasurer a tax in an amount equal to

 5  2 percent of the amount of such premiums so received.

 6         (2)  Premiums received by insurers and taxed under this

 7  section are not subject to any premium tax provided for in the

 8  insurance code.

 9         (3)  Any association or insurer neglecting to file the

10  annual statement in the form and within the time provided by

11  this section shall forfeit up to $100 for each day during

12  which such neglect continues; and, upon notice by the office

13  department to that effect, its authority to do business in

14  this state shall cease while such default continues.  The

15  office department shall deposit all sums collected by it under

16  this section to the credit of the Insurance Commissioner's

17  Regulatory Trust Fund.

18         (4)  In addition to an annual statement, the office

19  department may require of licensees, under oath and in the

20  form prescribed by it, such additional regular or special

21  reports as it may deem necessary to the proper supervision of

22  licensees under this part.

23         (5)  The commission department may by rule require each

24  home warranty association to submit to the office department,

25  as the commission department may designate, all or part of the

26  information contained in the financial reports required by

27  this section in a computer-readable form compatible with the

28  electronic data processing system specified by the office

29  department.

30         Section 1476.  Section 634.314, Florida Statutes, is

31  amended to read:

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 1         634.314  Examination of associations.--Home warranty

 2  associations licensed under this part shall be subject to

 3  periodic examinations by the office department, in the same

 4  manner and subject to the same terms and conditions as apply

 5  to insurers under part II of chapter 624 of the insurance

 6  code.

 7         Section 1477.  Subsection (10) of section 634.320,

 8  Florida Statutes, is amended to read:

 9         634.320  Grounds for compulsory refusal, suspension, or

10  revocation of license or appointment of sales

11  representatives.--The department shall deny, suspend, revoke,

12  or refuse to renew or continue the license or appointment of

13  any sales representative if it is found that any one or more

14  of the following grounds applicable to the sales

15  representative exist:

16         (10)  Willful failure to comply with, or willful

17  violation of, any proper order or rule of the department or

18  commission or willful violation of any provision of this part.

19         Section 1478.  Subsection (3) of section 634.321,

20  Florida Statutes, is amended to read:

21         634.321  Grounds for discretionary refusal, suspension,

22  or revocation of license or appointment of sales

23  representatives.--The department may, in its discretion, deny,

24  suspend, revoke, or refuse to renew or continue the license or

25  appointment of any sales representative if it is found that

26  any one or more of the following grounds applicable to the

27  sales representative exist under circumstances for which such

28  denial, suspension, revocation, or refusal is not mandatory

29  under s. 634.320:

30         (3)  Violation of any lawful order or rule of the

31  department or commission.

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 1         Section 1479.  Section 634.324, Florida Statutes, is

 2  amended to read:

 3         634.324  Disposition of taxes and fees.--All license

 4  taxes, taxes on premiums, license and appointment fees, and

 5  administrative fines and penalties collected under this part

 6  from home warranty associations and sales representatives

 7  shall be deposited to the credit of the Insurance

 8  Commissioner's Regulatory Trust Fund.

 9         Section 1480.  Section 634.325, Florida Statutes, is

10  amended to read:

11         634.325  Insurance business not authorized.--Nothing in

12  the Florida Insurance Code or in this part shall be deemed to

13  authorize any home warranty association to transact any

14  insurance business other than that of home warranty as herein

15  defined or otherwise to engage in any other type of insurance

16  unless the association is authorized under a certificate of

17  authority issued by the office department under the provisions

18  of the Florida Insurance Code.

19         Section 1481.  Section 634.327, Florida Statutes, is

20  amended to read:

21         634.327  Applicability to warranty on new home.--This

22  part shall not apply to any program offering a warranty on a

23  new home which is underwritten by an insurer licensed to do

24  business in the state when the insurance policy underwriting

25  such program has been filed with and approved by the office

26  Department of Insurance as required by law.

27         Section 1482.  Subsections (3) and (4) of section

28  634.3284, Florida Statutes, are amended to read:

29         634.3284  Civil remedy.--

30         (3)  As a condition precedent to bringing an action

31  under this section, the office department and the insurer

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 1  shall be given written notice of the violation.  The notice

 2  shall state with specificity the facts which allegedly

 3  constitute the violation and the law upon which the plaintiff

 4  is relying and shall state that such notice is given in order

 5  to perfect the right to pursue the civil remedy authorized by

 6  this section.  No action will lie if, within 30 days

 7  thereafter, the damages are paid or the circumstances giving

 8  rise to the violation are corrected.

 9         (4)  This section shall not be construed to authorize a

10  class action suit against a home warranty association or a

11  civil action against the department or office or their, its

12  employees, or the Chief Financial Officer Insurance

13  Commissioner.

14         Section 1483.  Subsection (8) of section 634.336,

15  Florida Statutes, is amended to read:

16         634.336  Unfair methods of competition and unfair or

17  deceptive acts or practices defined.--The following methods,

18  acts, or practices are defined as unfair methods of

19  competition and unfair or deceptive acts or practices:

20         (8)  COERCION OF DEBTORS.--When a home warranty is sold

21  as authorized by s. 634.301(3)(b) s. 634.301(4)(b):

22         (a)  Requiring, as a condition precedent or condition

23  subsequent to the lending of the money or the extension of the

24  credit or any renewal thereof, that the person to whom such

25  credit is extended purchase a home warranty; or

26         (b)  Failing to provide the advice required by s.

27  634.344; or

28         (c)  Failing to comply with the provisions of s.

29  634.345.

30         Section 1484.  Section 634.337, Florida Statutes, is

31  amended to read:

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 1         634.337  Power of department and office to examine and

 2  investigate.--The department and office have has the power,

 3  within their respective regulatory jurisdictions, to examine

 4  and investigate the affairs of every person involved in the

 5  business of home warranty in this state in order to determine

 6  whether such person has been or is engaged in any unfair

 7  method of competition or in any unfair or deceptive act or

 8  practice prohibited by s. 634.335, and each shall have the

 9  powers and duties specified in ss. 634.338-634.342 in

10  connection therewith.

11         Section 1485.  Section 634.338, Florida Statutes, is

12  amended to read:

13         634.338  Prohibited practices; hearings; procedure;

14  service of process.--

15         (1)  Whenever the department or office has reason to

16  believe that any person has engaged, or is engaging, in this

17  state in any unfair method of competition or any unfair or

18  deceptive act or practice as defined in s. 634.336, or is

19  engaging in the business of home warranty without being

20  properly licensed as required by this part, and that a

21  proceeding by the department or office in respect thereto

22  would be in the interest of the public, the department or

23  office shall conduct or cause to have conducted a hearing in

24  accordance with chapter 120.

25         (2)  The department or office, a duly empowered hearing

26  officer, or an administrative law judge shall, during the

27  conduct of such hearing, have those powers enumerated in s.

28  120.569; however, the penalty for failure to comply with a

29  subpoena or with an order directing discovery is limited to a

30  fine not to exceed $1,000 per violation.

31  

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 1         (3)  A statement of charges, notice, or order under

 2  this part may be served by anyone duly authorized by the

 3  department or office, either in the manner provided by law for

 4  service of process in civil actions or by certifying and

 5  mailing a copy thereof to the person affected by such

 6  statement, notice, order, or other process at her or his or

 7  its residence or principal office or place of business.  The

 8  verified return by the person so serving such statement,

 9  notice, order, or other process, setting forth the manner of

10  the service is proof of the same; and the return postcard

11  receipt for such statement, notice, order, or other process,

12  certified and mailed as provided in this subsection, is proof

13  of service of the same.

14         Section 1486.  Section 634.339, Florida Statutes, is

15  amended to read:

16         634.339  Cease and desist and penalty orders.--After

17  the hearing provided for in s. 634.338, the department or

18  office shall enter a final order in accordance with s.

19  120.569. If it is determined that the person charged has

20  engaged in an unfair or deceptive act or practice or the

21  unlawful transaction of home warranty business, the department

22  or office also shall issue an order requiring the violator to

23  cease and desist from engaging in such method of competition,

24  act, or practice or the unlawful transaction of home warranty

25  business. Further, the department or office may, at its

26  discretion, order any one or more of the following penalties:

27         (1)  The suspension or revocation of such person's

28  license, or eligibility for any license, if the person knew,

29  or reasonably should have known, that she or he was in

30  violation of this part.

31  

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 1         (2)  If it is determined that the person charged has

 2  provided or offered to provide home warranties without proper

 3  licensure, the imposition of an administrative penalty not to

 4  exceed $1,000 for each home warranty contract offered or

 5  effectuated.

 6         Section 1487.  Section 634.34, Florida Statutes, is

 7  amended to read:

 8         634.34  Appeals from orders of the department or

 9  office.--Any person subject to an order of the department or

10  office under s. 634.339 may obtain a review of such order by

11  filing an appeal therefrom in accordance with the provisions

12  and procedures for appeal from the orders of the department or

13  office in general under s. 120.68.

14         Section 1488.  Section 634.341, Florida Statutes, is

15  amended to read:

16         634.341  Penalty for violation of cease and desist

17  order.--Any person who violates a cease and desist order of

18  the department or office under s. 634.339 while such order is

19  in effect, after notice and hearing as provided in s. 634.338,

20  is subject, at the discretion of the department or office, to

21  any one or more of the following penalties:

22         (1)  A monetary penalty of not more than $25,000 as to

23  all matters determined in such hearing.

24         (2)  The suspension or revocation of such person's

25  license or eligibility to hold a license.

26         Section 1489.  Section 634.342, Florida Statutes, is

27  amended to read:

28         634.342  Injunctive proceedings.--In addition to the

29  penalties and other enforcement provisions of this part, in

30  the event any person violates s. 634.303 or s. 634.318 or any

31  rule adopted or promulgated pursuant thereto, the department

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 1  or office is authorized to resort to a proceeding for

 2  injunction in the circuit court of the county where such

 3  person resides or has her or his principal place of business,

 4  and therein apply for such temporary and permanent orders as

 5  the department or office may deem necessary to restrain such

 6  person from engaging in any such activities, until such person

 7  has complied with such provision or rule.

 8         Section 1490.  Section 634.343, Florida Statutes, is

 9  amended to read:

10         634.343  Civil liability.--The provisions of this part

11  are cumulative to rights under the general civil and common

12  law, and no action of the department or office will abrogate

13  such rights to damages or other relief in any court.

14         Section 1491.  Section 634.344, Florida Statutes, is

15  amended to read:

16         634.344  Coercion of debtor prohibited.--

17         (1)  When a home warranty is sold as authorized by s.

18  634.301(3)(b) s. 634.301(4)(b), no person may require, as a

19  condition precedent or condition subsequent to the lending of

20  the money or the extension of the credit or any renewal

21  thereof, that the person to whom such money or credit is

22  extended purchase a home warranty.

23         (2)  When a home warranty is purchased in connection

24  with the lending of money as authorized by s. 634.301(3)(b) s.

25  634.301(4)(b), the insurer or home warranty association or the

26  sales representative of the insurer or home warranty

27  association shall advise the borrower or purchaser in writing

28  that Florida law prohibits the lender from requiring the

29  purchase of a home warranty as a condition precedent or

30  condition subsequent to the making of the loan.

31  

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 1         Section 1492.  Section 634.345, Florida Statutes, is

 2  amended to read:

 3         634.345  Buyer's right to cancel.--Every warranty sold

 4  in connection with a loan as authorized by s. 634.301(3)(b) s.

 5  634.301(4)(b) shall contain a provision providing that the

 6  purchaser or borrower may cancel the warranty within 10 days

 7  of purchase without penalty and, upon such cancellation, the

 8  insurer or home warranty association shall promptly refund the

 9  premium paid.  This provision may be included in the warranty

10  or by rider or endorsement thereto.

11         Section 1493.  Section 634.348, Florida Statutes, is

12  amended to read:

13         634.348  Investigatory records.--All active examination

14  or investigatory records of the department or office made or

15  received pursuant to this part are confidential and exempt

16  from the provisions of s. 119.07(1) until such investigation

17  is completed or ceases to be active. For the purposes of this

18  section, an investigation is considered "active" while the

19  investigation is being conducted by the department or office

20  with a reasonable, good faith belief that it may lead to the

21  filing of administrative, civil, or criminal proceedings.  An

22  investigation does not cease to be active if the department or

23  office is proceeding with reasonable dispatch, and there is

24  good faith belief that action may be initiated by the

25  department or office or other administrative or law

26  enforcement agency.

27         Section 1494.  Section 634.401, Florida Statutes, is

28  amended to read:

29         634.401  Definitions.--As used in this part, the term:

30         (1)  "Consumer product" means tangible property

31  primarily used for personal, family, or household purposes.

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 1         (2)  "Department" means the Department of Insurance.

 2         (2)(3)  "Gross income" means the total amount of

 3  revenue received in connection with business-related activity.

 4         (3)(4)  "Gross written premiums" means the total amount

 5  of premiums, paid or to be paid by the consumer for the entire

 6  period of the service warranty inclusive of commissions, for

 7  which the association is obligated under service warranties

 8  issued.

 9         (4)(5)  "Impaired" means having liabilities in excess

10  of assets.

11         (5)(6)  "Indemnify" means to undertake repair or

12  replacement of a consumer product, in return for the payment

13  of a segregated premium, when such consumer product suffers

14  operational failure.

15         (6)(7)  "Insolvent" means unable to pay debts as they

16  become due in the usual course of business.

17         (7)(8)  "Insurance code" means the Florida Insurance

18  Code as defined in s. 624.01.

19         (8)(9)  "Insurer" means any property or casualty

20  insurer duly authorized to transact such business in this

21  state.

22         (9)(10)  "Net assets" means total statutory assets in

23  excess of liabilities, except that assets pledged to secure

24  debts not reflected on the books of the service warranty

25  association shall not be included in net assets.

26         (10)(11)  "Person" includes an individual, company,

27  corporation, association, insurer, agent, and any other legal

28  entity.

29         (11)(12)  "Premium" means the total amount paid by the

30  consumer, including any charges designated as assessments or

31  

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 1  fees for membership, policy, survey, inspection, finance,

 2  service, or other charges by the association.

 3         (12)(13)  "Sales representative" means any person,

 4  retail store, corporation, partnership, or sole proprietorship

 5  utilized by an insurer or service warranty association for the

 6  purpose of selling or issuing service warranties.  However, in

 7  the case of service warranty associations selling service

 8  warranties from one or more business locations, the person in

 9  charge of each location may be considered the sales

10  representative.

11         (13)(14)  "Service warranty" means any warranty,

12  guaranty, extended warranty or extended guaranty, maintenance

13  service contract greater than 1 year in length or which does

14  not meet the exemption in paragraph (a), contract agreement,

15  or other written promise to indemnify against the cost of

16  repair or replacement of a consumer product in return for the

17  payment of a segregated charge by the consumer; however:

18         (a)  Maintenance service contracts written for 1 year

19  or less which do not contain provisions for indemnification

20  and which do not provide a discount to the consumer for any

21  combination of parts and labor in excess of 20 percent during

22  the effective period of such contract, motor vehicle service

23  agreements, transactions exempt under s. 624.125, and home

24  warranties subject to regulation under parts I and II of this

25  chapter are excluded from this definition; and

26         (b)  The term "service warranty" does not include

27  service contracts between consumers and condominium

28  associations.

29         (14)(15)  "Service warranty association" or

30  "association" means any person, other than an authorized

31  insurer, issuing service warranties.

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 1         (15)(16)  "Warrantor" means any person engaged in the

 2  sale of service warranties and deriving not more than 50

 3  percent of its gross income from the sale of service

 4  warranties.

 5         (16)(17)  "Warranty seller" means any person engaged in

 6  the sale of service warranties and deriving more than 50

 7  percent of its gross income from the sale of service

 8  warranties.

 9         (17)(18)  "Manufacturer" means any entity or its

10  affiliate which:

11         (a)  Derives a majority of its revenues from products

12  manufactured, built, assembled, constructed, or produced under

13  a product name wholly controlled by the applicant or an

14  affiliate thereof;

15         (b)  Issues service warranties only for consumer

16  products manufactured, built, assembled, constructed, or

17  produced under a product name wholly controlled by the

18  applicant or an affiliate thereof;

19         (c)  Is listed and traded on a recognized stock

20  exchange, is listed in NASDAQ (National Association of

21  Security Dealers Automated Quotation system) and publicly

22  traded in the over-the-counter securities markets, is required

23  to file either of Forms 10-K, 10-Q, or 20-G with the United

24  States Securities and Exchange Commission, or whose American

25  Depository Receipts are listed on a recognized stock exchange

26  and publicly traded;

27         (d)  Maintains outstanding debt obligations, if any,

28  rated in the top four rating categories by a recognized rating

29  service;

30         (e)  Has and maintains at all times, a minimum net

31  worth of at least $10 million as evidenced by certified

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 1  financial statements prepared by an independent certified

 2  public accountant in accordance with generally accepted

 3  accounting principles; and

 4         (f)  Is authorized to do business in this state.

 5         (18)(19)  "Affiliate" means any entity which exercises

 6  control over or is controlled by, the service warranty

 7  association or insurer, directly or indirectly, through:

 8         (a)  Equity ownership of voting securities;

 9         (b)  Common managerial control; or

10         (c)  Collusive participation by the management of the

11  service warranty association or insurer or the affiliate.

12         Section 1495.  Section 634.402, Florida Statutes, is

13  amended to read:

14         634.402  Powers of department, commission, and office;

15  rules.--The office department shall administer this part, and

16  the commission may to that end it has authority to adopt rules

17  pursuant to ss. 120.536(1) and 120.54 to implement the

18  provisions of this part related to service warranty

19  associations and service warranties. The department shall

20  administer this part and may adopt rules pursuant to ss.

21  120.536(1) and 120.54 to implement provisions of this part

22  related to sales representatives. Such rules by the commission

23  or department may identify specific methods of competition or

24  acts or practices that are prohibited by s. 634.436, but shall

25  not enlarge upon or extend the provisions of that section.

26         Section 1496.  Subsections (1) and (3) of section

27  634.403, Florida Statutes, are amended to read:

28         634.403  License required.--

29         (1)  No person in this state shall provide or offer to

30  provide service warranties unless authorized therefor under a

31  subsisting license issued by the office department. The

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 1  service warranty association shall pay to the office

 2  department a license fee of $200 for such license for each

 3  license year, or part thereof, the license is in force.

 4         (3)  The office department may, pursuant to s. 120.569,

 5  in its discretion and without advance notice and hearing,

 6  issue an immediate final order to cease and desist to any

 7  person or entity which violates this section. The Legislature

 8  finds that a violation of this section constitutes an imminent

 9  and immediate threat to the public health, safety, and welfare

10  of the residents of this state.

11         Section 1497.  section 634.404, Florida Statutes, is

12  amended to read:

13         634.404  Qualifications for license.--The office

14  department may not issue or allow a service warranty

15  association to maintain a license unless the association:

16         (1)  Is a warrantor with minimum net assets of $25,000

17  or a warranty seller with minimum net assets of $300,000.

18         (2)  Furnishes the office department with evidence

19  satisfactory to it that the management of the association is

20  competent and trustworthy and can successfully manage the

21  affairs of the association in compliance with law.

22         (3)  Proposes to use and uses in its business a name,

23  together with a trademark or emblem, if any, which is

24  distinctive and not so similar to the name or trademark of any

25  other person already doing business in this state as will tend

26  to mislead or confuse the public.

27         (4)  Makes the deposit or files the bond required under

28  s. 634.405.

29         (5)  Is formed under the laws of this state or another

30  state, district, territory, or possession of the United

31  States, if the association is other than a natural person.

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 1         (6)  In lieu of the provisions of subsections (1)-(5)

 2  of this section and s. 634.407, a manufacturer or affiliate as

 3  defined in this part is eligible for licensure as a service

 4  warranty association under the provisions of this part and

 5  shall complete an application evidencing its qualifications as

 6  set forth in this section. The application for license as a

 7  service warranty association from a manufacturer or affiliate

 8  shall be made to, and filed with, the office department on

 9  printed forms as promulgated by the commission department to

10  be specifically and exclusively applicable to qualifying

11  manufacturers.

12         (a)  The commission department may require that the

13  applicant show:

14         1.  The state of the applicant's incorporation;

15         2.  The location of the applicant's home office; and

16         3.  The names and business addresses of the applicant's

17  board of directors and managing executive officer.

18         (b)  The department shall require that the application,

19  when filed, must be accompanied by:

20         1.  A copy of the applicant's articles of

21  incorporation, certified by the public official having custody

22  of the original, and a copy of the applicant's bylaws,

23  certified by the applicant's corporate secretary;

24         2.  Evidence that the applicant has complied with all

25  applicable statutory requirements regarding registering to do

26  business in this state; and

27         3.  A license fee in the amount of $500.

28         (c)  Upon submission of the application for license,

29  the office department shall examine the application to

30  determine its compliance with applicable sections of this

31  

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 1  part. Applicants shall be advised of any inadequate responses

 2  or missing information.

 3         (d)  Information as required in this section shall be

 4  updated as to changes thereto no less than two times annually,

 5  once at the time of the submission of the service warranty

 6  association's submission of its annual report, and the second

 7  time, no later than September 30 of each year.

 8         Section 1498.  Section 634.405, Florida Statutes, is

 9  amended to read:

10         634.405  Required deposit or bond.--

11         (1)  To assure the faithful performance of its

12  obligations to its members or subscribers in the event of

13  insolvency, each service warranty association shall, before

14  the issuance of its license by the office department and

15  during such time as the association may have premiums in force

16  in this state, deposit and maintain with the department

17  securities of the type eligible for deposit by insurers under

18  s. 625.52. Whenever the market value of the securities

19  deposited with the department is less than 95 percent of the

20  amount required, the association shall deposit additional

21  securities or otherwise increase the deposit to the amount

22  required.  Such securities shall have at all times a market

23  value as follows:

24         (a)  Warrantors.--

25         1.  Any warrantor which:

26         a.  Was licensed under this part before October 1,

27  1983;

28         b.  Was transacting service warranty business in this

29  state before June 14, 1978;

30         c.  Has continuously transacted service warranty

31  business in this state since June 14, 1978; and

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 1         d.  Has not during any year since June 14, 1978,

 2  written more than $100,000 of gross written premiums,

 3  

 4  shall place and maintain in trust with the department an

 5  amount equal to 50 percent of the gross written premiums in

 6  force.

 7         2.  A warrantor which has $300,000 or less of gross

 8  written premiums in this state and to which the provisions of

 9  subparagraph 1. do not apply shall place and maintain in trust

10  with the department an amount not less than $50,000.  A new

11  warrantor, before the issuance of its license and before

12  receiving any premiums, shall place and maintain in trust with

13  the department the amount of $50,000.

14         3.  A warrantor which has more than $300,000 but less

15  than $750,000 of gross written premiums in this state shall

16  place and maintain in trust with the department an amount not

17  less than $75,000.

18         4.  A warrantor which has $750,000 or more of gross

19  written premiums in this state shall place and maintain in

20  trust with the department an amount equal to $100,000.

21         5.  All warrantors, upon receipt of written notice from

22  the office department, shall have 30 calendar days in which to

23  make additional deposits.

24         (b)  Warranty sellers.--A warranty seller shall, before

25  the issuance of its license, place in trust with the

26  department an amount not less than $100,000.

27         (2)  In lieu of any deposit of securities required

28  under subsection (1) and subject to the approval of the office

29  department, the service warranty association may file with the

30  office department a surety bond issued by an authorized surety

31  insurer. The bond shall be for the same purpose as the deposit

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 1  in lieu of which it is filed. The office department may not

 2  approve any bond under the terms of which the protection

 3  afforded against insolvency is not equivalent to the

 4  protection afforded by those securities provided for in

 5  subsection (1). When a bond is deposited in lieu of the

 6  required securities, no warranties may be written which

 7  provide coverage for a time period beyond the duration of such

 8  bond. The bond shall guarantee that the service warranty

 9  association will faithfully and truly perform all the

10  conditions of any service warranty contract. No such bond may

11  be canceled or subject to cancellation unless at least 60

12  days' advance notice thereof, in writing, is filed with the

13  office department. In the event that notice of termination of

14  the bond is filed with the office department, the service

15  warranty association insured thereunder shall, within 30 days

16  of the filing of notice of termination, provide the office

17  department with a replacement bond meeting the requirements of

18  this part or deposit additional securities as required under

19  subsection (1). The cancellation of a bond will not relieve

20  the obligation of the issuer of the bond for claims arising

21  out of contracts issued before cancellation of the bond unless

22  a replacement bond or securities are filed.  In no event may

23  the liability of the issuer under the bond exceed the face

24  amount of the bond.  If within 30 days of filing the notice of

25  termination no replacement bond or additional security is

26  provided, the office department shall suspend the license of

27  the association until the deposit requirements are satisfied.

28         (3)  Securities and bonds posted by an association

29  pursuant to this section are for the benefit of, and subject

30  to action thereon in the event of insolvency or impairment of

31  any association or insurer by, any person or persons

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 1  sustaining an actionable injury due to the failure of the

 2  association to faithfully perform its obligations to its

 3  warranty holders.

 4         (4)  The state is responsible for the safekeeping of

 5  all securities deposited with the department under this part.

 6  Such securities are not, on account of being in this state,

 7  subject to taxation, but shall be held exclusively and solely

 8  to guarantee the faithful performance by the association of

 9  its obligations to its members or subscribers.

10         (5)  The depositing association shall, during its

11  solvency, have the right to exchange or substitute other

12  securities of like quality and value for securities on

13  deposit, to receive the interest and other income accruing to

14  such securities, and to inspect the deposit at all reasonable

15  times.

16         (6)  Such deposit or bond shall be maintained

17  unimpaired as long as the association continues in business in

18  this state. Whenever the association ceases to do business in

19  this state and furnishes the office department proof

20  satisfactory to the office department that it has discharged

21  or otherwise adequately provided for all its obligations to

22  its members or subscribers in this state, the office and

23  department shall release the deposited securities to the

24  parties entitled thereto, on presentation of the receipts of

25  the department for such securities, or shall release any bond

26  filed with it in lieu of such deposit.

27         (7)  Any business, or its affiliate, whose primary

28  source of income is the sale of goods to the final consumer

29  and derives more than 50 percent of its revenue through such

30  sales and maintains a net worth of $100 million, as evidenced

31  by either filing a form 10-K or other similar statement with

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 1  the Securities and Exchange Commission or which has an annual

 2  financial statement that is audited and certified by an

 3  independent public accounting firm, shall be presumed to have

 4  complied with this subsection if such forms or statement are

 5  filed with the office department.

 6         Section 1499.  Subsections (2), (3), (6), and (7) of

 7  section 634.406, Florida Statutes, are amended to read:

 8         634.406  Financial requirements.--

 9         (2)  An association utilizing an unearned premium

10  reserve shall deposit with the department a reserve deposit

11  equal to 10 percent of the gross written premium received on

12  all warranty contracts in force.  Such reserve deposit shall

13  be of a type eligible for deposit by insurers under s. 625.52.

14  Request for release of all or part of the reserve deposit may

15  be made quarterly and only after the office department has

16  received and approved the association's current financial

17  statements, as well as a statement sworn to by two officers of

18  the association verifying such release will not reduce the

19  reserve deposit to less than 10 percent of the gross written

20  premium. The reserve deposit required under this part shall be

21  included in calculating the reserve required by subsection

22  (1). The deposit required in s. 634.405(1)(b) shall be

23  included in calculating the reserve requirements of this

24  section.

25         (3)  An association will not be required to establish

26  an unearned premium reserve if it has purchased contractual

27  liability insurance which demonstrates to the satisfaction of

28  the office department that 100 percent of its claim exposure

29  is covered by such policy. The contractual liability insurance

30  shall be obtained from an insurer that holds a certificate of

31  authority to do business within the state. For the purposes of

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 1  this subsection, the contractual liability policy shall

 2  contain the following provisions:

 3         (a)  In the event that the service warranty association

 4  does not fulfill its obligation under contracts issued in this

 5  state for any reason, including insolvency, bankruptcy, or

 6  dissolution, the contractual liability insurer will pay losses

 7  and unearned premium refunds under such plans directly to the

 8  person making a claim under the contract.

 9         (b)  The insurer issuing the contractual liability

10  policy shall assume full responsibility for the administration

11  of claims in the event of the inability of the association to

12  do so.

13         (c)  The policy may not be canceled or not renewed by

14  either the insurer or the association unless 60 days' written

15  notice thereof has been given to the office department by the

16  insurer before the date of such cancellation or nonrenewal.

17         (d)  The contractual liability insurance policy shall

18  insure all service warranty contracts which were issued while

19  the policy was in effect whether or not the premium has been

20  remitted to the insurer.

21         (e)  In the event the issuer of the contractual

22  liability policy is fulfilling the service warranty covered by

23  policy and in the event the service warranty holder cancels

24  the service warranty, it is the responsibility of the

25  contractual liability policy issuer to effectuate a full

26  refund of unearned premium to the consumer. This refund shall

27  be subject to the cancellation fee provisions of s.

28  634.414(3).  The salesperson or agent shall refund to the

29  contractual liability policy issuer the unearned pro rata

30  commission.

31  

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 1         (f)  An association may not utilize both the unearned

 2  premium reserve and contractual liability insurance

 3  simultaneously. However, an association shall be allowed to

 4  have contractual liability coverage on service warranties

 5  previously sold and sell new service warranties covered by the

 6  unearned premium reserve, and the converse of this shall also

 7  be allowed. An association must be able to distinguish how

 8  each individual service warranty is covered.

 9         (6)  An association which holds a license under this

10  part and which does not hold any other license under this

11  chapter may allow its premiums to exceed the ratio to net

12  assets limitations of this section if the association meets

13  all of the following:

14         (a)  Maintains net assets of at least $750,000.

15         (b)  Utilizes a contractual liability insurance policy

16  approved by the office department which reimburses the service

17  warranty association for 100 percent of its claims liability.

18         (c)  The insurer issuing the contractual liability

19  insurance policy:

20         1.  Maintains a policyholder surplus of at least $100

21  million.

22         2.  Is rated "A" or higher by A.M. Best Company or an

23  equivalent rating by another national rating service

24  acceptable to the office department.

25         3.  Is in no way affiliated with the warranty

26  association.

27         4.  In conjunction with the warranty association's

28  filing of the quarterly and annual reports, provides, on a

29  form prescribed by the commission department, a statement

30  certifying the gross written premiums in force reported by the

31  warranty association and a statement that all of the warranty

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 1  association's gross written premium in force is covered under

 2  the contractual liability policy, whether or not it has been

 3  reported.

 4         (7)  The department shall require that A contractual

 5  liability policy must insure 100 percent of an association's

 6  claims exposure under all of the association's service

 7  warranty contracts, wherever written, unless all of the

 8  following are satisfied:

 9         (a)  The contractual liability policy contains a clause

10  that specifically names the service warranty contract holders

11  as sole beneficiaries of the contractual liability policy and

12  claims are paid directly to the person making a claim under

13  the contract;

14         (b)  The contractual liability policy meets all other

15  requirements of this part, including subsection (3) of this

16  section, which are not inconsistent with this subsection;

17         (c)  The association has been in existence for at least

18  5 years or the association is a wholly owned subsidiary of a

19  corporation that has been in existence and has been licensed

20  as a service warranty association in the state for at least 5

21  years, and:

22         1.  Is listed and traded on a recognized stock

23  exchange; is listed in NASDAQ (National Association of

24  Security Dealers Automated Quotation system) and publicly

25  traded in the over-the-counter securities market; is required

26  to file either of Forms 10-K, 100, or 20-G with the United

27  States Securities and Exchange Commission; or has American

28  Depository Receipts listed on a recognized stock exchange and

29  publicly traded or is the wholly owned subsidiary of a

30  corporation that is listed and traded on a recognized stock

31  exchange; is listed in NASDAQ (National Association of

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 1  Security Dealers Automated Quotation system) and publicly

 2  traded in the over-the-counter securities market; is required

 3  to file Form 10-K, Form 100, or Form 20-G with the United

 4  States Securities and Exchange Commission; or has American

 5  Depository Receipts listed on a recognized stock exchange and

 6  is publicly traded;

 7         2.  Maintains outstanding debt obligations, if any,

 8  rated in the top four rating categories by a recognized rating

 9  service;

10         3.  Has and maintains at all times a minimum net worth

11  of not less than $10 million as evidenced by audited financial

12  statements prepared by an independent certified public

13  accountant in accordance with generally accepted accounting

14  principles and submitted to the office department annually;

15  and

16         4.  Is authorized to do business in this state; and

17         (d)  The insurer issuing the contractual liability

18  policy:

19         1.  Maintains and has maintained for the preceding 5

20  years, policyholder surplus of at least $100 million and is

21  rated "A" or higher by A.M. Best Company or has an equivalent

22  rating by another rating company acceptable to the office

23  department;

24         2.  Holds a certificate of authority to do business in

25  this state and is approved to write this type of coverage; and

26         3.  Acknowledges to the office department quarterly

27  that it insures all of the association's claims exposure under

28  contracts delivered in this state.

29  

30  If all the preceding conditions are satisfied, then the scope

31  of coverage under a contractual liability policy shall not be

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 1  required to exceed an association's claims exposure under

 2  service warranty contracts delivered in this state.

 3         Section 1500.  Section 634.4061, Florida Statutes, is

 4  amended to read:

 5         634.4061  Assets and liabilities.--

 6         (1)  ASSETS.--In any determination of the financial

 7  condition of a service warranty association, there shall be

 8  allowed as assets only those assets that are owned by the

 9  service warranty association and which assets consist of:

10         (a)  Cash in the possession of the service warranty

11  association, or in transit under its control, including the

12  true balance of any deposit in a solvent bank, savings and

13  loan association, or trust company which is domiciled in the

14  United States.

15         (b)  Investments, securities, properties, and loans

16  acquired or held in accordance with this part, and in

17  connection therewith the following items:

18         1.  Interest due or accrued on any bond or evidence of

19  indebtedness which is not in default and which is not valued

20  on a basis including accrued interest.

21         2.  Declared and unpaid dividends on stock and shares,

22  unless the amount of the dividends has otherwise been allowed

23  as an asset.

24         3.  Interest due or accrued upon a collateral loan

25  which is not in default in an amount not to exceed 1 year's

26  interest thereon.

27         4.  Interest due or accrued on deposits or certificates

28  of deposit in solvent banks, savings and loan associations,

29  and trust companies domiciled in the United States, and

30  interest due or accrued on other assets, if such interest is

31  in the judgment of the office department a collectible asset.

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 1         5.  Interest due or accrued on current mortgage loans,

 2  in an amount not exceeding in any event the amount, if any, of

 3  the excess of the value of the property less delinquent taxes

 4  thereon over the unpaid principal; but in no event shall

 5  interest accrued for a period in excess of 90 days be allowed

 6  as an asset.

 7         6.  Rent due or accrued on real property if such rent

 8  is not in arrears for more than 3 months.  However, in no

 9  event shall rent accrued for a period in excess of 90 days be

10  allowed as an asset.

11         7.  The unaccrued portion of taxes paid prior to the

12  due date on real property.

13         (c)  Furniture, fixtures, furnishings, vehicles, and

14  equipment, if the original cost of each item is at least $200,

15  which cost shall be amortized in full over a period not to

16  exceed 5 calendar years, unless otherwise approved by the

17  office department.

18         (d)  Part inventories maintained for the purpose of

19  servicing products warranted.  Part inventories must be listed

20  at cost.  Associations are required to maintain records to

21  support valuation of parts inventories.

22         (e)  The liquidation value of prepaid expenses.

23         (f)  Other assets, not inconsistent with the provisions

24  of this section, deemed by the office department to be

25  available for the payment of losses and claims, at values to

26  be determined by it.

27  

28  The office department, upon determining that a service

29  warranty association's asset has not been evaluated according

30  to applicable law or that it does not qualify as an asset,

31  shall require the service warranty association to properly

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 1  reevaluate the asset or replace the asset with an asset

 2  suitable to the office department within 30 days of written

 3  notification by the office department of this determination,

 4  if the removal of the asset from the organization's assets

 5  would impair the company's solvency.

 6         (2)  ASSETS NOT ALLOWED.--In addition to assets

 7  impliedly excluded by the provisions of subsection (1), the

 8  following assets expressly shall not be allowed as assets in

 9  any determination of the financial condition of a service

10  warranty association:

11         (a)  Goodwill, agreement holder lists, patents, trade

12  names, agreements not to compete, and other like intangible

13  assets.

14         (b)  Any note or account receivable from or advances to

15  officers, directors, or controlling stockholders, whether

16  secured or not, and advances to employees, agents, or other

17  persons on personal security only.

18         (c)  Stock of the service warranty association owned by

19  it directly or owned by it through any entity in which the

20  organization owns or controls, directly or indirectly, more

21  than 25 percent of the ownership interest.

22         (d)  Leasehold improvements, stationery, and

23  literature, except that leasehold improvements made prior to

24  October 1, 1991, shall be allowed as an asset and shall be

25  amortized over the shortest of the following periods:

26         1.  The life of the lease.

27         2.  The useful life of the improvements.

28         3.  The 3-year period following October 1, 1991.

29         (e)  Furniture, fixtures, furnishings, vehicles, and

30  equipment, other than those items authorized under paragraph

31  (1)(c).

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 1         (f)  Notes or other evidences of indebtedness which are

 2  secured by mortgages or deeds of trust which are in default

 3  and beyond the express period specified in the instrument for

 4  curing the default.

 5         (g)  Bonds in default for more than 60 days.

 6         (h)  Deferred costs other than the liquidation value of

 7  prepaid expenses.

 8         (i)  Any note, account receivable, advance, or other

 9  evidence of indebtedness, or investment in:

10         1.  The parent of the service warranty association;

11         2.  Any entity directly or indirectly controlled by the

12  service warranty association parent; or

13         3.  An affiliate of the parent or the service warranty

14  association; however, receivables from the parent or

15  affiliated companies shall be considered an admitted asset of

16  the company when the office department is satisfied that the

17  repayment of receivables, loans, and advances from the parent

18  or the affiliated company are guaranteed by an organization in

19  accordance with s. 634.4065.

20         4.  Officers, directors, shareholders, employees, or

21  salespersons of the association.  However, premium receivables

22  under 45 days old may be considered an admitted asset.

23  

24  The office department may, however, allow all or a portion of

25  such asset, at values to be determined by the office

26  department, if deemed by the office department to be available

27  for the payment losses and claims.

28         (3)  LIABILITIES.--In any determination of the

29  financial condition of a service warranty association,

30  liabilities to be charged against its assets shall include,

31  but not be limited to:

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 1         (a)  The amount, in conformity with generally accepted

 2  accounting principles, necessary to pay all of its unpaid

 3  losses and claims incurred for or on behalf of an agreement

 4  holder, on or prior to the end of the reporting period,

 5  whether reported or unreported.

 6         (b)  Taxes, expenses, and other obligations due or

 7  accrued at the date of the statement.

 8         (c)  Reserve for unearned premiums.

 9  

10  The office department, upon determining that the service

11  warranty association has failed to report liabilities that

12  should have been reported, shall require a correct report

13  which reflects the proper liabilities to be submitted by the

14  service warranty association to the office department within

15  10 working days of receipt of written notification.

16         Section 1501.  Subsections (2) and (4) of section

17  634.4065, Florida Statutes, are amended to read:

18         634.4065  Guarantee agreements.--In order to include

19  receivables from affiliated companies as assets under s.

20  634.401(9) s. 634.401(10), the service warranty association

21  may provide a written guarantee to assure repayment of all

22  receivables, loans, and advances from affiliated companies,

23  provided that the written guarantee is made by a guaranteeing

24  organization which:

25         (2)  Submits a guarantee that is approved by the office

26  department as meeting the requirements of this part, provided

27  that the written guarantee contains a provision which requires

28  that the guarantee be irrevocable unless the guaranteeing

29  organization can demonstrate to the office department that the

30  cancellation of the guarantee will not result in the net

31  assets of the service warranty association falling below its

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 1  minimum net assets requirement and the office department

 2  approves cancellation of the guarantee.

 3         (4)  Submits annually, within 3 months after the end of

 4  its fiscal year, an audited financial statement certified by

 5  an independent certified public accountant, prepared in

 6  accordance with generally accepted accounting principles. The

 7  office department may, as it deems necessary, require

 8  quarterly financial statements from the guaranteeing

 9  organization.

10         Section 1502.  Section 634.407, Florida Statutes, is

11  amended to read:

12         634.407  Application for and issuance of license.--

13         (1)  An application for license as a service warranty

14  association shall be made to, and filed with, the office

15  department on printed forms as prescribed by the commission

16  and furnished by the office it.

17         (2)  In addition to information relative to its

18  qualifications as required under s. 634.404, the commission

19  department may require that the application show:

20         (a)  The location of the applicant's home office.

21         (b)  The name and residence address of each director,

22  officer, and 10-percent or greater stockholder of the

23  applicant.

24         (c)  Such other pertinent information as may be

25  required by the commission department.

26         (3)  The commission department may require that the

27  application, when filed, be accompanied by:

28         (a)  A copy of the applicant's articles of

29  incorporation, certified by the public official having custody

30  of the original, and a copy of the applicant's bylaws,

31  certified by the applicant's secretary.

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 1         (b)  A copy of the most recent financial statement of

 2  the applicant, verified under oath of at least two of its

 3  principal officers.

 4         (c)  A license fee in the amount of $200, as required

 5  under s. 634.403.

 6         (4)  Upon completion of the application for license,

 7  the office department shall examine the application and make

 8  such further investigation of the applicant as it deems

 9  advisable. If it finds that the applicant is qualified

10  therefor, the office department shall issue to the applicant a

11  license as a service warranty association. If the office

12  department does not find the applicant to be qualified, it

13  shall refuse to issue the license and shall give the applicant

14  written notice of such refusal, setting forth the grounds

15  therefor.

16         Section 1503.  Subsections (1), (2), and (3) of section

17  634.409, Florida Statutes, are amended to read:

18         634.409  Grounds for suspension or revocation of

19  license.--

20         (1)  The license of any service warranty association

21  may be revoked or suspended, or the office department may

22  refuse to renew any such license, if it is determined that the

23  association has violated any lawful rule or order of the

24  commission or office department or any provision of this part.

25         (2)  The license of any service warranty association

26  shall be suspended or revoked if it is determined that such

27  association:

28         (a)  Is in an unsound financial condition, or is in

29  such condition as would render its further transaction of

30  service warranties in this state hazardous or injurious to its

31  warranty holders or to the public.

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 1         (b)  Has refused to be examined or to produce its

 2  accounts, records, and files for examination, or if any of its

 3  officers have refused to give information with respect to its

 4  affairs or have refused to perform any other legal obligation

 5  as to such examination, when required by the office

 6  department.

 7         (c)  Has failed to pay any final judgment rendered

 8  against it in this state within 60 days after the judgment

 9  became final.

10         (d)  Has, without just cause, refused to pay proper

11  claims arising under its service warranties or, without just

12  cause, has compelled warranty holders to accept less than the

13  amount due them, or to employ attorneys, or to bring suit

14  against the association to secure full payment or settlement

15  of such claims.

16         (e)  Is affiliated with, and under the same general

17  management or interlocking directorate or ownership as,

18  another service warranty association which transacts direct

19  warranties in this state without having a license therefor.

20         (f)  Is using such methods or practices in the conduct

21  of its business as would render its further transaction of

22  service warranties in this state hazardous or injurious to its

23  warranty holders or to the public.

24         (3)  The office department may, pursuant to s. 120.60,

25  in its discretion and without advance notice or hearing

26  thereon, immediately suspend the license of any service

27  warranty association if it finds that one or more of the

28  following circumstances exist:

29         (a)  The association is insolvent or impaired as

30  defined in s. 631.011.

31  

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 1         (b)  The association's reserve account required by s.

 2  634.406(1) is not being maintained.

 3         (c)  A proceeding for receivership, conservatorship, or

 4  rehabilitation or any other delinquency proceeding regarding

 5  the association has been commenced in any state.

 6         (d)  The financial condition or business practices of

 7  the association otherwise pose an imminent threat to the

 8  public health, safety, or welfare of the residents of this

 9  state.

10         (e)  The association fails to affirm or deny coverage

11  of claims upon the written request of the agreement holder

12  within a reasonable time after notification of the claim.

13         (f)  The association fails to promptly provide a

14  reasonable explanation in writing to the agreement holder of

15  the basis in the service agreement, in relation to the facts

16  or applicable law, for denial of a claim or for the offer of a

17  compromise settlement.

18         Section 1504.  Section 634.411, Florida Statutes, is

19  amended to read:

20         634.411  Order; notice of suspension or revocation of

21  license; effect; publication.--

22         (1)  Suspension or revocation of a service warranty

23  association's license shall be by order of the office

24  department mailed to the association by registered or

25  certified mail. The office department shall also promptly give

26  notice of such suspension or revocation to the association's

27  sales representatives in this state which are of record with

28  the department in the department's office. The association

29  shall not solicit or write any new service warranties in this

30  state during the period of any such suspension or revocation.

31  

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 1         (2)  In its discretion, the office department may cause

 2  notice of any such revocation or suspension to be published in

 3  one or more newspapers of general circulation published in

 4  this state.

 5         (3)  When the license is surrendered, nonrenewed, or

 6  revoked, the association shall proceed, immediately following

 7  the effective date of the surrender, nonrenewal, or order of

 8  revocation, to conclude the affairs transacted under this

 9  part. The association shall not solicit, negotiate, advertise,

10  or effectuate new or renewal service warranty contracts.  The

11  office department retains jurisdiction over the association as

12  it may find to be in the best interest of the contract holders

13  until all contracts have been fulfilled, canceled, or expired.

14         Section 1505.  Section 634.413, Florida Statutes, is

15  amended to read:

16         634.413  Administrative fine in lieu of suspension or

17  revocation.--If the office department finds that one or more

18  grounds exist for the discretionary revocation or suspension

19  of a certificate of authority issued under this part, the

20  office department may, in lieu of such suspension or

21  revocation, impose a fine upon the insurer or service warranty

22  association in an amount not to exceed $1,000 per violation;

23  however, if it is found that an insurer or service warranty

24  association has knowingly and willfully violated a lawful rule

25  or order of the commission or office department or a provision

26  of this part, the office department may impose a fine upon the

27  insurer or association in an amount not to exceed $10,000 for

28  each violation.

29         Section 1506.  Subsections (1) and (2) of section

30  634.414, Florida Statutes, are amended to read:

31         634.414  Filing; approval of forms.--

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 1         (1)  No service warranty form or related form shall be

 2  issued or used in this state unless it has been filed with and

 3  approved by the office department. Upon application for a

 4  license, the office department shall require the applicant to

 5  submit for approval each brochure, pamphlet, circular, form

 6  letter, advertisement, or other sales literature or

 7  advertising communication addressed or intended for

 8  distribution. The office department shall disapprove any

 9  document which is untrue, deceptive, or misleading or which

10  contains misrepresentations or omissions of material facts.

11         (a)  After an application has been approved, a licensee

12  is not required to submit brochures or advertisement to the

13  office department for approval; however, a licensee may not

14  have published, and a person may not publish, any brochure or

15  advertisement which is untrue, deceptive, or misleading or

16  which contains misrepresentations or omissions of material

17  fact.

18         (b)  For purposes of this section, brochures and

19  advertising includes, but is not limited to, any report,

20  circular, public announcement, certificate, or other printed

21  matter or advertising material which is designed or used to

22  solicit or induce any persons to enter into any service

23  warranty agreement.

24         (2)  Each filing shall be made not less than 30 days in

25  advance of its issuance or use.  At the expiration of 30 days

26  from date of filing, a form so filed shall be deemed approved

27  unless prior thereto it has been affirmatively disapproved by

28  written order of the office department.

29         Section 1507.  Section 634.4145, Florida Statutes, is

30  amended to read:

31  

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 1         634.4145  Grounds for disapproval of forms.--The office

 2  department shall disapprove any form filed under s. 634.414 if

 3  the form:

 4         (1)  Violates this part;

 5         (2)  Is misleading in any respect;

 6         (3)  Is reproduced so that any material provision is

 7  substantially illegible; or

 8         (4)  Contains provisions which are unfair or

 9  inequitable or which encourage misrepresentation.

10         Section 1508.  Section 634.415, Florida Statutes, is

11  amended to read:

12         634.415  Tax on premiums; annual statement; reports;

13  quarterly statements.--

14         (1)  In addition to the license fees provided in this

15  part for service warranty associations and license taxes as

16  provided in the insurance code as to insurers, each such

17  association and insurer shall, annually on or before March 1,

18  file with the office department its annual statement, in the

19  form prescribed by the commission department, showing all

20  premiums or assessments received by it in connection with the

21  issuance of service warranties in this state during the

22  preceding calendar year and using accounting principles which

23  will enable the office department to ascertain whether the

24  financial requirements set forth in s. 634.406 have been

25  satisfied.

26         (2)  The gross amount of premiums and assessments is

27  subject to the sales tax imposed by s. 212.0506.

28         (3)  The office department may levy a fine of up to

29  $100 a day for each day an association neglects to file the

30  annual statement in the form and within the time provided by

31  this part. The amount of the fine shall be established by

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 1  rules adopted promulgated by the commission department. The

 2  office department shall deposit all sums collected by it under

 3  this section to the credit of the Insurance Commissioner's

 4  Regulatory Trust Fund.

 5         (4)  In addition to an annual statement, the office

 6  department may require of licensees, under oath and in the

 7  form prescribed by it, quarterly statements or special reports

 8  which it deems necessary to the proper supervision of

 9  licensees under this part. For manufacturers as defined in s.

10  634.401, the office department shall require only the annual

11  audited financial statements of the warranty operations and

12  corporate reports as filed by the manufacturer with the

13  Securities and Exchange Commission, provided that the office

14  department may require additional reporting by manufacturers

15  upon a showing by the office department that annual reporting

16  is insufficient to protect the interest of purchasers of

17  service warranty agreements in this state or fails to provide

18  sufficient proof of the financial status required by this

19  part.

20         (5)  The office department may suspend or revoke the

21  license of a service warranty association failing to file its

22  annual statement or quarterly report when due.

23         (6)  The commission department may by rule require each

24  service warranty association to submit to the office

25  department, as the commission department may designate, all or

26  part of the information contained in the financial statements

27  and reports required by this section in a computer-readable

28  form compatible with the electronic data processing system

29  specified by the office department.

30         Section 1509.  Section 634.416, Florida Statutes, is

31  amended to read:

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 1         634.416  Examination of associations.--

 2         (1)  Service warranty associations licensed under this

 3  part are subject to periodic examination by the office

 4  department, in the same manner and subject to the same terms

 5  and conditions that apply to insurers under part II of chapter

 6  624. However, the rate charged a service warranty association

 7  by the office department for examination may be adjusted to

 8  reflect the amount collected for the Form 10-K filing fee as

 9  provided in this section. On or before May 1 of each year, an

10  association may submit to the office department the Form 10-K,

11  as filed with the United States Securities and Exchange

12  Commission pursuant to the Securities Exchange Act of 1934, as

13  amended. Upon receipt and review of the most current Form

14  10-K, the office department may waive the examination

15  requirement; if the office department determines not to waive

16  the examination, such examination will be limited to that

17  examination necessary to ensure compliance with this part. The

18  Form 10-K shall be accompanied by a filing fee of $2,000 to be

19  deposited into the Insurance Commissioner's Regulatory Trust

20  Fund.

21         (2)  The office department is not required to examine

22  an association that has less than $20,000 in gross written

23  premiums as reflected in its most recent annual statement. The

24  office department may examine such an association if it has

25  reason to believe that the association may be in violation of

26  this part or is otherwise in an unsound financial condition.

27  If the office department examines an association that has less

28  than $20,000 in gross written premiums, the examination fee

29  may not exceed 5 percent of the gross written premiums of the

30  association.

31  

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 1         Section 1510.  Subsection (10) of section 634.422,

 2  Florida Statutes, is amended to read:

 3         634.422  Grounds for compulsory refusal, suspension, or

 4  revocation of license or appointment of sales

 5  representatives.--The department shall deny, suspend, revoke,

 6  or refuse to renew or continue the license or appointment of

 7  any sales representative if it is found that any one or more

 8  of the following grounds applicable to the sales

 9  representative exist:

10         (10)  Willful failure to comply with, or willful

11  violation of, any proper order or rule of the department or

12  commission, or willful violation of any provision of this

13  part.

14         Section 1511.  Subsection (3) of section 634.423,

15  Florida Statutes, is amended to read:

16         634.423  Grounds for discretionary refusal, suspension,

17  or revocation of license or appointment of sales

18  representatives.--The department may deny, suspend, revoke, or

19  refuse to renew or continue the license or appointment of any

20  sales representative if it is found that any one or more of

21  the following grounds applicable to the sales representative

22  exist under circumstances for which such denial, suspension,

23  revocation, or refusal is not mandatory under s. 634.422:

24         (3)  Violation of any lawful order or rule of the

25  department or commission.

26         Section 1512.  Subsection (2) of section 634.426,

27  Florida Statutes, is amended to read:

28         634.426  Administrative fine in lieu of suspension or

29  revocation of license or appointment.--

30         (2)  The order may allow the licensee or appointee a

31  reasonable period, not to exceed 30 days, within which to pay

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 1  to the department or office the amount of the penalty so

 2  imposed.  If the licensee or appointee fails to pay the

 3  penalty in its entirety to the department or office at its

 4  office in Tallahassee within the period so allowed, the

 5  license and appointment of the licensee or appointee shall

 6  stand suspended or revoked or renewal or continuation may be

 7  refused, as the case may be, upon expiration of such period

 8  and without any further proceedings.

 9         Section 1513.  Section 634.427, Florida Statutes, is

10  amended to read:

11         634.427  Disposition of taxes and fees.--All license

12  fees, taxes on premiums, registration fees, and administrative

13  fines and penalties collected under this part from service

14  warranty associations and sales representatives shall be

15  deposited to the credit of the Insurance Commissioner's

16  Regulatory Trust Fund.

17         Section 1514.  Section 634.428, Florida Statutes, is

18  amended to read:

19         634.428  Insurance business not authorized.--Nothing in

20  the Florida Insurance Code or in this part shall be deemed to

21  authorize any service warranty association to transact any

22  insurance business other than that of service warranty as

23  herein defined or otherwise to engage in any other type of

24  insurance unless the association is authorized under a

25  certificate of authority issued by the office department under

26  the provisions of the Florida Insurance Code.

27         Section 1515.  Subsection (2) of section 634.430,

28  Florida Statutes, is amended to read:

29         634.430  Dissolution or liquidation.--

30         (2)  The department and office shall be notified of the

31  commencement of voluntary dissolution proceedings of a

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 1  manufacturer licensed under this part.  As to the warranty

 2  operations of a manufacturer in this state, the department

 3  shall supervise the voluntary dissolution and shall require

 4  protection of the interests of the department, office, and

 5  consumers who have been issued service warranties by the

 6  manufacturer by the continuation of deposits or bonds as

 7  required by this part until that time as all warranties issued

 8  by the manufacturer are no longer in effect or all outstanding

 9  warranties have been assigned to another association approved

10  by the department and office. The notification as provided

11  herein shall be made by the manufacturer within 30 days of the

12  commencement of any legal action for dissolution.

13         Section 1516.  Subsections (3) and (4) of section

14  634.433, Florida Statutes, are amended to read:

15         634.433  Civil remedy.--

16         (3)  As a condition precedent to bringing an action

17  under this section, the office department and the insurer

18  shall be given written notice of the violation.  The notice

19  shall state with specificity the facts which allegedly

20  constitute the violation and the law upon which the plaintiff

21  is relying and shall state that such notice is given in order

22  to perfect the right to pursue the civil remedy authorized by

23  this section.  No action will lie if, within 30 days

24  thereafter, the damages are paid or the circumstances giving

25  rise to the violation are corrected.

26         (4)  This section shall not be construed to authorize a

27  class action suit against a service warranty association or a

28  civil action against the department, the office, their its

29  employees, or the Chief Financial Officer Insurance

30  Commissioner.

31  

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 1         Section 1517.  Section 634.437, Florida Statutes, is

 2  amended to read:

 3         634.437  Power of department and office to examine and

 4  investigate.--The department and office have has the power,

 5  within their respective regulatory jurisdictions, to examine

 6  and investigate the affairs of every person involved in the

 7  business of service warranty in this state in order to

 8  determine whether such person has been or is engaged in any

 9  unfair method of competition or in any unfair or deceptive act

10  or practice prohibited by s. 634.435, and each shall have the

11  powers and duties specified in ss. 634.438-634.442 in

12  connection therewith.

13         Section 1518.  Section 634.438, Florida Statutes, is

14  amended to read:

15         634.438  Prohibited practices; hearings; procedure;

16  service of process.--

17         (1)  Whenever the department or office has reason to

18  believe that any person has engaged, or is engaging, in this

19  state in any unfair method of competition or any unfair or

20  deceptive act or practice as defined in s. 634.436, or is

21  engaging in the business of service warranty without being

22  properly licensed as required by this part, and that a

23  proceeding by the department or office in respect thereto

24  would be in the interest of the public, the department or

25  office shall conduct or cause to have conducted a hearing in

26  accordance with chapter 120.

27         (2)  The department or office, a duly empowered hearing

28  officer, or an administrative law judge shall, during the

29  conduct of such hearing, have those powers enumerated in s.

30  120.569; however, the penalty for failure to comply with a

31  

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 1  subpoena or with an order directing discovery is limited to a

 2  fine not to exceed $1,000 per violation.

 3         (3)  A statement of charges, notice, or order under

 4  this part may be served by anyone duly authorized by the

 5  department or office, either in the manner provided by law for

 6  service of process in civil actions or by certifying and

 7  mailing a copy thereof to the person affected by such

 8  statement, notice, order, or other process at her or his or

 9  its residence or principal office or place of business.  The

10  verified return by the person so serving such statement,

11  notice, order, or other process, setting forth the manner of

12  the service, is proof of the same; and the return postcard

13  receipt for such statement, notice, order, or other process,

14  certified and mailed as provided in this subsection, is proof

15  of service of the same.

16         Section 1519.  Section 634.439, Florida Statutes, is

17  amended to read:

18         634.439  Cease and desist and penalty orders.--After

19  the hearing provided for in s. 634.438, the department or

20  office shall enter a final order in accordance with s.

21  120.569. If it is determined that the person charged has

22  engaged in an unfair or deceptive act or practice or the

23  unlawful transaction of service warranty business, the

24  department or office also shall issue an order requiring the

25  violator to cease and desist from engaging in such method of

26  competition, act, or practice or the unlawful transaction of

27  service warranty business. Further, the department or office

28  may, at its discretion, order any one or more of the following

29  penalties:

30         (1)  The suspension or revocation of such person's

31  license, or eligibility for any license, if the person knew,

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 1  or reasonably should have known, she or he was in violation of

 2  this part.

 3         (2)  If it is determined that the person charged has

 4  provided or offered to provide service warranties without

 5  proper licensure, the imposition of an administrative penalty

 6  not to exceed $1,000 for each service warranty contract

 7  offered or effectuated.

 8         Section 1520.  Section 634.44, Florida Statutes, is

 9  amended to read:

10         634.44  Appeals from orders of the department or

11  office.--Any person subject to an order of the department or

12  office under s. 634.439 may obtain a review of such order by

13  filing an appeal therefrom in accordance with the provisions

14  and procedures for appeal from the orders of the department or

15  office in general under s. 120.68.

16         Section 1521.  Section 634.441, Florida Statutes, is

17  amended to read:

18         634.441  Penalty for violation of cease and desist

19  order.--Any person who violates a cease and desist order of

20  the department or office under s. 634.439 while such order is

21  in effect, after notice and hearing as provided in s. 634.438,

22  is subject, at the discretion of the department or office, to

23  any one or more of the following penalties:

24         (1)  A monetary penalty of not more than $50,000 as to

25  all matters determined in such hearing.

26         (2)  The suspension or revocation of such person's

27  license or eligibility to hold a license.

28         Section 1522.  Section 634.442, Florida Statutes, is

29  amended to read:

30         634.442  Injunctive proceedings.--In addition to the

31  penalties and other enforcement provisions of this part, if

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 1  any person violates s. 634.403 or s. 634.420 or any rule

 2  adopted pursuant thereto, the department or office may resort

 3  to a proceeding for injunction in the circuit court of the

 4  county where such person resides or has her or his or its

 5  principal place of business, and therein apply for such

 6  temporary and permanent orders as the department or office

 7  deems may deem necessary to restrain such person from engaging

 8  in any such activities, until such person has complied with

 9  such provision or rule.

10         Section 1523.  Section 634.443, Florida Statutes, is

11  amended to read:

12         634.443  Civil liability.--The provisions of this part

13  are cumulative to rights under the general civil and common

14  law, and no action of the department or office will abrogate

15  such rights to damages or other relief in any court.

16         Section 1524.  Section 634.444, Florida Statutes, is

17  amended to read:

18         634.444  Investigatory records.--All active examination

19  or investigatory records of the department or office made or

20  received pursuant to this part are confidential and exempt

21  from the provisions of s. 119.07(1) until such investigation

22  is completed or ceases to be active. For the purposes of this

23  section, an investigation is considered "active" while the

24  investigation is being conducted by the department or office

25  with a reasonable, good faith belief that it may lead to the

26  filing of administrative, civil, or criminal proceedings. An

27  investigation does not cease to be active if the department or

28  office is proceeding with reasonable dispatch, and there is

29  good faith belief that action may be initiated by the

30  department or office or other administrative law enforcement

31  agency.

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 1         Section 1525.  Subsection (3) of section 635.011,

 2  Florida Statutes, is amended to read:

 3         635.011  Definitions.--As used in this chapter, the

 4  term:

 5         (3)  "Department" means the Department of Insurance of

 6  this state.

 7         Section 1526.  Subsection (1) of section 635.031,

 8  Florida Statutes, is amended to read:

 9         635.031  Additional limitations.--In addition to laws

10  otherwise applicable, mortgage guaranty insurers are subject

11  to the following limitations:

12         (1)  No such insurer may retain risk as to any one

13  subject of insurance in any amount exceeding 10 percent of its

14  surplus as to policyholders.  In determining the amount of

15  risk retained, applicable reinsurance in any assuming insurer

16  authorized to transact insurance in this state or approved by

17  the office department shall be deducted from the total direct

18  risk insured.

19         Section 1527.  Subsection (2) of section 635.041,

20  Florida Statutes, is amended to read:

21         635.041  Contingency reserve.--

22         (2)  Subject to approval by the insurance department of

23  the insurer's state of domicile and upon 30 days' prior notice

24  to the office Department of Insurance of this state, the

25  contingency reserve shall be available for loss payments only

26  when the insurer's incurred losses in any one calendar year

27  exceed 35 percent of the corresponding earned premiums.

28         Section 1528.  Subsection (3) of section 635.042,

29  Florida Statutes, is amended to read:

30         635.042  Minimum surplus requirement.--

31  

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 1         (3)  If a mortgage guaranty insurer is not in

 2  compliance with this section, the office department may take

 3  any action against the insurer that the office department may

 4  take against an insurer that is not in compliance with s.

 5  624.408.

 6         Section 1529.  Subsections (1) and (2) of section

 7  635.071, Florida Statutes, are amended to read:

 8         635.071  Filings, approval of forms; rate filings.--

 9         (1)  No policy form or related form may be issued or

10  used in this state unless it has been filed with and approved

11  by the office department as provided by laws applicable to

12  casualty or surety insurance.

13         (2)  Each insurer shall file with the office department

14  for informational purposes the rate to be charged and the

15  premium to be paid by the policyholder, including all

16  modifications of rates and premiums.

17         Section 1530.  Section 635.081, Florida Statutes, is

18  amended to read:

19         635.081  Administration and enforcement.--The

20  commission may department has authority to adopt rules

21  pursuant to ss. 120.536(1) and 120.54 to implement the

22  provisions of this chapter and shall have the same powers of

23  administration and enforcement of the provisions of this

24  chapter as it has with respect to casualty or surety insurers

25  in general under the Florida Insurance Code.

26         Section 1531.  Section 636.003, Florida Statutes, is

27  amended to read:

28         636.003  Definitions.--As used in this act, the term:

29         (1)  "Capitation" means the fixed amount paid by a

30  prepaid limited health service organization to a health care

31  provider under contract with the prepaid limited health

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 1  service organization in exchange for the rendering of covered

 2  limited health services.

 3         (2)  "Commissioner" means the Commissioner of

 4  Insurance.

 5         (3)  "Department" means the Department of Insurance.

 6         (2)(4)  "Enrollee" means an individual, including

 7  dependents, who is entitled to limited health services

 8  pursuant to a contract, or any other evidence of coverage,

 9  with an entity authorized to provide or arrange for such

10  services under this act.

11         (3)(5)  "Evidence of coverage" means the certificate,

12  agreement, membership card, or contract issued pursuant to

13  this act setting forth the coverage to which an enrollee is

14  entitled.

15         (4)(6)  "Insolvent" means that all the statutory assets

16  of the prepaid limited health service organization, if made

17  immediately available, would not be sufficient to discharge

18  all of its statutory liabilities or that the prepaid limited

19  health service organization is unable to pay its debts as they

20  become due in the usual course of business.

21         (5)(7)  "Limited health service" means ambulance

22  services, dental care services, vision care services, mental

23  health services, substance abuse services, chiropractic

24  services, podiatric care services, and pharmaceutical

25  services. "Limited health service" does not include inpatient,

26  hospital surgical services, or emergency services except as

27  such services are provided incident to the limited health

28  services set forth in this subsection.

29         (6)(8)  "Prepaid limited health service contract" means

30  any contract entered into by a prepaid limited health service

31  organization with a subscriber or group of subscribers to

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 1  provide limited health services in exchange for a prepaid per

 2  capita or prepaid aggregate fixed sum.

 3         (7)(9)  "Prepaid limited health service organization"

 4  means any person, corporation, partnership, or any other

 5  entity which, in return for a prepayment, undertakes to

 6  provide or arrange for, or provide access to, the provision of

 7  a limited health service to enrollees through an exclusive

 8  panel of providers. Prepaid limited health service

 9  organization does not include:

10         (a)  An entity otherwise authorized pursuant to the

11  laws of this state to indemnify for any limited health

12  service;

13         (b)  A provider or entity when providing limited health

14  services pursuant to a contract with a prepaid limited health

15  service organization, a health maintenance organization, a

16  health insurer, or a self-insurance plan; or

17         (c)  Any person who, in exchange for fees, dues,

18  charges or other consideration, provides access to a limited

19  health service provider without assuming any responsibility

20  for payment for the limited health service or any portion

21  thereof.

22         (8)(10)  "Provider" means, but is not limited to, any

23  physician, dentist, health facility, or other person or

24  institution which is duly licensed in this state to deliver

25  limited health services.

26         (9)(11)  "Qualified independent actuary" means an

27  actuary who is a member of the American Academy of Actuaries

28  or the Society of Actuaries and has experience in establishing

29  rates for limited health services and who has no financial or

30  employment interest in the prepaid limited health service

31  organization.

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 1         (10)(12)  "Reporting period" means the annual

 2  accounting period or fiscal year, or any part thereof, of the

 3  prepaid limited health service organization. The calendar year

 4  shall be the fiscal year for each such organization other than

 5  those holding an existing certificate of authority as of

 6  October 1, 1993.

 7         (11)(13)  "Subscriber" means an individual who has

 8  contracted, or arranged, or on whose behalf a contract or

 9  arrangement has been entered into, with a prepaid limited

10  health service organization for health care services or other

11  persons who also receive health care services as a result of

12  the contract.

13         (12)(14)  "Surplus" means total statutory assets in

14  excess of total liabilities, except that assets pledged to

15  secure debts not reflected on the books of the prepaid limited

16  health service organization shall not be included in surplus.

17  Surplus includes capital stock, capital in excess of par,

18  other contributed capital, retained earnings, and surplus

19  notes.

20         (13)(15)  "Surplus notes" means debt which has been

21  subordinated to all claims of subscribers and general

22  creditors of the organization and the debt instrument shall so

23  state.

24         (14)(16)  "Statutory accounting principles" means

25  generally accepted accounting principles, except as modified

26  by this act.

27         (15)(17)  "Qualified employee" means an employee of the

28  organization:

29         (a)  Who has a minimum of 5 years of experience in rate

30  determinations for prepaid health services, and who

31  demonstrates through filings with the office department that

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 1  the person is in fact qualified under the terms of this act;

 2  or

 3         (b)  Who is a member of the American Academy of

 4  Actuaries or the Society of Actuaries and has experience in

 5  establishing rates for limited health service.

 6         Section 1532.  Section 636.006, Florida Statutes, is

 7  amended to read:

 8         636.006  Insurance business not authorized.--Nothing in

 9  the Florida Insurance Code or this act authorizes any prepaid

10  limited health service organization to transact any insurance

11  business other than that specifically authorized by this act,

12  or otherwise to engage in any other type of insurance unless

13  it is authorized under a certificate of authority issued by

14  the office department under the provisions of the Florida

15  Insurance Code.

16         Section 1533.  Section 636.007, Florida Statutes, is

17  amended to read:

18         636.007  Certificate of authority required.--A person,

19  corporation, partnership, or other entity may not operate a

20  prepaid limited health service organization in this state

21  without obtaining and maintaining a certificate of authority

22  from the office department pursuant to this act. A political

23  subdivision of this state which is operating an emergency

24  medical services system and offers a prepaid ambulance service

25  plan as a part of its emergency medical services system shall

26  be exempt from the provisions of this act and all other

27  provisions of the insurance code. An insurer, while authorized

28  to transact health insurance in this state, or a health

29  maintenance organization possessing a valid certificate of

30  authority in this state, may also provide services under this

31  

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 1  act without additional qualification or authority, but shall

 2  be otherwise subject to the applicable provisions of this act.

 3         Section 1534.  Section 636.008, Florida Statutes, is

 4  amended to read:

 5         636.008  Application for certificate of

 6  authority.--Before any entity may operate a prepaid limited

 7  health service organization, it must obtain a certificate of

 8  authority from the office department. An application for a

 9  certificate of authority to operate a prepaid limited health

10  service organization must be filed with the office department

11  on a form prescribed by the commission department. Such

12  application must be sworn to by an officer or authorized

13  representative of the applicant and be accompanied by the

14  following:

15         (1)  A copy of the applicant's basic organizational

16  document, including the articles of incorporation, articles of

17  association, partnership agreements, trust agreement, or other

18  applicable documents and all amendments to such documents.

19         (2)  A copy of all bylaws, rules, and regulations, or

20  similar documents, if any, regulating the conduct of the

21  applicant's internal affairs.

22         (3)  A list of the names, addresses, official

23  positions, and biographical information of the individuals who

24  are responsible for conducting the applicant's affairs,

25  including, but not limited to, all members of the board of

26  directors, board of trustees, executive committee, or other

27  governing board or committee, the officers, contracted

28  management company personnel, and any person or entity owning

29  or having the right to acquire 10 percent or more of the

30  voting securities of the applicant.  Such listing must fully

31  disclose the extent and nature of any contracts or

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 1  arrangements between any individual who is responsible for

 2  conducting the applicant's affairs and the prepaid limited

 3  health service organization, including any possible conflicts

 4  of interest.

 5         (4)  A complete biographical statement, on forms

 6  prescribed by the commission department, an independent

 7  investigation report, and a set of fingerprints, as provided

 8  in chapter 624, with respect to each individual identified

 9  under subsection (3).

10         (5)  A statement generally describing the applicant,

11  its facilities and personnel, and the limited health service

12  or services to be offered.

13         (6)  A copy of the form of all contracts made or to be

14  made between the applicant and any providers regarding the

15  provision of limited health services to enrollees.

16         (7)  A copy of the form of any contract made or

17  arrangement to be made between the applicant and any person

18  listed in subsection (3).

19         (8)  A copy of the form of any contract made or to be

20  made between the applicant and any person, corporation,

21  partnership, or other entity for the performance on the

22  applicant's behalf of any function, including, but not limited

23  to, marketing, administration, enrollment, investment

24  management, and subcontracting for the provision of limited

25  health services to enrollees.

26         (9)  A copy of the form of any prepaid limited health

27  service contract which is to be issued to employers, unions,

28  trustees, individuals, or other organizations and a copy of

29  any form of evidence of coverage to be issued to subscribers.

30  

31  

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 1         (10)  A copy of the applicant's most recent financial

 2  statements audited by an independent certified public

 3  accountant.

 4         (11)  A copy of the applicant's financial plan,

 5  including a 3-year projection of anticipated operating

 6  results, a statement of the sources of funding, and provisions

 7  for contingencies, for which projection all material

 8  assumptions shall be disclosed.

 9         (12)  A schedule of rates and charges for each contract

10  to be used which contains an opinion from a qualified

11  independent actuary or a qualified employee that the rates are

12  not inadequate, excessive, or discriminatory. If a prepaid

13  limited health service organization does not employ or

14  otherwise retain the services of an independent actuary, the

15  chief executive officer of the prepaid limited health service

16  organization must review and sign the certification indicating

17  her or his agreement with its conclusions. If the office

18  department determines that, based upon documents filed with

19  the office department, the qualified employee is not

20  qualified, the organization shall retain the services of a

21  qualified independent actuary.

22         (13)  A description of the proposed method of

23  marketing.

24         (14)  A description of the subscriber complaint

25  procedures to be established and maintained as required under

26  s. 636.038.

27         (15)  A description of how the applicant will comply

28  with s. 636.046.

29         (16)  The fee for issuance of a certificate of

30  authority as provided in s. 636.057.

31  

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 1         (17)  Such other information as the commission or

 2  office department may reasonably require to make the

 3  determinations required by this act.

 4  

 5  The office department shall issue a certificate of authority

 6  which shall expire on June 1 each year and which the office

 7  department shall renew if the applicant pays the license fees

 8  provided in s. 636.057 and if the office department is

 9  satisfied that the organization is in compliance with this

10  act.

11         Section 1535.  Section 636.009, Florida Statutes, is

12  amended to read:

13         636.009  Issuance of certificate of authority;

14  denial.--

15         (1)  Following receipt of an application filed pursuant

16  to s. 636.008, the office department shall review such

17  application and notify the applicant of any deficiencies

18  contained therein. The office department shall issue a

19  certificate of authority to an applicant who has filed a

20  completed application in conformity with s. 636.008, upon

21  payment of the fees specified by s. 636.057 and upon the

22  office department being satisfied that the following

23  conditions are met:

24         (a)  The requirements of s. 636.008 have been

25  fulfilled.

26         (b)  The entity is actuarially sound.

27         (c)  The entity has met the applicable minimum surplus

28  requirements specified in s. 636.045.

29         (d)  The procedures for offering limited health

30  services and offering and terminating contracts to subscribers

31  will not unfairly discriminate on the basis of age, sex, race,

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 1  handicap, health, or economic status. However, this paragraph

 2  does not prohibit reasonable underwriting classifications for

 3  the purposes of establishing contract rates, nor does it

 4  prohibit prospective experience rating.

 5         (e)  The entity furnished evidence of adequate

 6  insurance coverage, including, but not limited to, general

 7  liability or professional liability coverage, or an adequate

 8  plan for self-insurance to respond to claims for injuries

 9  arising out of the furnishing covered services.

10         (f)  The ownership, control, and management of the

11  entity are competent and trustworthy and possess managerial

12  experience that would make the proposed operation beneficial

13  to the subscribers. The office department shall not grant or

14  continue authority to transact the business of a prepaid

15  limited health service organization in this state at any time

16  during which the office department has good reason to believe

17  that the ownership, control, or management of the organization

18  includes any person whose business operations are or have been

19  marked by business practices or conduct that is to the

20  detriment of the public, stockholders, investors, or

21  creditors.

22         (g)  The entity has demonstrated compliance with s.

23  636.047 by obtaining a blanket fidelity bond in the amount of

24  at least $50,000, issued by a licensed insurance carrier in

25  this state, that will reimburse the entity in the event that

26  anyone handling the funds of the entity either misappropriates

27  or absconds with the funds.  All employees handling the funds

28  must be covered by the blanket fidelity bond.  However, the

29  fidelity bond need not cover an individual who owns 100

30  percent of the stock of the organization if such stockholder

31  maintains total control of the organization's financial

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 1  assets, books and records, and fidelity bond coverage is not

 2  available for such individual.  An agent licensed under the

 3  provisions of the Florida Insurance Code may, either directly

 4  or indirectly, represent the prepaid limited health service

 5  organization in the solicitation, negotiation, effectuation,

 6  procurement, receipt, delivery, or forwarding of any

 7  subscriber's contract, or collect or forward any consideration

 8  paid by the subscriber to the prepaid limited health service

 9  organization. The licensed agent shall not be required to post

10  the bond required by this subsection.

11         (h)  The prepaid limited health service organization

12  has a grievance procedure that will facilitate the resolution

13  of subscriber grievances and that includes both formal and

14  informal steps available within the organization.

15         (i)  The applicant is financially responsible and may

16  reasonably be expected to meet its obligations to enrollees

17  and to prospective enrollees. In making this determination,

18  the office department may consider:

19         1.  The financial soundness of the applicant's

20  arrangements for limited health services and the minimum

21  standard rates, deductibles, copayments, and other patient

22  charges used in connection therewith.

23         2.  The adequacy of surplus, other sources of funding,

24  and provisions for contingencies.

25         3.  The manner in which the requirements of s. 636.046

26  have been fulfilled.

27         (j)  The agreements with providers for the provision of

28  limited health services contain the provisions required by s.

29  636.035.

30         (k)  Any deficiencies identified by the office

31  department have been corrected.

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 1         (l)  All requirements of this chapter have been met.

 2         (2)  If the certificate of authority is denied, the

 3  office department shall notify the applicant and shall specify

 4  the reasons for denial in the notice.

 5         Section 1536.  Section 636.015, Florida Statutes, is

 6  amended to read:

 7         636.015  Language used in contracts and advertisements;

 8  translations.--

 9         (1)(a)  All contracts or forms must be printed in

10  English.

11         (b)  If the negotiations leading up to the effectuation

12  of a prepaid limited health service organization contract are

13  conducted in a language other than English, the prepaid

14  limited health service organization must supply to the member

15  a written translation of the contract, which translation

16  accurately reflects the substance of the contract and is in

17  the language used to negotiate the contract. The written

18  translation must be affixed to, and shall become a part of,

19  the contract or form, including a certification that the

20  written translation is identical to the English version. Any

21  such translation must be furnished to the office department as

22  part of the filing of the prepaid limited health services

23  contract form. No translation of a prepaid limited health

24  services contract form may be approved by the office

25  department unless the translation accurately reflects the

26  substance of the prepaid limited health services contract form

27  in translation.

28         (2)  The text of all advertisements by a prepaid

29  limited health service organization, if printed or broadcast

30  in a language other than English, also must be available in

31  English and must be furnished to the office department upon

                                 1886

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 1  request. As used in this subsection, the term "advertisement"

 2  means any advertisement, circular, pamphlet, brochure, or

 3  other printed material disclosing or disseminating advertising

 4  material or information by a prepaid limited health service

 5  organization to prospective or existing subscribers and

 6  includes any radio or television transmittal of an

 7  advertisement or information.

 8         Section 1537.  Paragraph (a) of subsection (1) of

 9  section 636.016, Florida Statutes, is amended to read:

10         636.016  Prepaid limited health service contracts.--For

11  any entity licensed prior to October 1, 1993, all subscriber

12  contracts in force at such time shall be in compliance with

13  this section upon renewal of such contract.

14         (1)  Any entity issued a certificate of authority and

15  otherwise in compliance with this act may enter into contracts

16  in this state to provide an agreed-upon set of limited health

17  services to subscribers in exchange for a prepaid per capita

18  sum or a prepaid aggregate fixed sum.

19         (a)  The office department shall disapprove any form

20  filed under this subsection, or withdraw any previous approval

21  thereof, if the form:

22         1.  Is in any respect in violation of, or does not

23  comply with, any provision of this act or rule adopted

24  thereunder.

25         2.  Contains or incorporates by reference, where such

26  incorporation is otherwise permissible, any inconsistent,

27  ambiguous, or misleading clauses or exceptions and conditions

28  which deceptively affect the risk purported to be assumed in

29  the general coverage of the contract.

30         3.  Has any title, heading, or other indication of its

31  provisions which is misleading.

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 1         4.  Is printed or otherwise reproduced in such a manner

 2  as to render any material provision of the form substantially

 3  illegible.

 4         5.  Contains provisions which are unfair, inequitable,

 5  or contrary to the public policy of this state or which

 6  encourage misrepresentation.

 7         6.  Charges rates that are determined by the office

 8  department to be inadequate, excessive, or unfairly

 9  discriminatory, or if the rating methodology followed by the

10  prepaid limited health service organization is determined by

11  the office department to be inconsistent with the provisions

12  of s. 636.017.

13         Section 1538.  Section 636.017, Florida Statutes, is

14  amended to read:

15         636.017  Rates and charges.--

16         (1)  The rates charged by any prepaid limited health

17  service organization to its subscribers shall not be

18  excessive, inadequate, or unfairly discriminatory. The

19  commission or office department may require whatever

20  information it deems necessary to determine that a rate or

21  proposed rate meets the requirements of this section.

22         (2)  In determining whether a rate is in compliance

23  with subsection (1), the office department must take into

24  consideration the limited services provided, the method in

25  which the services are provided, and the method of provider

26  payment. This section may not be construed as authorizing the

27  commission department to establish by rule minimum loss ratios

28  for prepaid limited health service organizations' rates.

29         Section 1539.  Section 636.018, Florida Statutes, is

30  amended to read:

31  

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 1         636.018  Changes in rates and benefits; material

 2  modifications; addition of limited health services.--

 3         (1)(a)  No prepaid limited health services contract,

 4  certificate of coverage, application, enrollment form, rider,

 5  endorsement, and applicable rates to be charged may be

 6  delivered in this state unless the forms and rates have been

 7  filed with the office department by or on behalf of the

 8  prepaid limited health service organization and have been

 9  approved by the office department. Every form filed shall be

10  identified by a unique form number placed in the lower left

11  corner of each form.  If a prepaid limited health service

12  organization desires to amend any contract with its

13  subscribers or any certificate or member handbook, or desires

14  to change any rate charged for the contract or to change any

15  basic prepaid limited health services contract, certificate,

16  grievance procedure, or member handbook form, or application

17  form where written application is required and is to be made a

18  part of the contract, or printed amendment, addendum, rider,

19  or endorsement form or form renewal certificate, it must file

20  such changes 30 days prior to the effective date of the

21  proposed change.  At least 30 days' written notice must be

22  provided to the subscriber before application of any approved

23  change in rates.  In the case of a group enrollee, there may

24  be a contractual agreement with the prepaid limited health

25  service organization to have the contract holder provide the

26  required notice to the individual enrollees of the group.  Any

27  proposed change must contain information as required by s.

28  636.017.

29         (b)  The prepaid limited health service organization's

30  certification must be prepared by an independent actuary or a

31  qualified employee.  The chief executive officer of the

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 1  prepaid limited health service organization must review and

 2  sign the certification indicating her or his agreement with

 3  its conclusions. Following receipt of notice of any

 4  disapproval or withdrawal of approval, no prepaid limited

 5  health service organization may issue or use any form

 6  disapproved by the office department or as to which the office

 7  department has withdrawn approval.

 8         (2)  If such filings are disapproved, the office

 9  department shall notify the prepaid limited health service

10  organization and shall specify the reasons for disapproval in

11  the notice. The prepaid limited health service organization

12  has 21 days from the date of receipt of notice to request a

13  hearing before the office department pursuant to chapter 120.

14         Section 1540.  Subsection (2) of section 636.025,

15  Florida Statutes, is amended to read:

16         636.025  Validity of noncomplying contracts.--

17         (2)  Any prepaid limited health services contract

18  delivered or issued for delivery in this state covering a

19  subscriber, which subscriber pursuant to the provisions of

20  this act the organization may not lawfully cover under the

21  contract, is cancelable at any time by the organization, any

22  provision of the contract to the contrary notwithstanding, and

23  the organization must promptly cancel the contract in

24  accordance with the request of the office department therefor.

25  No such illegality or cancellation may be deemed to relieve

26  the organization of any liability incurred by it under the

27  contract while in force or to prohibit the organization from

28  retaining the pro rata earned premium or rate thereon. This

29  subsection does not relieve the organization from any penalty

30  otherwise incurred by the organization under this act for any

31  such violation.

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 1         Section 1541.  Subsection (3) of section 636.029,

 2  Florida Statutes, is amended to read:

 3         636.029  Construction and relationship with other

 4  laws.--

 5         (3)  The department and office are is vested with all

 6  powers granted to it under the insurance code with respect to

 7  the investigation of any violation of this act within their

 8  respective regulatory jurisdictions.

 9         Section 1542.  Section 636.036, Florida Statutes, is

10  amended to read:

11         636.036  Administrative, provider, and management

12  contracts.--

13         (1)  The office department may require a prepaid

14  limited health service organization to submit any contract for

15  administrative services, contract with a provider physician,

16  contract for management services, or contract with an

17  affiliated entity to the office department if the office

18  department has information that the prepaid limited health

19  service organization has entered into a contract which

20  requires it to pay a fee which is unreasonably high in

21  relation to the service provided.

22         (2)  After review of a contract, the office department

23  may order the prepaid limited health service organization to

24  cancel the contract if it determines that the fees to be paid

25  by the prepaid limited health service organization under the

26  contract are so unreasonably high as compared with similar

27  contracts entered into by the prepaid limited health service

28  organization in similar circumstances that the contract is

29  detrimental to the subscribers, stockholders, investors, or

30  creditors of the prepaid limited health service organization.

31  

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 1         (3)  All contracts for administrative services,

 2  management services, or provider services or contracts with

 3  affiliated entities, entered into or renewed by a prepaid

 4  limited health service organization on or after October 1,

 5  1993, must contain a provision that the contract will be

 6  canceled upon issuance of an order by the office department

 7  pursuant to this section.

 8         Section 1543.  Section 636.037, Florida Statutes, is

 9  amended to read:

10         636.037  Contract providers.--Each prepaid limited

11  health service organization must, upon the request of the

12  office department, file financial statements for all contract

13  providers of limited health care services who have assumed

14  through capitation or other means more than 10 percent of the

15  health care risks of the prepaid limited health service

16  organization.

17         Section 1544.  Section 636.038, Florida Statutes, is

18  amended to read:

19         636.038  Complaint system; annual report.--

20         (1)  Every prepaid limited health service organization

21  must establish and maintain a complaint system providing

22  reasonable procedures for resolving written complaints

23  initiated by enrollees and providers. This section does not

24  preclude an enrollee or a provider from filing a complaint

25  with the department or office or limit the department's or

26  office's ability to investigate such complaints.

27         (2)  Every prepaid limited health service organization

28  shall report annually to the department and office the total

29  number of grievances handled, a categorization of the cases

30  underlying the grievances, and the final disposition of the

31  grievances.

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 1         Section 1545.  Section 636.039, Florida Statutes, is

 2  amended to read:

 3         636.039  Examination by the office department.--The

 4  office department shall examine the affairs, transactions,

 5  accounts, business records, and assets of any prepaid limited

 6  health service organization, in the same manner and subject to

 7  the same terms and conditions that apply to insurers under

 8  part II of chapter 624, as often as it deems it expedient for

 9  the protection of the people of this state, but not less

10  frequently than once every 3 years. In lieu of making its own

11  financial examination, the office department may accept an

12  independent certified public accountant's audit report

13  prepared on a statutory accounting basis consistent with this

14  act. However, except when the medical records are requested

15  and copies furnished pursuant to s. 456.057, medical records

16  of individuals and records of physicians providing service

17  under contract to the prepaid limited health service

18  organization are not subject to audit, but may be subject to

19  subpoena by court order upon a showing of good cause. For the

20  purpose of examinations, the office department may administer

21  oaths to and examine the officers and agents of a prepaid

22  limited health service organization concerning its business

23  and affairs. The expenses of examination of each prepaid

24  limited health service organization by the office department

25  are subject to the same terms and conditions as apply to

26  insurers under part II of chapter 624.  Expenses of all

27  examinations of a prepaid limited health service organization

28  may never exceed a maximum of $20,000 for any 1-year period.

29         Section 1546.  Section 636.043, Florida Statutes, is

30  amended to read:

31  

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 1         636.043  Annual, quarterly, and miscellaneous

 2  reports.--

 3         (1)  Each prepaid limited health service organization

 4  must file with the office department annually, within 3 months

 5  after the end of its fiscal year, a report verified by the

 6  oath of at least two officers covering the preceding calendar

 7  year.  Any organization licensed prior to October 1, 1993,

 8  shall not be required to file a financial statement, as

 9  required by paragraph (2)(a), based on statutory accounting

10  principles until the first annual report for fiscal years

11  ending after December 31, 1994.

12         (2)  Such report must be on forms prescribed by the

13  commission department and must include:

14         (a)1.  A statutory financial statement of the

15  organization prepared in accordance with statutory accounting

16  principles, including its balance sheet, income statement, and

17  statement of changes in cash flow for the preceding year,

18  certified by an independent certified public accountant, or a

19  consolidated audited financial statement of its parent company

20  prepared on the basis of statutory accounting principles,

21  certified by an independent certified public accountant,

22  attached to which must be consolidating financial statements

23  of the parent company, including the prepaid limited health

24  service organization.

25         2.  Any entity subject to this chapter may make written

26  application to the office department for approval to file

27  audited financial statements prepared in accordance with

28  generally accepted accounting principles in lieu of statutory

29  financial statements. The office department shall approve the

30  application if it finds it to be in the best interest of the

31  subscribers. An application for exemption is required each

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 1  year and must be filed with the office department at least 2

 2  months prior to the end of the fiscal year for which the

 3  exemption is being requested.

 4         (b)  A list of the names and residence addresses of all

 5  persons responsible for the conduct of its affairs, together

 6  with a disclosure of the extent and nature of any contracts or

 7  arrangements between such persons and the prepaid limited

 8  health service organization, including any possible conflicts

 9  of interest.

10         (c)  The number of prepaid limited health services

11  contracts, issued and outstanding, and the number of prepaid

12  limited health services contracts terminated.

13         (d)  The number and amount of damage claims for medical

14  injury initiated against the prepaid limited health service

15  organization, and if known, any of the providers engaged by it

16  during the reporting year, broken down into claims with and

17  without formal legal process, and the disposition, if any, of

18  each such claim.

19         (e)  An actuarial report certified by a qualified

20  independent actuary or qualified employee that:

21         1.  The prepaid limited health service organization is

22  actuarially sound, which certification shall consider the

23  rates, benefits, and expenses of, and any other funds

24  available for, the payment of obligations of the organization.

25         2.  The rates being charged or to be charged are

26  actuarially adequate to the end of the period for which rates

27  have been guaranteed.

28         3.  Incurred but not reported claims and claims

29  reported but not fully paid have been adequately provided for.

30  

31  

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 1         (f)  Such other information relating to the performance

 2  of the prepaid limited health service organization as is

 3  reasonably required by the commission or office department.

 4         (3)  Every prepaid limited health service organization

 5  which fails to file an annual report or quarterly report in

 6  the form and within the time required by this section shall

 7  forfeit up to $500 for each day for the first 10 days during

 8  which the neglect continues and shall forfeit up to $1,000 for

 9  each day after the first 10 days during which the neglect

10  continues; and, upon notice by the office department to that

11  effect, the organization's authority to enroll new subscribers

12  or to do business in this state ceases while such default

13  continues. The office department shall deposit all sums

14  collected by it under this section to the credit of the

15  Insurance Commissioner's Regulatory Trust Fund. The office

16  department may not collect more than $50,000 for each report.

17         (4)  Each authorized prepaid limited health service

18  organization must file a quarterly report for each calendar

19  quarter within 45 days after the end of the quarter.  The

20  report shall contain:

21         (a)  A financial statement prepared in accordance with

22  statutory accounting principles.  Any entity licensed before

23  October 1, 1993, shall not be required to file a financial

24  statement based on statutory accounting principles until the

25  first quarterly filing after the entity files its annual

26  financial statement based on statutory accounting principles

27  as required by subsection (1).

28         (b)  A listing of providers.

29         (c)  Such other information relating to the performance

30  of the prepaid limited health service organization as is

31  reasonably required by the commission or office department.

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 1         (5)  The office department may require monthly reports

 2  if the financial condition of the prepaid limited health

 3  service organization has deteriorated from previous periods or

 4  if the financial condition of the organization is such that it

 5  may be hazardous to subscribers if not monitored more

 6  frequently.

 7         (6)  Each authorized prepaid limited health service

 8  organization shall retain an independent certified public

 9  accountant, hereinafter referred to as "CPA," who agrees by

10  written contract with the prepaid limited health service

11  organization to comply with the provisions of this act.  The

12  contract must state that:

13         (a)  The CPA will provide to the prepaid limited health

14  service organization audited statutory financial statements

15  consistent with this act.

16         (b)  Any determination by the CPA that the prepaid

17  limited health service organization does not meet minimum

18  surplus requirements as set forth in this act will be stated

19  by the CPA, in writing, in the audited financial statement.

20         (c)  The completed workpapers and any written

21  communications between the CPA and the prepaid limited health

22  service organization relating to the audit of the prepaid

23  limited health service organization will be made available for

24  review on a visual-inspection-only basis by the office

25  department at the offices of the prepaid limited health

26  service organization, at the office department, or at any

27  other reasonable place as mutually agreed between the office

28  department and the prepaid limited health service

29  organization. The CPA must retain for review the workpapers

30  and written communications for a period of not less than 6

31  years.

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 1         Section 1547.  Subsection (2) of section 636.045,

 2  Florida Statutes, is amended to read:

 3         636.045  Minimum surplus requirements.--

 4         (2)  The office department may not issue a certificate

 5  of authority unless the prepaid limited health service

 6  organization has a minimum surplus in an amount of $150,000 or

 7  10 percent of liabilities, whichever is the greater amount.

 8         Section 1548.  Subsections (1) and (2) of section

 9  636.046, Florida Statutes, are amended to read:

10         636.046  Insolvency protection.--

11         (1)  Except as required in subsection (2), each prepaid

12  limited health service organization must deposit with the

13  department cash or securities of the type eligible under s.

14  641.35 which must have at all times a market value in the

15  amount set forth in this subsection. The amount of the deposit

16  shall be reviewed annually or more often as the office

17  department deems necessary. The market value of the deposit

18  must be $50,000.

19         (2)(a)  If securities or assets deposited by a prepaid

20  limited health service organization under this act are subject

21  to material fluctuations in market value, the office

22  department may in its discretion require the organization to

23  deposit and maintain on deposit additional securities or

24  assets in an amount as may be reasonably necessary to assure

25  that the deposit will at all times have a market value of not

26  less than the amount specified under this section.

27         (b)  If for any reason the market value of assets and

28  securities of a prepaid limited health service organization

29  held on deposit under this act falls below the amount

30  required, the organization must promptly deposit other or

31  additional assets or securities eligible for deposit

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 1  sufficient to cure the deficiency. If the prepaid limited

 2  health service organization has failed to cure the deficiency

 3  within 30 days after receipt of notice by certified mail from

 4  the office department, the office department may revoke the

 5  certificate of authority of the prepaid limited health service

 6  organization.

 7         (c)  A prepaid limited health service organization may,

 8  at its option, deposit assets or securities in an amount

 9  exceeding its deposit required or otherwise permitted under

10  this act for the purpose of absorbing fluctuations in the

11  value of securities and assets deposited and to facilitate the

12  exchange and substitution of securities and assets.  During

13  the solvency of the prepaid limited health service

14  organization any excess must be released to the organization

15  upon its request.  During the insolvency of the prepaid

16  limited health service organization, any excess deposit may be

17  released only as provided in s. 625.62.

18         Section 1549.  Section 636.047, Florida Statutes, is

19  amended to read:

20         636.047  Officers' and employees' fidelity bond.--

21         (1)  A prepaid limited health service organization must

22  maintain in force a fidelity bond in its own name on its

23  officers and employees, in an amount not less than $50,000 or

24  in any other amount prescribed by the commission department.

25  Except as otherwise provided by this subsection, the bond must

26  be issued by an insurance company that is licensed to do

27  business in this state.

28         (2)  In lieu of the bond specified in subsection (1), a

29  prepaid limited health service organization may deposit with

30  the department cash or securities or other investments of the

31  types set forth in s. 636.042. Such a deposit must be

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 1  maintained in joint custody with the department commissioner

 2  in the amount and subject to the same conditions required for

 3  a bond under this subsection.

 4         Section 1550.  Section 636.048, Florida Statutes, is

 5  amended to read:

 6         636.048  Suspension or revocation of certificate of

 7  authority; suspension of enrollment of new subscribers; terms

 8  of suspension.--

 9         (1)  The office department may suspend the authority of

10  a prepaid limited health service organization to enroll new

11  subscribers or revoke any certificate issued to a prepaid

12  limited health service organization or order compliance within

13  30 days, if it finds that any of the following conditions

14  exist:

15         (a)  The organization is not operating in compliance

16  with this act.

17         (b)  The plan is no longer actuarially sound or the

18  organization does not have the minimum surplus as required by

19  this act.

20         (c)  The organization has advertised, merchandised, or

21  attempted to merchandise its services in such a manner as to

22  misrepresent its services or capacity for service or has

23  engaged in deceptive, misleading, or unfair practices with

24  respect to advertising or merchandising.

25         (d)  The organization is insolvent.

26         (e)  The prepaid limited health service organization is

27  operating significantly in contravention of its basic

28  organizational document or in a manner contrary to that

29  described in and reasonably inferred from any other

30  information submitted pursuant to ss. 636.008 and 636.009,

31  

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 1  unless amendments to such submissions have been filed with and

 2  approved by the office department.

 3         (f)  The prepaid limited health service organization is

 4  unable to fulfill its obligations to furnish limited health

 5  services.

 6         (g)  The prepaid limited health service organization

 7  has no subscribers 12 months after the issuance of the

 8  certificate of authority.

 9         (h)  The continued operation of the prepaid limited

10  health service organization would be hazardous to its

11  enrollees.

12         (2)  If the office department has cause to believe that

13  grounds for the suspension or revocation of a certificate of

14  authority exist, it shall notify the prepaid limited health

15  service organization in writing specifically stating the

16  grounds for suspension or revocation and shall pursue a

17  hearing on the matter in accordance with the provisions of

18  chapter 120.

19         (3)  When the certificate of authority of a prepaid

20  limited health service organization is surrendered or revoked,

21  such organization must proceed, immediately following the

22  effective date of the order of revocation, to wind up its

23  affairs transacted under the certificate of authority.  It may

24  not engage in any further advertising, solicitation, or

25  renewal of contracts. The office department may, by written

26  order, permit such further operation of the organization as it

27  finds to be in the best interest of enrollees, so that

28  enrollees will be afforded the greatest practical opportunity

29  to obtain continuing limited health services.

30         (4)  The office department shall, in its order

31  suspending the authority of a prepaid limited health service

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 1  organization to enroll new subscribers, specify the period

 2  during which the suspension is to be in effect and the

 3  conditions, if any, which must be met by the prepaid limited

 4  health service organization prior to reinstatement of its

 5  authority to enroll new subscribers. The order of suspension

 6  is subject to rescission or modification by further order of

 7  the office department prior to the expiration of the

 8  suspension period. Reinstatement may not be made unless

 9  requested by the prepaid limited health service organization;

10  however, the office department may not grant reinstatement if

11  it finds that the circumstances for which the suspension

12  occurred still exist or are likely to recur.

13         Section 1551.  Section 636.049, Florida Statutes, is

14  amended to read:

15         636.049  Administrative penalty in lieu of suspension

16  or revocation.--In lieu of suspending or revoking a

17  certificate of authority, or when no penalty is specifically

18  provided, whenever any prepaid limited health service

19  organization or other person, corporation, partnership, or

20  entity subject to this act has been found to have violated any

21  provision of this act, the office or department, within its

22  respective regulatory jurisdiction, may:

23         (1)  Issue and cause to be served upon the

24  organization, person, or entity charged with the violation a

25  copy of such findings and an order requiring such

26  organization, person, or entity to cease and desist from

27  engaging in the act or practice which constitutes the

28  violation.

29         (2)  Impose a monetary penalty of not less than $100

30  for each violation, but not to exceed an aggregate penalty of

31  $100,000.

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 1         Section 1552.  Section 636.052, Florida Statutes, is

 2  amended to read:

 3         636.052  Civil remedy.--In any civil action brought to

 4  enforce the terms and conditions of a prepaid limited health

 5  service organization contract, the prevailing party is

 6  entitled to recover reasonable attorney's fees and court

 7  costs. This section does not authorize a civil action against

 8  the office or department, its employees, or the commissioner

 9  or against the Agency for Health Care Administration, its

10  employees, or the director of that agency.

11         Section 1553.  Section 636.053, Florida Statutes, is

12  amended to read:

13         636.053  Injunction.--In addition to the penalties and

14  other enforcement provisions of this act, the office

15  department is vested with the power to seek both temporary and

16  permanent injunctive relief when:

17         (1)  A prepaid limited health service organization is

18  being operated by any person or entity without a subsisting

19  certificate of authority.

20         (2)  Any person, entity, or prepaid limited health

21  service organization has engaged in any activity prohibited by

22  this act or any rule adopted pursuant thereto.

23         (3)  Any prepaid limited health service organization,

24  person, or entity is renewing, issuing, or delivering a

25  prepaid limited health services contract without a subsisting

26  certificate of authority.

27  

28  The office's or department's authority to seek injunctive

29  relief is not conditioned on having conducted any proceeding

30  pursuant to chapter 120.

31  

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 1         Section 1554.  Section 636.055, Florida Statutes, is

 2  amended to read:

 3         636.055  Levy upon deposit limited.--No judgment

 4  creditor or other claimant, other than the office department,

 5  of a prepaid limited health service organization shall have

 6  the right to levy upon any of the assets or securities held in

 7  this state as a deposit under s. 636.046.

 8         Section 1555.  Subsection (1) of section 636.056,

 9  Florida Statutes, is amended to read:

10         636.056  Rehabilitation, conservation, liquidation, or

11  reorganization; exclusive methods of remedy.--

12         (1)  A delinquency proceeding under part I of chapter

13  631 or supervision by the department pursuant to ss.

14  624.80-624.87 constitute the sole and exclusive means of

15  liquidating, reorganizing, rehabilitating, or conserving a

16  prepaid limited health service organization.

17         Section 1556.  Section 636.057, Florida Statutes, is

18  amended to read:

19         636.057  Fees.--Every prepaid limited health service

20  organization subject to this act must pay to the office

21  department the following fees:

22         (1)  For filing an application for a certificate of

23  authority or amendment thereto: $500.

24         (2)  For filing each annual report:  $200.

25         (3)  For each renewal of certificate of authority:

26  $500.

27         Section 1557.  Section 636.058, Florida Statutes, is

28  amended to read:

29         636.058  Investigative power of department and

30  office.--The department and office, within their respective

31  regulatory jurisdictions, have has the power to examine and

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 1  investigate the affairs of every person, entity, or prepaid

 2  limited health service organization in order to determine

 3  whether the person, entity, or prepaid limited health service

 4  organization is operating in accordance with the provisions of

 5  this act or has been or is engaged in any unfair method of

 6  competition or in any unfair or deceptive act or practice

 7  prohibited by s. 641.3903. The office department also has the

 8  powers enumerated in ss. 641.3907, 641.3909, and 641.3913.

 9         Section 1558.  Section 636.062, Florida Statutes, is

10  amended to read:

11         636.062  Appeals from the office or department.--Any

12  person, entity, or prepaid limited health service organization

13  subject to an order of the office or department under s.

14  641.3909 or s. 641.3913 may obtain a review of the order by

15  filing an appeal therefrom in accordance with the provisions

16  and procedures for appeal under s. 120.68.

17         Section 1559.  Section 636.063, Florida Statutes, is

18  amended to read:

19         636.063  Civil liability.--The provisions of this act

20  are cumulative to rights under the general civil and common

21  law, and no action of the office or department abrogates such

22  rights to damage or other relief in any court.

23         Section 1560.  Subsection (3) of section 636.064,

24  Florida Statutes, is amended to read:

25         636.064  Confidentiality.--

26         (3)  Any information obtained or produced by the

27  department or office pursuant to an examination or

28  investigation is confidential and exempt from the provisions

29  of s. 119.07(1) and s. 24(a), Art. I of the State Constitution

30  until the examination report has been filed pursuant to s.

31  624.319 or until such investigation is completed or ceases to

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 1  be active. For purposes of this subsection, an investigation

 2  is considered "active" while such investigation is being

 3  conducted by the department or office with a reasonable, good

 4  faith belief that it may lead to the filing of administrative,

 5  civil, or criminal proceedings. An investigation does not

 6  cease to be active if the department or office is proceeding

 7  with reasonable dispatch and there is a good faith belief that

 8  action may be initiated by the department or office or other

 9  administrative or law enforcement agency. Except for active

10  criminal intelligence or criminal investigative information,

11  as defined in s. 119.011; personal financial and medical

12  information; information that would defame or cause

13  unwarranted damage to the good name or reputation of an

14  individual; information that would impair the safety and

15  financial soundness of the licensee or affiliated party;

16  proprietary financial information; or information that would

17  reveal the identity of a confidential source, all information

18  obtained by the department or office pursuant to an

19  examination or investigation shall be available after the

20  examination report has been filed or the investigation is

21  completed or ceases to be active.

22         Section 1561.  Section 636.067, Florida Statutes, is

23  amended to read:

24         636.067  Rules.--The commission may department has

25  authority to adopt rules pursuant to ss. 120.536(1) and 120.54

26  to implement the provisions of this act.  A violation of any

27  such rule subjects the violator to the provisions of s.

28  636.048.

29         Section 1562.  Section 641.185, Florida Statutes, is

30  amended to read:

31  

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 1         641.185  Health maintenance organization subscriber

 2  protections.--

 3         (1)  With respect to the provisions of this part and

 4  part III, the principles expressed in the following statements

 5  shall serve as standards to be followed by the commission, the

 6  office, the department, of Insurance and the Agency for Health

 7  Care Administration in exercising their powers and duties, in

 8  exercising administrative discretion, in administrative

 9  interpretations of the law, in enforcing its provisions, and

10  in adopting rules:

11         (a)  A health maintenance organization shall ensure

12  that the health care services provided to its subscribers

13  shall be rendered under reasonable standards of quality of

14  care which are at a minimum consistent with the prevailing

15  standards of medical practice in the community pursuant to ss.

16  641.495(1) and 641.51.

17         (b)  A health maintenance organization subscriber

18  should receive quality health care from a broad panel of

19  providers, including referrals, preventive care pursuant to s.

20  641.402(1), emergency screening and services pursuant to ss.

21  641.31(12) and 641.513, and second opinions pursuant to s.

22  641.51.

23         (c)  A health maintenance organization subscriber

24  should receive assurance that the health maintenance

25  organization has been independently accredited by a national

26  review organization pursuant to s. 641.512, and is financially

27  secure as determined by the state pursuant to ss. 641.221,

28  641.225, and 641.228.

29         (d)  A health maintenance organization subscriber

30  should receive continuity of health care, even after the

31  

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 1  provider is no longer with the health maintenance organization

 2  pursuant to s. 641.51(8).

 3         (e)  A health maintenance organization subscriber

 4  should receive timely, concise information regarding the

 5  health maintenance organization's reimbursement to providers

 6  and services pursuant to ss. 641.31 and 641.31015 and should

 7  receive prompt payment from the organization pursuant to s.

 8  641.3155.

 9         (f)  A health maintenance organization subscriber

10  should receive the flexibility to transfer to another Florida

11  health maintenance organization, regardless of health status,

12  pursuant to ss. 641.228, 641.3104, 641.3107, 641.3111,

13  641.3921, and 641.3922.

14         (g)  A health maintenance organization subscriber

15  should be eligible for coverage without discrimination against

16  individual participants and beneficiaries of group plans based

17  on health status pursuant to s. 641.31073.

18         (h)  A health maintenance organization that issues a

19  group health contract must: provide coverage for preexisting

20  conditions pursuant to s. 641.31071; guarantee renewability of

21  coverage pursuant to s. 641.31074; provide notice of

22  cancellation pursuant to s. 641.3108; provide extension of

23  benefits pursuant to s. 641.3111; provide for conversion on

24  termination of eligibility pursuant to s. 641.3921; and

25  provide for conversion contracts and conditions pursuant to s.

26  641.3922.

27         (i)  A health maintenance organization subscriber

28  should receive timely and, if necessary, urgent grievances and

29  appeals within the health maintenance organization pursuant to

30  ss. 641.228, 641.31(5), 641.47, and 641.511.

31  

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 1         (j)  A health maintenance organization should receive

 2  timely and, if necessary, urgent review by an independent

 3  state external review organization for unresolved grievances

 4  and appeals pursuant to s. 408.7056.

 5         (k)  A health maintenance organization subscriber shall

 6  be given written notice at least 30 days in advance of a rate

 7  change pursuant to s. 641.31(3)(b). In the case of a group

 8  member, there may be a contractual agreement with the health

 9  maintenance organization to have the employer provide the

10  required notice to the individual members of the group

11  pursuant to s. 641.31(3)(b).

12         (l)  A health maintenance organization subscriber shall

13  be given a copy of the applicable health maintenance contract,

14  certificate, or member handbook specifying: all the

15  provisions, disclosure, and limitations required pursuant to

16  s. 641.31(1) and (4); the covered services, including those

17  services, medical conditions, and provider types specified in

18  ss. 641.31, 641.31094, 641.31095, 641.31096, 641.51(11), and

19  641.513; and where and in what manner services may be obtained

20  pursuant to s. 641.31(4).

21         (2)  This section shall not be construed as creating a

22  civil cause of action by any subscriber or provider against

23  any health maintenance organization.

24         Section 1563.  Section 641.19, Florida Statutes, is

25  amended to read:

26         641.19  Definitions.--As used in this part, the term:

27         (1)  "Affiliate" means any entity that which exercises

28  control over or is controlled by the health maintenance

29  organization, directly or indirectly, through:

30         (a)  Equity ownership of voting securities;

31         (b)  Common managerial control; or

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 1         (c)  Collusive participation by the management of the

 2  health maintenance organization and affiliate in the

 3  management of the health maintenance organization or the

 4  affiliate.

 5         (2)  "Agency" means the Agency for Health Care

 6  Administration.

 7         (3)  "Capitation" means the fixed amount paid by an HMO

 8  to a health care provider under contract with the health

 9  maintenance organization in exchange for the rendering of

10  covered medical services.

11         (4)  "Comprehensive health care services" means

12  services, medical equipment, and supplies furnished by a

13  provider, which may include, but which are not limited to,

14  medical, surgical, and dental care; psychological, optometric,

15  optic, chiropractic, podiatric, nursing, physical therapy, and

16  pharmaceutical services; health education, preventive medical,

17  rehabilitative, and home health services; inpatient and

18  outpatient hospital services; extended care; nursing home

19  care; convalescent institutional care; technical and

20  professional clinical pathology laboratory services;

21  laboratory and ambulance services; appliances, drugs,

22  medicines, and supplies; and any other care, service, or

23  treatment of disease, or correction of defects for human

24  beings.

25         (5)  "Copayment" means a specific dollar amount, except

26  as otherwise provided for by statute, that the subscriber must

27  pay upon receipt of covered health care services.  Copayments

28  may not be established in an amount that will prevent a person

29  from receiving a covered service or benefit as specified in

30  the subscriber contract approved by the office department.

31         (6)  "Department" means the Department of Insurance.

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 1         (6)(7)  "Emergency medical condition" means:

 2         (a)  A medical condition manifesting itself by acute

 3  symptoms of sufficient severity, which may include severe pain

 4  or other acute symptoms, such that the absence of immediate

 5  medical attention could reasonably be expected to result in

 6  any of the following:

 7         1.  Serious jeopardy to the health of a patient,

 8  including a pregnant woman or a fetus.

 9         2.  Serious impairment to bodily functions.

10         3.  Serious dysfunction of any bodily organ or part.

11         (b)  With respect to a pregnant woman:

12         1.  That there is inadequate time to effect safe

13  transfer to another hospital prior to delivery;

14         2.  That a transfer may pose a threat to the health and

15  safety of the patient or fetus; or

16         3.  That there is evidence of the onset and persistence

17  of uterine contractions or rupture of the membranes.

18         (7)(8)  "Emergency services and care" means medical

19  screening, examination, and evaluation by a physician, or, to

20  the extent permitted by applicable law, by other appropriate

21  personnel under the supervision of a physician, to determine

22  if an emergency medical condition exists and, if it does, the

23  care, treatment, or surgery for a covered service by a

24  physician necessary to relieve or eliminate the emergency

25  medical condition, within the service capability of a

26  hospital.

27         (8)(9)  "Entity" means any legal entity with continuing

28  existence, including, but not limited to, a corporation,

29  association, trust, or partnership.

30         (9)(10)  "Geographic area" means the county or

31  counties, or any portion of a county or counties, within which

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 1  the health maintenance organization provides or arranges for

 2  comprehensive health care services to be available to its

 3  subscribers.

 4         (10)(11)  "Guaranteeing organization" is an

 5  organization that which is domiciled in the United States;

 6  that which has authorized service of process against it; and

 7  that which has appointed the Chief Financial Officer Insurance

 8  Commissioner and Treasurer as its agent for service of process

 9  issuing upon any cause of action arising in this state, based

10  upon any guarantee entered into under this part.

11         (11)(12)  "Health maintenance contract" means any

12  contract entered into by a health maintenance organization

13  with a subscriber or group of subscribers to provide

14  comprehensive health care services in exchange for a prepaid

15  per capita or prepaid aggregate fixed sum.

16         (12)(13)  "Health maintenance organization" means any

17  organization authorized under this part which:

18         (a)  Provides emergency care, inpatient hospital

19  services, physician care including care provided by physicians

20  licensed under chapters 458, 459, 460, and 461, ambulatory

21  diagnostic treatment, and preventive health care services;

22         (b)  Provides, either directly or through arrangements

23  with other persons, health care services to persons enrolled

24  with such organization, on a prepaid per capita or prepaid

25  aggregate fixed-sum basis;

26         (c)  Provides, either directly or through arrangements

27  with other persons, comprehensive health care services which

28  subscribers are entitled to receive pursuant to a contract;

29         (d)  Provides physician services, by physicians

30  licensed under chapters 458, 459, 460, and 461, directly

31  through physicians who are either employees or partners of

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 1  such organization or under arrangements with a physician or

 2  any group of physicians; and

 3         (e)  If offering services through a managed care

 4  system, then the managed care system must be a system in which

 5  a primary physician licensed under chapter 458 or chapter 459

 6  and chapters 460 and 461 is designated for each subscriber

 7  upon request of a subscriber requesting service by a physician

 8  licensed under any of those chapters, and is responsible for

 9  coordinating the health care of the subscriber of the

10  respectively requested service and for referring the

11  subscriber to other providers of the same discipline when

12  necessary.  Each female subscriber may select as her primary

13  physician an obstetrician/gynecologist who has agreed to serve

14  as a primary physician and is in the health maintenance

15  organization's provider network.

16         (13)(14)  "Insolvent" or "insolvency" means that all

17  the statutory assets of the health maintenance organization,

18  if made immediately available, would not be sufficient to

19  discharge all of its liabilities or that the health

20  maintenance organization is unable to pay its debts as they

21  become due in the usual course of business.  In the event that

22  all the assets of the health maintenance organization, if made

23  immediately available, would not be sufficient to discharge

24  all of its liabilities, but the organization has a written

25  guarantee of the type and subject to the same provisions as

26  outlined in s. 641.225, the organization shall not be

27  considered insolvent unless it is unable to pay its debts as

28  they become due in the usual course of business.

29         (14)(15)  "Provider" means any physician, hospital, or

30  other institution, organization, or person that furnishes

31  

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 1  health care services and is licensed or otherwise authorized

 2  to practice in the state.

 3         (15)(16)  "Reporting period" means the annual calendar

 4  year accounting period or any part thereof.

 5         (16)(17)  "Statutory accounting principles" means

 6  accounting principles as defined in the National Association

 7  of Insurance Commissioners Accounting Practices and Procedures

 8  Manual as of 2002 effective January 1, 2001.

 9         (17((18)  "Subscriber" means an entity or individual

10  who has contracted, or on whose behalf a contract has been

11  entered into, with a health maintenance organization for

12  health care services or other persons who also receive health

13  care services as a result of the contract.

14         (18)(19)  "Surplus" means total statutory assets in

15  excess of total liabilities, except that assets pledged to

16  secure debts not reflected on the books of the health

17  maintenance organization shall not be included in surplus.

18  Surplus includes capital stock, capital in excess of par,

19  other contributed capital, retained earnings, and surplus

20  notes.

21         (19)(20)  "Uncovered expenditures" means the cost of

22  health care services that are covered by a health maintenance

23  organization, for which a subscriber would also be liable in

24  the event of the insolvency of the organization.

25         (20)(21)  "Health care risk contract" means a contract

26  under which an individual or entity receives consideration or

27  other compensation in an amount greater than 1 percent of the

28  health maintenance organization's annual gross written premium

29  in exchange for providing to the health maintenance

30  organization a provider network or other services, which may

31  include administrative services. The 1-percent threshold shall

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 1  be calculated on a contract-by-contract basis for each such

 2  individual or entity and not in the aggregate for all health

 3  care risk contracts.

 4         Section 1564.  Section 641.2017, Florida Statutes, is

 5  amended to read:

 6         641.2017  Insurance business not authorized.--Nothing

 7  in the Florida Insurance Code or this part shall be deemed to

 8  authorize any health maintenance organization to transact any

 9  insurance business other than that of health maintenance

10  organization type insurance or otherwise to engage in any

11  other type of insurance unless it is authorized under a

12  certificate of authority issued by the office department under

13  the provisions of the Florida Insurance Code.  However, a

14  health maintenance organization may by contract:

15         (1)  Enter into arrangements whereby the expected cost

16  of health care services provided directly or through

17  arrangements with other persons by the health maintenance

18  organization is self-funded by the person contracting with the

19  health maintenance organization, but the health maintenance

20  organization assumes the risks that costs will exceed that

21  amount on a prepaid per capita or prepaid aggregate fixed-sum

22  basis; or

23         (2)  Enter into arrangements whereby the cost of health

24  care services provided directly or through arrangements with

25  other persons by the health maintenance organization is

26  self-funded by the person contracting with the health

27  maintenance organization.

28         Section 1565.  Subsections (1) and (2) of section

29  641.2018, Florida Statutes, are amended to read:

30         641.2018  Limited coverage for home health care

31  authorized.--

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 1         (1)  Notwithstanding other provisions of this chapter,

 2  a health maintenance organization may issue a contract that

 3  limits coverage to home health care services only.  The

 4  organization and the contract shall be subject to all of the

 5  requirements of this part that do not require or otherwise

 6  apply to specific benefits other than home care services.  To

 7  this extent, all of the requirements of this part apply to any

 8  organization or contract that limits coverage to home care

 9  services, except the requirements for providing comprehensive

10  health care services as provided in ss. 641.19(4), (11), and

11  (12), and (13), and 641.31(1), except ss. 641.31(9), (12),

12  (17), (18), (19), (20), (21), and (24) and 641.31095.

13         (2)  Notwithstanding the other provisions of this

14  chapter, a health maintenance organization may apply for and

15  obtain a certificate of authority from the office department

16  pursuant to this part and a health care provider certificate

17  pursuant to part III, which certificate limits the authority

18  of the organization to the issuance of contracts that limit

19  coverage to home health care services pursuant to subsection

20  (1).  In addition to all applicable requirements of this part,

21  as specified in subsection (1), all of the requirements of

22  part III apply to an organization applying for such a limited

23  certificate, except to the extent that such requirements

24  directly conflict with the limited nature of the coverage

25  provided.

26         Section 1566.  Subsections (1) and (2) of section

27  641.21, Florida Statutes, are amended to read:

28         641.21  Application for certificate.--

29         (1)  Before any entity may operate a health maintenance

30  organization, it shall obtain a certificate of authority from

31  the office department. The office department shall accept and

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 1  shall begin its review of an application for a certificate of

 2  authority anytime after an organization has filed an

 3  application for a health care provider certificate pursuant to

 4  part III of this chapter.  However, the office may department

 5  shall not issue a certificate of authority to any applicant

 6  which does not possess a valid health care provider

 7  certificate issued by the agency. Each application for a

 8  certificate shall be on such form as the commission department

 9  shall prescribe, shall be verified by the oath of two officers

10  of the corporation and properly notarized, and shall be

11  accompanied by the following:

12         (a)  A copy of the articles of incorporation and all

13  amendments thereto;

14         (b)  A copy of the bylaws, rules and regulations, or

15  similar form of document, if any, regulating the conduct of

16  the affairs of the applicant;

17         (c)  A list of the names, addresses, and official

18  capacities with the organization of the persons who are to be

19  responsible for the conduct of the affairs of the health

20  maintenance organization, including all officers, directors,

21  and owners of in excess of 5 percent of the common stock of

22  the corporation.  Such persons shall fully disclose to the

23  office department and the directors of the health maintenance

24  organization the extent and nature of any contracts or

25  arrangements between them and the health maintenance

26  organization, including any possible conflicts of interest;

27         (d)  A complete biographical statement on forms

28  prescribed by the commission department, and an independent

29  investigation report and fingerprints obtained pursuant to

30  chapter 624, of all of the individuals referred to in

31  paragraph (c);

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 1         (e)  A statement generally describing the health

 2  maintenance organization, its operations, and its grievance

 3  procedures;

 4         (f)  Forms of all health maintenance contracts,

 5  certificates, and member handbooks the applicant proposes to

 6  offer the subscribers, showing the benefits to which they are

 7  entitled, together with a table of the rates charged, or

 8  proposed to be charged, for each form of such contract.  A

 9  certified actuary shall:

10         1.  Certify that the rates are neither inadequate nor

11  excessive nor unfairly discriminatory;

12         2.  Certify that the rates are appropriate for the

13  classes of risks for which they have been computed; and

14         3.  File an adequate description of the rating

15  methodology showing that such methodology follows consistent

16  and equitable actuarial principles;

17         (g)  A statement describing with reasonable certainty

18  the geographic area or areas to be served by the health

19  maintenance organization;

20         (h)  As to any applicant whose business plan indicates

21  that it will receive Medicaid funds, a list of all contracts

22  and agreements and any information relative to any payment or

23  agreement to pay, directly or indirectly, a consultant fee, a

24  broker fee, a commission, or other fee or charge related in

25  any way to the application for a certificate of authority or

26  the issuance of a certificate of authority, including, but not

27  limited to, the name of the person or entity paying the fee;

28  the name of the person or entity receiving the fee; the date

29  of payment; and a brief description of the work performed.

30  The contract, agreement, and related information shall, if

31  requested, be provided to the office department.

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 1         (i)  An audited financial statement prepared on the

 2  basis of statutory accounting principles and certified by an

 3  independent certified public accountant, except that surplus

 4  notes acceptable to the office department and meeting the

 5  requirements of this act shall be included in the calculation

 6  of surplus; and

 7         (j)  Such additional reasonable data, financial

 8  statements, and other pertinent information as the

 9  commissioner or office requires department may require with

10  respect to the determination that the applicant can provide

11  the services to be offered.

12         (2)  After submission of the application for a

13  certificate of authority, the entity may engage in initial

14  group marketing activities solely with respect to employers,

15  representatives of labor unions, professional associations,

16  and trade associations, so long as it does not enter into,

17  issue, deliver, or otherwise effectuate health maintenance

18  contracts, effectuate or bind coverage or benefits, provide

19  health care services, or collect premiums or charges until it

20  has been issued a certificate of authority by the office

21  department.  Any such activities, oral or written, shall

22  include a statement that the entity does not possess a valid

23  certificate of authority and cannot enter into health

24  maintenance contracts until such time as it has been issued a

25  certificate of authority by the office department.

26         Section 1567.  Section 641.215, Florida Statutes, is

27  amended to read:

28         641.215  Conditions precedent to issuance or

29  maintenance of certificate of authority; effect of bankruptcy

30  proceedings.--

31  

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 1         (1)  As a condition precedent to the issuance or

 2  maintenance of a certificate of authority, a health

 3  maintenance organization insurer must file or have on file

 4  with the office department:

 5         (a)  An acknowledgment that a delinquency proceeding

 6  pursuant to part I of chapter 631, or supervision by the

 7  office department pursuant to ss. 624.80-624.87, constitutes

 8  the sole and exclusive method for the liquidation,

 9  rehabilitation, reorganization, or conservation of a health

10  maintenance organization.

11         (b)  A waiver of any right to file or be subject to a

12  bankruptcy proceeding.

13         (2)  The commencement of a bankruptcy proceeding either

14  by or against a health maintenance organization shall, by

15  operation of law:

16         (a)  Terminate the health maintenance organization's

17  certificate of authority.

18         (b)  Vest in the office department for the use and

19  benefit of the subscribers of the health maintenance

20  organization the title to any deposits of the insurer held by

21  the department.

22  

23  If the proceeding is initiated by a party other than the

24  health maintenance organization, the operation of subsection

25  (2) shall be stayed for a period of 60 days following the date

26  of commencement of the proceeding.

27         Section 1568.  Section 641.22, Florida Statutes, is

28  amended to read:

29         641.22  Issuance of certificate of authority.--The

30  office department shall issue a certificate of authority to

31  any entity filing a completed application in conformity with

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 1  s. 641.21, upon payment of the prescribed fees and upon the

 2  office's department's being satisfied that:

 3         (1)  As a condition precedent to the issuance of any

 4  certificate, the entity has obtained a health care provider

 5  certificate from the Agency for Health Care Administration

 6  pursuant to part III of this chapter.

 7         (2)  The health maintenance organization is actuarially

 8  sound.

 9         (3)  The entity has met the applicable requirements

10  specified in s. 641.225.

11         (4)  The procedures for offering comprehensive health

12  care services and offering and terminating contracts to

13  subscribers will not unfairly discriminate on the basis of

14  age, sex, race, health, or economic status.  However, this

15  section does not prohibit reasonable underwriting

16  classifications for the purposes of establishing contract

17  rates, nor does it prohibit experience rating.

18         (5)  The entity furnishes evidence of adequate

19  insurance coverage or an adequate plan for self-insurance to

20  respond to claims for injuries arising out of the furnishing

21  of comprehensive health care.

22         (6)  The ownership, control, and management of the

23  entity is competent and trustworthy and possesses managerial

24  experience that would make the proposed health maintenance

25  organization operation beneficial to the subscribers.  The

26  office department shall not grant or continue authority to

27  transact the business of a health maintenance organization in

28  this state at any time during which the office department has

29  good reason to believe that:

30         (a)  The ownership, control, or management of the

31  organization includes any person:

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 1         1.  Who is incompetent or untrustworthy;

 2         2.  Who is so lacking in health maintenance

 3  organization expertise as to make the operation of the health

 4  maintenance organization hazardous to potential and existing

 5  subscribers;

 6         3.  Who is so lacking in health maintenance

 7  organization experience, ability, and standing as to

 8  jeopardize the reasonable promise of successful operation;

 9         4.  Who is affiliated, directly or indirectly, through

10  ownership, control, reinsurance transactions, or other

11  business relations, with any person whose business operations

12  are or have been marked by business practices or conduct that

13  is to the detriment of the public, stockholders, investors, or

14  creditors; or

15         5.  Whose business operations are or have been marked

16  by business practices or conduct that is to the detriment of

17  the public, stockholders, investors, or creditors;

18         (b)  Any person, including any stock subscriber,

19  stockholder, or incorporator, who exercises or has the ability

20  to exercise effective control of the organization, or who

21  influences or has the ability to influence the transaction of

22  the business of the health maintenance organization, does not

23  possess the financial standing and business experience for the

24  successful operation of the health maintenance organization;

25         (c)  Any person, including any stock subscriber,

26  stockholder, or incorporator, who exercises or has the ability

27  to exercise effective control of the organization, or who

28  influences or has the ability to influence the transaction of

29  the business of the health maintenance organization, has been

30  found guilty of, or has pled guilty or no contest to, any

31  felony or crime punishable by imprisonment of 1 year or more

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 1  under the laws of the United States or any state thereof or

 2  under the laws of any other country, which involves moral

 3  turpitude, without regard to whether a judgment or conviction

 4  has been entered by the court having jurisdiction in such

 5  case. However, in the case of a health maintenance

 6  organization operating under a subsisting certificate of

 7  authority, the health maintenance organization shall remove

 8  any such person immediately upon discovery of the conditions

 9  set forth in this paragraph when applicable to such person or

10  under the order of the office department, and the failure to

11  so act by the organization is grounds for revocation or

12  suspension of the health maintenance organization's

13  certificate of authority; or

14         (d)  Any person, including any stock subscriber,

15  stockholder, or incorporator, who exercises or has the ability

16  to exercise effective control of the organization, or who

17  influences or has the ability to influence the transaction of

18  the business of the health maintenance organization, is now or

19  was in the past affiliated, directly or indirectly, through

20  ownership interest of 10 percent or more, control, or

21  reinsurance transactions, with any business, corporation, or

22  other entity that has been found guilty of or has pleaded

23  guilty or nolo contendere to any felony or crime punishable by

24  imprisonment for 1 year or more under the laws of the United

25  States, any state, or any other country, regardless of

26  adjudication. In the case of a health maintenance organization

27  operating under a subsisting certificate of authority, the

28  health maintenance organization shall immediately remove such

29  person or immediately notify the office department of such

30  person upon discovery of the conditions set forth in this

31  paragraph, either when applicable to such person or upon order

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 1  of the office department. The failure to remove such person,

 2  provide such notice, or comply with such order constitutes

 3  grounds for suspension or revocation of the health maintenance

 4  organization's certificate of authority.

 5         (7)  The entity has a blanket fidelity bond in the

 6  amount of $100,000, issued by a licensed insurance carrier in

 7  this state, that will reimburse the entity in the event that

 8  anyone handling the funds of the entity either misappropriates

 9  or absconds with the funds.  All employees handling the funds

10  shall be covered by the blanket fidelity bond.  An agent

11  licensed under the provisions of the Florida Insurance Code

12  may either directly or indirectly represent the health

13  maintenance organization in the solicitation, negotiation,

14  effectuation, procurement, receipt, delivery, or forwarding of

15  any health maintenance organization subscriber's contract or

16  collect or forward any consideration paid by the subscriber to

17  the health maintenance organization; and the licensed agent

18  shall not be required to post the bond required by this

19  subsection.

20         (8)  The entity has filed with the office department,

21  and obtained approval from the office department of, all

22  reinsurance contracts as provided in s. 641.285.

23         (9)  The health maintenance organization has a

24  grievance procedure that will facilitate the resolution of

25  subscriber grievances and that includes both formal and

26  informal steps available within the organization.

27         Section 1569.  Subsections (2) and (4), and paragraphs

28  (b) and (d) of subsection (6) of section 641.225, Florida

29  Statutes, are amended to read:

30         641.225  Surplus requirements.--

31  

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 1         (2)  The office department shall not issue a

 2  certificate of authority, except as provided in subsection

 3  (3), unless the health maintenance organization has a minimum

 4  surplus in an amount which is the greater of:

 5         (a)  Ten percent of their total liabilities based on

 6  their startup projection as set forth in this part;

 7         (b)  Two percent of their total projected premiums

 8  based on their startup projection as set forth in this part;

 9  or

10         (c)  $1,500,000, plus all startup losses, excluding

11  profits, projected to be incurred on their startup projection

12  until the projection reflects statutory net profits for 12

13  consecutive months.

14         (4)  The commission department may adopt rules to set

15  uniform standards and criteria for the early warning that the

16  continued operation of any health maintenance organization

17  might be hazardous to its subscribers, creditors, or the

18  general public, and to set standards for evaluating the

19  financial condition of any health maintenance organization.

20         (6)  In lieu of having any minimum surplus, the health

21  maintenance organization may provide a written guarantee to

22  assure payment of covered subscriber claims and all other

23  liabilities of the health maintenance organization, provided

24  that the written guarantee is made by a guaranteeing

25  organization which:

26         (b)  Submits a guarantee that is approved by the office

27  department as meeting the requirements of this part, provided

28  that the written guarantee contains a provision which requires

29  that the guarantee be irrevocable unless the guaranteeing

30  organization can demonstrate to the office department that the

31  cancellation of the guarantee will not result in the

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 1  insolvency of the health maintenance organization and the

 2  office department approves cancellation of the guarantee.

 3         (d)  Submits annually, within 3 months after the end of

 4  its fiscal year, an audited financial statement certified by

 5  an independent certified public accountant, prepared in

 6  accordance with generally accepted accounting principles.  The

 7  office department may, as it deems necessary, require

 8  quarterly financial statements from the guaranteeing

 9  organization.

10         Section 1570.  Subsection (1) of section 641.227,

11  Florida Statutes, is amended to read:

12         641.227  Rehabilitation Administrative Expense Fund.--

13         (1)  The office department shall not issue or permit to

14  exist a certificate of authority to operate a health

15  maintenance organization in this state unless the organization

16  has deposited with the department $10,000 in cash for use in

17  the Rehabilitation Administrative Expense Fund as established

18  in subsection (2).

19         Section 1571.  Subsections (1) and (3) of section

20  641.228, Florida Statutes, are amended to read:

21         641.228  Florida Health Maintenance Organization

22  Consumer Assistance Plan.--

23         (1)  The office department shall not issue a

24  certificate to any health maintenance organization after July

25  1, 1989, until the applicant health maintenance organization

26  has paid in full its special assessment as set forth in s.

27  631.819(2)(a).

28         (3)  The office department may suspend or revoke the

29  certificate of authority of any health maintenance

30  organization which does not timely pay its assessment to the

31  

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 1  Florida Health Maintenance Organization Consumer Assistance

 2  Plan.

 3         Section 1572.  Section 641.23, Florida Statutes, is

 4  amended to read:

 5         641.23  Revocation or cancellation of certificate of

 6  authority; suspension of enrollment of new subscribers; terms

 7  of suspension.--

 8         (1)  The maintenance of a valid and current health care

 9  provider certificate issued pursuant to part III of this

10  chapter is a condition of the maintenance of a valid and

11  current certificate of authority issued by the office

12  department to operate a health maintenance organization.

13  Denial or revocation of a health care provider certificate

14  shall be deemed to be an automatic and immediate cancellation

15  of a health maintenance organization's certificate of

16  authority.  At the discretion of the office Department of

17  Insurance, nonrenewal of a health care provider certificate

18  may be deemed to be an automatic and immediate cancellation of

19  a health maintenance organization's certificate of authority

20  if the Agency for Health Care Administration notifies the

21  office Department of Insurance, in writing, that the health

22  care provider certificate will not be renewed.

23         (2)  The office department may suspend the authority of

24  a health maintenance organization to enroll new subscribers or

25  revoke any certificate issued to a health maintenance

26  organization, or order compliance within 30 days, if it finds

27  that any of the following conditions exists:

28         (a)  The organization is not operating in compliance

29  with this part;

30  

31  

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 1         (b)  The plan is no longer actuarially sound or the

 2  organization does not have the minimum surplus as required by

 3  this part;

 4         (c)  The existing contract rates are excessive,

 5  inadequate, or unfairly discriminatory;

 6         (d)  The organization has advertised, merchandised, or

 7  attempted to merchandise its services in such a manner as to

 8  misrepresent its services or capacity for service or has

 9  engaged in deceptive, misleading, or unfair practices with

10  respect to advertising or merchandising; or

11         (e)  The organization is insolvent.

12         (3)  Whenever the financial condition of the health

13  maintenance organization is such that, if not modified or

14  corrected, its continued operation would result in impairment

15  or insolvency, the office department may order the health

16  maintenance organization to file with the office department

17  and implement a corrective action plan designed to do one or

18  more of the following:

19         (a)  Reduce the total amount of present potential

20  liability for benefits by reinsurance or other means.

21         (b)  Reduce the volume of new business being accepted.

22         (c)  Reduce the expenses of the health maintenance

23  organization by specified methods.

24         (d)  Suspend or limit the writing of new business for a

25  period of time.

26         (e)  Require an increase in the health maintenance

27  organization's net worth.

28  

29  If the health maintenance organization fails to submit a plan

30  within 30 days of the office's department's order or submits a

31  plan which is insufficient to correct the health maintenance

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 1  organization's financial condition, the office department may

 2  order the health maintenance organization to implement one or

 3  more of the corrective actions listed in this subsection.

 4         (4)  The office department shall, in its order

 5  suspending the authority of a health maintenance organization

 6  to enroll new subscribers, specify the period during which the

 7  suspension is to be in effect and the conditions, if any,

 8  which must be met by the health maintenance organization prior

 9  to reinstatement of its authority to enroll new subscribers.

10  The order of suspension is subject to rescission or

11  modification by further order of the office department prior

12  to the expiration of the suspension period. Reinstatement

13  shall not be made unless requested by the health maintenance

14  organization; however, the office department shall not grant

15  reinstatement if it finds that the circumstances for which the

16  suspension occurred still exist or are likely to recur.

17         (5)  The commission department shall adopt promulgate

18  rules establishing an actuarially sound medical loss ratio for

19  Medicaid.  In determining the appropriate medical loss ratio,

20  the commission department shall consider factors, including

21  but not limited to, plan age, plan structure, geographic

22  service area, product mix, provider network, medical

23  inflation, provider services, other professional services, out

24  of network referrals and expenditures, in and out of network

25  emergency room expenditures, inpatient expenditures, other

26  medical expenditures, incentive pool adjustments, copayments,

27  coordination of benefits, subrogation, and any other expenses

28  associated with the delivery of medical benefits.  The

29  commission department shall utilize assistance from the Agency

30  for Health Care Administration, the State University System,

31  an independent actuary, and representatives from health

                                 1929

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 1  maintenance organizations in developing the rule for

 2  appropriate medical loss ratios.

 3         (6)  The office department shall calculate and publish

 4  at least annually the medical loss ratios of all licensed

 5  health maintenance organizations.  The publication shall

 6  include an explanation of what the medical loss ratio means

 7  and shall disclose that the medical loss ratio is not a direct

 8  reflection of quality, but must be looked at along with

 9  patient satisfaction and other standards that define quality.

10         Section 1573.  Subsections (1), (2), and (3) of section

11  641.234, Florida Statutes, are amended to read:

12         641.234  Administrative, provider, and management

13  contracts.--

14         (1)  The office department may require a health

15  maintenance organization to submit any contract for

16  administrative services, contract with a provider other than

17  an individual physician, contract for management services, and

18  contract with an affiliated entity to the office department.

19         (2)  After review of a contract the office department

20  may order the health maintenance organization to cancel the

21  contract in accordance with the terms of the contract and

22  applicable law if it determines:

23         (a)  That the fees to be paid by the health maintenance

24  organization under the contract are so unreasonably high as

25  compared with similar contracts entered into by the health

26  maintenance organization or as compared with similar contracts

27  entered into by other health maintenance organizations in

28  similar circumstances that the contract is detrimental to the

29  subscribers, stockholders, investors, or creditors of the

30  health maintenance organization; or

31  

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 1         (b)  That the contract is with an entity that is not

 2  licensed under state statutes, if such license is required, or

 3  is not in good standing with the applicable regulatory agency.

 4         (3)  All contracts for administrative services,

 5  management services, provider services other than individual

 6  physician contracts, and with affiliated entities entered into

 7  or renewed by a health maintenance organization on or after

 8  October 1, 1988, shall contain a provision that the contract

 9  shall be canceled upon issuance of an order by the office

10  department pursuant to this section.

11         Section 1574.  Section 641.2342, Florida Statutes, is

12  amended to read:

13         641.2342  Contract providers.--Each health maintenance

14  organization shall file, upon the request of the office

15  department, financial statements for all contract providers of

16  comprehensive health care services who have assumed, through

17  capitation or other means, more than 10 percent of the health

18  care risks of the health maintenance organization.  However,

19  this provision shall not apply to any individual physician.

20         Section 1575.  Section 641.25, Florida Statutes, is

21  amended to read:

22         641.25  Administrative penalty in lieu of suspension or

23  revocation.--If the office department finds that one or more

24  grounds exist for the revocation or suspension of a

25  certificate issued under this part, the office department may,

26  in lieu of revocation or suspension, impose a fine upon the

27  health maintenance organization.  With respect to any

28  nonwillful violation, the fine must not exceed $2,500 per

29  violation. Such fines may not exceed an aggregate amount of

30  $25,000 for all nonwillful violations arising out of the same

31  action.  With respect to any knowing and willful violation of

                                 1931

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 1  a lawful order or rule of the office or commission department

 2  or a provision of this part, the office department may impose

 3  upon the organization a fine in an amount not to exceed

 4  $20,000 for each such violation.  Such fines may not exceed an

 5  aggregate amount of $250,000 for all knowing and willful

 6  violations arising out of the same action.  The commission

 7  department must adopt by rule by January 1, 1997, penalty

 8  categories that specify varying ranges of monetary fines for

 9  willful violations and for nonwillful violations.

10         Section 1576.  Subsection (2) of section 641.255,

11  Florida Statutes, is amended to read:

12         641.255  Acquisition, merger, or consolidation.--

13         (2)  In addition to the requirements set forth in ss.

14  628.451, 628.4615, and 628.471, each party to any transaction

15  involving any licensee which, as indicated in its most recent

16  quarterly or annual statement, derives income from Medicaid

17  funds shall in the filing made with the office department

18  identify:

19         (a)  Any person who has received any payment from

20  either party or any person on that party's behalf; or

21         (b)  The existence of any agreement entered into by

22  either party or by any person on that party's behalf to pay a

23  consultant fee, a broker fee, a commission, or other fee or

24  charge,

25  

26  which in any way relates to the acquisition, merger, or

27  consolidation. The commission department may adopt a form to

28  be made part of the application which is to be sworn to by an

29  officer of the entity which made or will make the payment. The

30  form shall include the name of the person or entity paying the

31  fee; the name of the person or entity receiving the fee; the

                                 1932

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 1  date of payment; and a brief description of the work

 2  performed.

 3         Section 1577.  Section 641.26, Florida Statutes, is

 4  amended to read:

 5         641.26  Annual and quarterly reports.--

 6         (1)  Every health maintenance organization shall,

 7  annually within 3 months after the end of its fiscal year, or

 8  within an extension of time therefor as the office department,

 9  for good cause, may grant, in a form prescribed by the

10  commission department, file a report with the office

11  department, verified by the oath of two officers of the

12  organization or, if not a corporation, of two persons who are

13  principal managing directors of the affairs of the

14  organization, properly notarized, showing its condition on the

15  last day of the immediately preceding reporting period.  Such

16  report shall include:

17         (a)  A financial statement of the health maintenance

18  organization filed on a computer diskette using a format

19  acceptable to the office department.

20         (b)  A financial statement of the health maintenance

21  organization filed on forms acceptable to the office

22  department.

23         (c)  An audited financial statement of the health

24  maintenance organization, including its balance sheet and a

25  statement of operations for the preceding year certified by an

26  independent certified public accountant, prepared in

27  accordance with statutory accounting principles.

28         (d)  The number of health maintenance contracts issued

29  and outstanding and the number of health maintenance contracts

30  terminated.

31  

                                 1933

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 1         (e)  The number and amount of damage claims for medical

 2  injury initiated against the health maintenance organization

 3  and any of the providers engaged by it during the reporting

 4  year, broken down into claims with and without formal legal

 5  process, and the disposition, if any, of each such claim.

 6         (f)  An actuarial certification that:

 7         1.  The health maintenance organization is actuarially

 8  sound, which certification shall consider the rates, benefits,

 9  and expenses of, and any other funds available for the payment

10  of obligations of, the organization.

11         2.  The rates being charged or to be charged are

12  actuarially adequate to the end of the period for which rates

13  have been guaranteed.

14         3.  Incurred but not reported claims and claims

15  reported but not fully paid have been adequately provided for.

16         4.  The health maintenance organization has adequately

17  provided for all obligations required by s. 641.35(3)(a).

18         (g)  A report prepared by the certified public

19  accountant and filed with the office department describing

20  material weaknesses in the health maintenance organization's

21  internal control structure as noted by the certified public

22  accountant during the audit.  The report must be filed with

23  the annual audited financial report as required in paragraph

24  (c).  The health maintenance organization shall provide a

25  description of remedial actions taken or proposed to correct

26  material weaknesses, if the actions are not described in the

27  independent certified public accountant's report.

28         (h)  Such other information relating to the performance

29  of health maintenance organizations as is required by the

30  commission or office department.

31  

                                 1934

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 1         (2)  The office department may require updates of the

 2  actuarial certification as to a particular health maintenance

 3  organization if the office department has reasonable cause to

 4  believe that such reserves are understated to the extent of

 5  materially misstating the financial position of the health

 6  maintenance organization.  Workpapers in support of the

 7  statement of the updated actuarial certification must be

 8  provided to the office department upon request.

 9         (3)  Every health maintenance organization shall file

10  quarterly, for the first three calendar quarters of each year,

11  an unaudited financial statement of the organization as

12  described in paragraphs (1)(a) and (b). The statement for the

13  quarter ending March 31 shall be filed on or before May 15,

14  the statement for the quarter ending June 30 shall be filed on

15  or before August 15, and the statement for the quarter ending

16  September 30 shall be filed on or before November 15. The

17  quarterly report shall be verified by the oath of two officers

18  of the organization, properly notarized.

19         (4)  Any health maintenance organization that neglects

20  to file an annual report or quarterly report in the form and

21  within the time required by this section shall forfeit up to

22  $1,000 for each day for the first 10 days during which the

23  neglect continues and shall forfeit up to $2,000 for each day

24  after the first 10 days during which the neglect continues;

25  and, upon notice by the office department to that effect, the

26  organization's authority to enroll new subscribers or to do

27  business in this state shall cease while such default

28  continues.  The office department shall deposit all sums

29  collected by it under this section to the credit of the

30  Insurance Commissioner's Regulatory Trust Fund. The office

31  

                                 1935

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 1  department shall not collect more than $100,000 for each

 2  report.

 3         (5)  Each authorized health maintenance organization

 4  shall retain an independent certified public accountant,

 5  referred to in this section as "CPA," who agrees by written

 6  contract with the health maintenance organization to comply

 7  with the provisions of this part.

 8         (a)  The CPA shall provide to the HMO audited financial

 9  statements consistent with this part.

10         (b)  Any determination by the CPA that the health

11  maintenance organization does not meet minimum surplus

12  requirements as set forth in this part shall be stated by the

13  CPA, in writing, in the audited financial statement.

14         (c)  The completed work papers and any written

15  communications between the CPA firm and the health maintenance

16  organization relating to the audit of the health maintenance

17  organization shall be made available for review on a

18  visual-inspection-only basis by the office department at the

19  offices of the health maintenance organization, at the office

20  department, or at any other reasonable place as mutually

21  agreed between the office department and the health

22  maintenance organization.  The CPA must retain for review the

23  work papers and written communications for a period of not

24  less than 6 years.

25         (d)  The CPA shall provide to the office department a

26  written report describing material weaknesses in the health

27  maintenance organization's internal control structure as noted

28  during the audit.

29         (6)  To facilitate uniformity in financial statements

30  and to facilitate office department analysis, the commission

31  department may by rule adopt the form for financial statements

                                 1936

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 1  of a health maintenance organization, including supplements as

 2  approved by the National Association of Insurance

 3  Commissioners in 1995, and may adopt subsequent amendments

 4  thereto if the methodology remains substantially consistent,

 5  and may by rule require each health maintenance organization

 6  to submit to the office department all or part of the

 7  information contained in the annual statement in a

 8  computer-readable form compatible with the electronic data

 9  processing system specified by the office department.

10         (7)  In addition to information called for and

11  furnished in connection with its annual or quarterly

12  statements, the health maintenance organization shall furnish

13  to the office department as soon as reasonably possible such

14  information as to its material transactions which, in the

15  office's department's opinion, may have a material adverse

16  effect on the health maintenance organization's financial

17  condition, as the office requests department may request in

18  writing. All such information furnished pursuant to the

19  office's department's request must be verified by the oath of

20  two executive officers of the health maintenance organization.

21         (8)  Each health maintenance organization shall file

22  one copy of its annual statement convention blank in

23  electronic form, along with such additional filings as

24  prescribed by the commission department for the preceding

25  calendar year or quarter, with the National Association of

26  Insurance Commissioners. Each health maintenance organization

27  shall pay fees assessed by the National Association of

28  Insurance Commissioners to cover costs associated with the

29  filing and analysis of the documents by the National

30  Association of Insurance Commissioners.

31  

                                 1937

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 1         Section 1578.  Section 641.27, Florida Statutes, is

 2  amended to read:

 3         641.27  Examination by the department.--

 4         (1)  The office department shall examine the affairs,

 5  transactions, accounts, business records, and assets of any

 6  health maintenance organization as often as it deems it

 7  expedient for the protection of the people of this state, but

 8  not less frequently than once every 3 years.  In lieu of

 9  making its own financial examination, the office department

10  may accept an independent certified public accountant's audit

11  report prepared on a statutory accounting basis consistent

12  with this part.  However, except when the medical records are

13  requested and copies furnished pursuant to s. 456.057, medical

14  records of individuals and records of physicians providing

15  service under contract to the health maintenance organization

16  shall not be subject to audit, although they may be subject to

17  subpoena by court order upon a showing of good cause.  For the

18  purpose of examinations, the office department may administer

19  oaths to and examine the officers and agents of a health

20  maintenance organization concerning its business and affairs.

21  The examination of each health maintenance organization by the

22  office department shall be subject to the same terms and

23  conditions as apply to insurers under chapter 624.  In no

24  event shall expenses of all examinations exceed a maximum of

25  $20,000 for any 1-year period.  Any rehabilitation,

26  liquidation, conservation, or dissolution of a health

27  maintenance organization shall be conducted under the

28  supervision of the department, which shall have all power with

29  respect thereto granted to it under the laws governing the

30  rehabilitation, liquidation, reorganization, conservation, or

31  dissolution of life insurance companies.

                                 1938

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 1         (2)  The office department may contract, at reasonable

 2  fees for work performed, with qualified, impartial outside

 3  sources to perform audits or examinations or portions thereof

 4  pertaining to the qualification of an entity for issuance of a

 5  certificate of authority or to determine continued compliance

 6  with the requirements of this part, in which case the payment

 7  must be made directly to the contracted examiner by the health

 8  maintenance organization examined, in accordance with the

 9  rates and terms agreed to by the office department and the

10  examiner. Any contracted assistance shall be under the direct

11  supervision of the office department.  The results of any

12  contracted assistance shall be subject to the review of, and

13  approval, disapproval, or modification by, the office

14  department.

15         Section 1579.  Section 641.28, Florida Statutes, is

16  amended to read:

17         641.28  Civil remedy.--In any civil action brought to

18  enforce the terms and conditions of a health maintenance

19  organization contract, the prevailing party is entitled to

20  recover reasonable attorney's fees and court costs. This

21  section shall not be construed to authorize a civil action

22  against the commission, office, or department, their its

23  employees, or the Chief Financial Officer Insurance

24  Commissioner or against the Agency for Health Care

25  Administration, its employees, or the director of the agency.

26         Section 1580.  Section 641.281, Florida Statutes, is

27  amended to read:

28         641.281  Injunction.--In addition to the penalties and

29  other enforcement provisions of this part, the office and

30  department, within the scope of their regulatory

31  

                                 1939

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 1  jurisdictions, are is vested with the power to seek both

 2  temporary and permanent injunctive relief when:

 3         (1)  A health maintenance organization is being

 4  operated by any person or entity without a subsisting

 5  certificate of authority.

 6         (2)  Any person, entity, or health maintenance

 7  organization has engaged in any activity prohibited by this

 8  part or any rule adopted pursuant thereto.

 9         (3)  Any health maintenance organization, person, or

10  entity is renewing, issuing, or delivering a health

11  maintenance contract or contracts without a subsisting

12  certificate of authority.

13  

14  The office's and department's authority to seek injunctive

15  relief shall not be conditioned on having conducted any

16  proceeding pursuant to chapter 120.

17         Section 1581.  Section 641.284, Florida Statutes, is

18  amended to read:

19         641.284  Liquidation, rehabilitation, reorganization,

20  and conservation; exclusive methods of remedy.--A delinquency

21  proceeding under part I of chapter 631, or supervision by the

22  office department under ss. 624.80-624.87, constitute the sole

23  and exclusive means of liquidating, reorganizing,

24  rehabilitating, or conserving a health maintenance

25  organization.

26         Section 1582.  Subsections (1), (2), and (3) of section

27  641.285, Florida Statutes, are amended to read:

28         641.285  Insolvency protection.--

29         (1)  Each health maintenance organization shall deposit

30  with the department cash or securities of the type eligible

31  under s. 625.52, which shall have at all times a market value

                                 1940

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 1  in the amount set forth in this subsection.  The amount of the

 2  deposit shall be reviewed annually, or more often, as the

 3  office department deems necessary. The market value of the

 4  deposit shall be a minimum of $300,000.

 5         (2)  If securities or assets deposited by a health

 6  maintenance organization under this part are subject to

 7  material fluctuations in market value, the office department

 8  may, in its discretion, require the organization to deposit

 9  and maintain on deposit additional securities or assets in an

10  amount as may be reasonably necessary to assure that the

11  deposit will at all times have a market value of not less than

12  the amount specified under this section. If for any reason the

13  market value of assets and securities of a health maintenance

14  organization held on deposit in this state under this code

15  falls below the amount required, the organization shall

16  promptly deposit other or additional assets or securities

17  eligible for deposit sufficient to cure the deficiency. If the

18  health maintenance organization has failed to cure the

19  deficiency within 30 days after receipt of notice thereof by

20  registered or certified mail from the office department, the

21  office department may revoke the certificate of authority of

22  the health maintenance organization.

23         (3)  Whenever the office department determines that the

24  financial condition of a health maintenance organization has

25  deteriorated to the point that the policyholders' or

26  subscribers' best interests are not being preserved by the

27  activities of a health maintenance organization, the office

28  department may require such health maintenance organization to

29  deposit and maintain deposited in trust with the department

30  for the protection of the health maintenance organization's

31  policyholders, subscribers, and creditors, for such time as

                                 1941

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 1  the office department deems necessary, securities eligible for

 2  such deposit under s. 625.52 having a market value of not less

 3  than the amount that the office department determines is

 4  necessary, which amount must not be less than $100,000 or

 5  greater than $2 million.  The deposit required under this

 6  subsection is in addition to any other deposits required of a

 7  health maintenance organization pursuant to subsections (1)

 8  and (2).

 9         Section 1583.  Section 641.29, Florida Statutes, is

10  amended to read:

11         641.29  Fees.--Every health maintenance organization

12  shall pay to the office department the following fees:

13         (1)  For filing a copy of its application for a

14  certificate of authority or amendment thereto, a nonrefundable

15  fee in the amount of $1,000.

16         (2)  For filing each annual report, which must be filed

17  on computer diskettes, $150.

18         Section 1584.  Paragraph (b) of subsection (4) of

19  section 641.3007, Florida Statutes, is amended to read:

20         641.3007  HIV infection and AIDS for contract

21         (4)  UTILIZATION OF MEDICAL TESTS.--

22         (b)  Prior to testing, the health maintenance

23  organization must disclose its intent to test the person for

24  the HIV infection or for a specific sickness or medical

25  condition derived therefrom and must obtain the person's

26  written informed consent to administer the test.  Written

27  informed consent shall include a fair explanation of the test,

28  including its purpose, potential uses, and limitations, and

29  the meaning of its results and the right to confidential

30  treatment of information.  Use of a form approved by the

31  

                                 1942

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 1  office department shall raise a conclusive presumption of

 2  informed consent.

 3         Section 1585.  Section 641.305, Florida Statutes, is

 4  amended to read:

 5         641.305  Language used in contracts and advertisements;

 6  translations.--

 7         (1)(a)  All health maintenance contracts or forms shall

 8  be printed in English.

 9         (b)  If the negotiations by a health maintenance

10  organization with a member leading up to the effectuation of a

11  health maintenance contract are conducted in a language other

12  than English, the health maintenance organization shall supply

13  to the member a written translation of the contract, which

14  translation accurately reflects the substance of the contract

15  and is in the language used to negotiate the contract.  The

16  written translation shall be affixed to and shall become a

17  part of the contract or form.  Any such translation shall be

18  furnished to the office department as part of the filing of

19  the health maintenance contract form.  No translation of a

20  health maintenance contract form shall be approved by the

21  department unless the translation accurately reflects the

22  substance of the health maintenance contract form in

23  translation.

24         (2)  The text of all advertisements by a health

25  maintenance organization, if printed or broadcast in a

26  language other than English, also shall be available in

27  English and shall be furnished to the office department upon

28  request.  As used in this subsection, the term "advertisement"

29  means any advertisement, circular, pamphlet, brochure, or

30  other printed material disclosing or disseminating advertising

31  material or information by a health maintenance organization

                                 1943

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 1  to prospective or existing subscribers and includes any radio

 2  or television transmittal of an advertisement or information.

 3         Section 1586.  Subsections (2), (3), (5), and (12) and

 4  paragraphs (c) and (e) of subsection (38) of section 641.31,

 5  Florida Statutes, are amended to read:

 6         641.31  Health maintenance contracts.--

 7         (2)  The rates charged by any health maintenance

 8  organization to its subscribers shall not be excessive,

 9  inadequate, or unfairly discriminatory or follow a rating

10  methodology that is inconsistent, indeterminate, or ambiguous

11  or encourages misrepresentation or misunderstanding.  The

12  commission department, in accordance with generally accepted

13  actuarial practice as applied to health maintenance

14  organizations, may define by rule what constitutes excessive,

15  inadequate, or unfairly discriminatory rates and may require

16  whatever information it deems necessary to determine that a

17  rate or proposed rate meets the requirements of this

18  subsection.

19         (3)(a)  If a health maintenance organization desires to

20  amend any contract with its subscribers or any certificate or

21  member handbook, or desires to change any basic health

22  maintenance contract, certificate, grievance procedure, or

23  member handbook form, or application form where written

24  application is required and is to be made a part of the

25  contract, or printed amendment, addendum, rider, or

26  endorsement form or form of renewal certificate, it may do so,

27  upon filing with the office department the proposed change or

28  amendment.  Any proposed change shall be effective

29  immediately, subject to disapproval by the office department.

30  Following receipt of notice of such disapproval or withdrawal

31  of approval, no health maintenance organization shall issue or

                                 1944

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 1  use any form disapproved by the office department or as to

 2  which the office department has withdrawn approval.

 3         (b)  Any change in the rate is subject to paragraph (d)

 4  and requires at least 30 days' advance written notice to the

 5  subscriber. In the case of a group member, there may be a

 6  contractual agreement with the health maintenance organization

 7  to have the employer provide the required notice to the

 8  individual members of the group.

 9         (c)  The office department shall disapprove any form

10  filed under this subsection, or withdraw any previous approval

11  thereof, if the form:

12         1.  Is in any respect in violation of, or does not

13  comply with, any provision of this part or rule adopted

14  thereunder.

15         2.  Contains or incorporates by reference, where such

16  incorporation is otherwise permissible, any inconsistent,

17  ambiguous, or misleading clauses or exceptions and conditions

18  which deceptively affect the risk purported to be assumed in

19  the general coverage of the contract.

20         3.  Has any title, heading, or other indication of its

21  provisions which is misleading.

22         4.  Is printed or otherwise reproduced in such a manner

23  as to render any material provision of the form substantially

24  illegible.

25         5.  Contains provisions which are unfair, inequitable,

26  or contrary to the public policy of this state or which

27  encourage misrepresentation.

28         6.  Excludes coverage for human immunodeficiency virus

29  infection or acquired immune deficiency syndrome or contains

30  limitations in the benefits payable, or in the terms or

31  conditions of such contract, for human immunodeficiency virus

                                 1945

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 1  infection or acquired immune deficiency syndrome which are

 2  different than those which apply to any other sickness or

 3  medical condition.

 4         (d)  Any change in rates charged for the contract must

 5  be filed with the office department not less than 30 days in

 6  advance of the effective date. At the expiration of such 30

 7  days, the rate filing shall be deemed approved unless prior to

 8  such time the filing has been affirmatively approved or

 9  disapproved by order of the office department. The approval of

10  the filing by the office department constitutes a waiver of

11  any unexpired portion of such waiting period. The office

12  department may extend by not more than an additional 15 days

13  the period within which it may so affirmatively approve or

14  disapprove any such filing, by giving notice of such extension

15  before expiration of the initial 30-day period. At the

16  expiration of any such period as so extended, and in the

17  absence of such prior affirmative approval or disapproval, any

18  such filing shall be deemed approved.

19         (e)  It is not the intent of this subsection to

20  restrict unduly the right to modify rates in the exercise of

21  reasonable business judgment.

22         (5)  Every subscriber shall receive a clear and

23  understandable description of the method of the health

24  maintenance organization for resolving subscriber grievances,

25  and the method shall be set forth in the contract,

26  certificate, and member handbook.  The organization shall also

27  furnish, at the time of initial enrollment and when necessary

28  due to substantial changes to the grievance process a separate

29  and additional communication prepared or approved by the

30  office department notifying the contract holder of a group

31  

                                 1946

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 1  contract or subscriber of an individual contract of their

 2  rights and responsibilities under the grievance process.

 3         (12)  Each health maintenance contract, certificate, or

 4  member handbook shall state that emergency services and care

 5  shall be provided to subscribers in emergency situations not

 6  permitting treatment through the health maintenance

 7  organization's providers, without prior notification to and

 8  approval of the organization.  Not less than 75 percent of the

 9  reasonable charges for covered services and supplies shall be

10  paid by the organization, up to the subscriber contract

11  benefit limits. Payment also may be subject to additional

12  applicable copayment provisions, not to exceed $100 per claim.

13  The health maintenance contract, certificate, or member

14  handbook shall contain the definitions of "emergency services

15  and care" and "emergency medical condition" as specified in s.

16  641.19(6) and (7) s. 641.19(7) and (8), shall describe

17  procedures for determination by the health maintenance

18  organization of whether the services qualify for reimbursement

19  as emergency services and care, and shall contain specific

20  examples of what does constitute an emergency. In providing

21  for emergency services and care as a covered service, a health

22  maintenance organization shall be governed by s. 641.513.

23         (38)

24         (c)  Premiums paid in for the point-of-service riders

25  may not exceed 15 percent of total premiums for all health

26  plan products sold by the health maintenance organization

27  offering the rider. If the premiums paid for point-of-service

28  riders exceed 15 percent, the health maintenance organization

29  must notify the office department and, once this fact is

30  known, must immediately cease offering such a rider until it

31  is in compliance with the rider premium cap.

                                 1947

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 1         (e)  The term "point of service" may not be used by a

 2  health maintenance organization except with riders permitted

 3  under this section or with forms approved by the office

 4  department in which a point-of-service product is offered with

 5  an indemnity carrier.

 6         Section 1587.  Subsection (2) of section 641.3105,

 7  Florida Statutes, is amended to read:

 8         641.3105  Validity of noncomplying contracts.--

 9         (2)  Any health maintenance contract delivered or

10  issued for delivery in this state covering a subscriber, which

11  subscriber, pursuant to the provisions of this part, the

12  organization may not lawfully cover under the contract, shall

13  be cancelable at any time by the organization, any provision

14  of the contract to the contrary notwithstanding; and the

15  organization shall promptly cancel the contract in accordance

16  with the request of the office department therefor.  No such

17  illegality or cancellation shall be deemed to relieve the

18  organization of any liability incurred by it under the

19  contract while in force or to prohibit the organization from

20  retaining the pro rata earned premium or rate thereon.  This

21  provision does not relieve the organization from any penalty

22  otherwise incurred by the organization under this part on

23  account of any such violation.

24         Section 1588.  Subsection (5), paragraph (b) of

25  subsection (7), paragraphs (a) and (e) of subsection (8),

26  paragraph (c) of subsection (9), and paragraph (b) of

27  subsection (10) of section 641.31071, Florida Statutes, are

28  amended to read:

29         641.31071  Preexisting conditions.--

30  

31  

                                 1948

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 1         (5)(a)  The term "creditable coverage" means, with

 2  respect to an individual, coverage of the individual under any

 3  of the following:

 4         1.  A group health plan, as defined in s. 2791 of the

 5  Public Health Service Act.

 6         2.  Health insurance coverage consisting of medical

 7  care, provided directly, through insurance or reimbursement or

 8  otherwise, and including terms and services paid for as

 9  medical care, under any hospital or medical service policy or

10  certificate, hospital or medical service plan contract, or

11  health maintenance contract offered by a health insurance

12  issuer.

13         3.  Part A or part B of Title XVIII of the Social

14  Security Act.

15         4.  Title XIX of the Social Security Act, other than

16  coverage consisting solely of benefits under s. 1928.

17         5.  Chapter 55 of Title 10, United States Code.

18         6.  A medical care program of the Indian Health Service

19  or of a tribal organization.

20         7.  The Florida Comprehensive Health Association or

21  another state health benefit risk pool.

22         8.  A health plan offered under chapter 89 of Title 5,

23  United States Code.

24         9.  A public health plan as defined by rule of the

25  commission department. To the greatest extent possible, such

26  rules must be consistent with regulations adopted by the

27  United States Department of Health and Human Services.

28         10.  A health benefit plan under s. 5(e) of the Peace

29  Corps Act (22 U.S.C. s. 2504(e)).

30  

31  

                                 1949

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 1         (b)  Creditable coverage does not include coverage that

 2  consists solely of one or more or any combination thereof of

 3  the following excepted benefits:

 4         1.  Coverage only for accident, or disability income

 5  insurance, or any combination thereof.

 6         2.  Coverage issued as a supplement to liability

 7  insurance.

 8         3.  Liability insurance, including general liability

 9  insurance and automobile liability insurance.

10         4.  Workers' compensation or similar insurance.

11         5.  Automobile medical payment insurance.

12         6.  Credit-only insurance.

13         7.  Coverage for onsite medical clinics.

14         8.  Other similar insurance coverage, specified in

15  rules adopted by the commission department, under which

16  benefits for medical care are secondary or incidental to other

17  insurance benefits. To the greatest extent possible, such

18  rules must be consistent with regulations adopted by the

19  United States Department of Health and Human Services.

20         (c)  The following benefits are not subject to the

21  creditable coverage requirements, if offered separately;

22         1.  Limited scope dental or vision benefits.

23         2.  Benefits or long-term care, nursing home care, home

24  health care, community-based care, or any combination of

25  these.

26         3.  Such other similar, limited benefits as are

27  specified in rules adopted by the commission department. To

28  the greatest extent possible, such rules must be consistent

29  with regulations adopted by the United States Department of

30  Health and Human Services.

31  

                                 1950

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 1         (d)  The following benefits are not subject to

 2  creditable coverage requirements if offered as independent,

 3  noncoordinated benefits:

 4         1.  Coverage only for a specified disease or illness.

 5         2.  Hospital indemnity or other fixed indemnity

 6  insurance.

 7         (e)  Benefits provided through Medicare supplemental

 8  health insurance, as defined under s. 1882(g)(1) of the Social

 9  Security Act, coverage supplemental to the coverage provided

10  under chapter 55 of Title 10, United States Code, and similar

11  supplemental coverage provided to coverage under a group

12  health plan are not considered creditable coverage if offered

13  as a separate insurance policy.

14         (7)

15         (b)  A health maintenance organization may elect to

16  count as creditable coverage, coverage of benefits within each

17  of several classes or categories of benefits specified in

18  rules adopted by the commission department rather than as

19  provided under paragraph (a). Such election shall be made on a

20  uniform basis for all participants and beneficiaries. Under

21  such election, a health maintenance organization shall count a

22  period of creditable coverage with respect to any class or

23  category of benefits if any level of benefits is covered

24  within such class or category.

25         (8)(a)  Periods of creditable coverage with respect to

26  an individual shall be established through presentation of

27  certifications described in this subsection or in such other

28  manner as may be specified in rules adopted by the commission

29  department.

30         (e)  The commission department shall adopt rules to

31  prevent an insurer's or health maintenance organization's

                                 1951

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 1  failure to provide information under this subsection with

 2  respect to previous coverage of an individual from adversely

 3  affecting any subsequent coverage of the individual under

 4  another group health plan or health maintenance organization

 5  coverage.

 6         (9)

 7         (c)  As an alternative to the method authorized by

 8  paragraph (a), a health maintenance organization may address

 9  adverse selection in a method approved by the office

10  department.

11         (10)

12         (b)  The commission department shall adopt rules that

13  provide a process whereby individuals who need to establish

14  creditable coverage for periods before July 1, 1996, and who

15  would have such coverage credited but for paragraph (a), may

16  be given credit for creditable coverage for such periods

17  through the presentation of documents or other means.

18         Section 1589.  Paragraph (b) of subsection (3) of

19  section 641.31074, Florida Statutes, is amended to read:

20         641.31074  Guaranteed renewability of coverage.--

21         (3)

22         (b)1.  In any case in which a health maintenance

23  organization elects to discontinue offering all coverage in

24  the small group market or the large group market, or both, in

25  this state, coverage may be discontinued by the insurer only

26  if:

27         a.  The health maintenance organization provides notice

28  to the office department and to each contract holder, and

29  participants and beneficiaries covered under such coverage, of

30  such discontinuation at least 180 days prior to the date of

31  the nonrenewal of such coverage; and

                                 1952

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 1         b.  All health insurance issued or delivered for

 2  issuance in this state in such market is discontinued and

 3  coverage under such health insurance coverage in such market

 4  is not renewed.

 5         2.  In the case of a discontinuation under subparagraph

 6  1. in a market, the health maintenance organization may not

 7  provide for the issuance of any health maintenance

 8  organization contract coverage in the market in this state

 9  during the 5-year period beginning on the date of the

10  discontinuation of the last insurance contract not renewed.

11         Section 1590.  Subsection (2) of section 641.315,

12  Florida Statutes, is amended to read:

13         641.315  Provider contracts.--

14         (2)(a)  For all provider contracts executed after

15  October 1, 1991, and within 180 days after October 1, 1991,

16  for contracts in existence as of October 1, 1991:

17         1.  The contracts must require the provider to give 60

18  days' advance written notice to the health maintenance

19  organization and the office department before canceling the

20  contract with the health maintenance organization for any

21  reason; and

22         2.  The contract must also provide that nonpayment for

23  goods or services rendered by the provider to the health

24  maintenance organization is not a valid reason for avoiding

25  the 60-day advance notice of cancellation.

26         (b)  All provider contracts must provide that the

27  health maintenance organization will provide 60 days' advance

28  written notice to the provider and the office department

29  before canceling, without cause, the contract with the

30  provider, except in a case in which a patient's health is

31  subject to imminent danger or a physician's ability to

                                 1953

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 1  practice medicine is effectively impaired by an action by the

 2  Board of Medicine or other governmental agency.

 3         Section 1591.  Subsections (4) and (5) of section

 4  641.3154, Florida Statutes, are amended to read:

 5         641.3154  Organization liability; provider billing

 6  prohibited.--

 7         (4)  A provider or any representative of a provider,

 8  regardless of whether the provider is under contract with the

 9  health maintenance organization, may not collect or attempt to

10  collect money from, maintain any action at law against, or

11  report to a credit agency a subscriber of an organization for

12  payment of services for which the organization is liable, if

13  the provider in good faith knows or should know that the

14  organization is liable. This prohibition applies during the

15  pendency of any claim for payment made by the provider to the

16  organization for payment of the services and any legal

17  proceedings or dispute resolution process to determine whether

18  the organization is liable for the services if the provider is

19  informed that such proceedings are taking place. It is

20  presumed that a provider does not know and should not know

21  that an organization is liable unless:

22         (a)  The provider is informed by the organization that

23  it accepts liability;

24         (b)  A court of competent jurisdiction determines that

25  the organization is liable;

26         (c)  The office department or agency makes a final

27  determination that the organization is required to pay for

28  such services subsequent to a recommendation made by the

29  Statewide Provider and Subscriber Assistance Panel pursuant to

30  s. 408.7056; or

31  

                                 1954

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 1         (d)  The agency issues a final order that the

 2  organization is required to pay for such services subsequent

 3  to a recommendation made by a resolution organization pursuant

 4  to s. 408.7057.

 5         (5)  An organization, the office, and the department

 6  shall report any suspected violation of this section by a

 7  health care practitioner to the Department of Health and by a

 8  facility to the agency, which shall take such action as

 9  authorized by law.

10         Section 1592.  Subsection (12) of section 641.3155,

11  Florida Statutes, is amended to read:

12         641.3155  Prompt payment of claims.--

13         (12)  A permissible error ratio of 5 percent is

14  established for health maintenance organizations' claims

15  payment violations of paragraphs (3)(a), (b), (c), and (e) and

16  (4)(a), (b), (c), and (e).  If the error ratio of a particular

17  insurer does not exceed the permissible error ratio of 5

18  percent for an audit period, no fine shall be assessed for the

19  noted claims violations for the audit period.  The error ratio

20  shall be determined by dividing the number of claims with

21  violations found on a statistically valid sample of claims for

22  the audit period by the total number of claims in the sample.

23  If the error ratio exceeds the permissible error ratio of 5

24  percent, a fine may be assessed according to s. 624.4211 for

25  those claims payment violations which exceed the error ratio.

26  Notwithstanding the provisions of this section, the office

27  department may fine a health maintenance organization for

28  claims payment violations of paragraphs (3)(e) and (4)(e)

29  which create an uncontestable obligation to pay the claim.

30  The office department shall not fine organizations for

31  

                                 1955

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 1  violations which the office department determines were due to

 2  circumstances beyond the organization's control.

 3         Section 1593.  Subsection (4), (6), and (7) of section

 4  641.316, Florida Statutes, are amended to read:

 5         641.316  Fiscal intermediary services.--

 6         (4)  A fiscal intermediary services organization, as

 7  described in subsection (3), shall secure and maintain a

 8  surety bond on file with the office department, naming the

 9  intermediary as principal. The bond must be obtained from a

10  company authorized to write surety insurance in the state, and

11  the office department shall be obligee on behalf of itself and

12  third parties. The penal sum of the bond may not be less than

13  5 percent of the funds handled by the intermediary in

14  connection with its fiscal and fiduciary services during the

15  prior year or $250,000, whichever is less. The minimum bond

16  amount must be $10,000. The condition of the bond must be that

17  the intermediary shall register with the office department and

18  shall not misappropriate funds within its control or custody

19  as a fiscal intermediary or fiduciary. The aggregate liability

20  of the surety for any and all breaches of the conditions of

21  the bond may not exceed the penal sum of the bond. The bond

22  must be continuous in form, must be renewed annually by a

23  continuation certificate, and may be terminated by the surety

24  upon its giving 30 days' written notice of termination to the

25  office department.

26         (6)  Any fiscal intermediary services organization,

27  other than a fiscal intermediary services organization owned,

28  operated, or controlled by a hospital licensed under chapter

29  395, an insurer licensed under chapter 624, a third-party

30  administrator licensed under chapter 626, a prepaid limited

31  health service organization licensed under chapter 636, a

                                 1956

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 1  health maintenance organization licensed under this chapter,

 2  or physician group practices as defined in s. 456.053(3)(h),

 3  must register with the office department and meet the

 4  requirements of this section. In order to register as a fiscal

 5  intermediary services organization, the organization must

 6  comply with ss. 641.21(1)(c) and (d) and 641.22(6). Should the

 7  office department determine that the fiscal intermediary

 8  services organization does not meet the requirements of this

 9  section, the registration shall be denied. In the event that

10  the registrant fails to maintain compliance with the

11  provisions of this section, the office department may revoke

12  or suspend the registration. In lieu of revocation or

13  suspension of the registration, the office department may levy

14  an administrative penalty in accordance with s. 641.25.

15         (7)  The commission department shall adopt rules

16  necessary to administer this section.

17         Section 1594.  Subsections (1), (2), (3), and (4),

18  paragraph (b) of subsection (6), subsection (8), paragraph (c)

19  of subsection (10), subsections (11) and (12), paragraph (a)

20  of subsection (14), and subsections (15), (16), and (17) of

21  section 641.35, Florida Statutes, are amended to read:

22         641.35  Assets, liabilities, and investments.--

23         (1)  ASSETS.--In any determination of the financial

24  condition of a health maintenance organization, there shall be

25  allowed as "assets" only those assets that are owned by the

26  health maintenance organization and that consist of:

27         (a)  Cash or cash equivalents in the possession of the

28  health maintenance organization, or in transit under its

29  control, including the true balance of any deposit in a

30  solvent bank, savings and loan association, or trust company

31  which is domiciled in the United States. Cash equivalents are

                                 1957

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 1  short-term, highly liquid investments, with original

 2  maturities of 3 months or less, which are both readily

 3  convertible to known amounts of cash and so near their

 4  maturity that they present insignificant risk of changes in

 5  value because of changes in interest rates.

 6         (b)  Investments, securities, properties, and loans

 7  acquired or held in accordance with this part, and in

 8  connection therewith the following items:

 9         1.  Interest due or accrued on any bond or evidence of

10  indebtedness which is not in default and which is not valued

11  on a basis including accrued interest.

12         2.  Declared and unpaid dividends on stock and shares,

13  unless the amount of the dividends has otherwise been allowed

14  as an asset.

15         3.  Interest due or accrued upon a collateral loan

16  which is not in default in an amount not to exceed 1 year's

17  interest thereon.

18         4.  Interest due or accrued on deposits or certificates

19  of deposit in solvent banks, savings and loan associations,

20  and trust companies domiciled in the United States, and

21  interest due or accrued on other assets, if such interest is

22  in the judgment of the office department a collectible asset.

23         5.  Interest due or accrued on current mortgage loans,

24  in an amount not exceeding in any event the amount, if any, of

25  the excess of the value of the property less delinquent taxes

26  thereon over the unpaid principal; but in no event shall

27  interest accrued for a period in excess of 90 days be allowed

28  as an asset.

29         (c)  Premiums in the course of collection, not more

30  than 3 months past due, less commissions payable thereon.  The

31  foregoing limitation shall not apply to premiums payable

                                 1958

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 1  directly or indirectly by any governmental body in the United

 2  States or by any of their instrumentalities.

 3         (d)  The full amount of reinsurance recoverable from a

 4  solvent reinsurer, which reinsurance is authorized under s.

 5  624.610.

 6         (e)  Pharmaceutical and medical supply inventories.

 7         (f)  Goodwill created by acquisitions and mergers

 8  occurring on or after January 1, 2001.

 9         (g)  Loans or advances by a health maintenance

10  organization to its parent or principal owner if approved by

11  the office department.

12         (h)  Other assets, not inconsistent with the provisions

13  of this section, deemed by the office department to be

14  available for the payment of losses and claims, at values to

15  be determined by it.

16  

17  The office department, upon determining that a health

18  maintenance organization's asset has not been evaluated

19  according to applicable law or that it does not qualify as an

20  asset, shall require the health maintenance organization to

21  properly reevaluate the asset or replace the asset with an

22  asset suitable to the office department within 30 days of

23  receipt of written notification by the office department of

24  this determination, if the removal of the asset from the

25  organization's assets would impair the organization's

26  solvency.

27         (2)  ASSETS NOT ALLOWED.--In addition to assets

28  impliedly excluded by the provisions of subsection (1), the

29  following assets expressly shall not be allowed as assets in

30  any determination of the financial condition of a health

31  maintenance organization:

                                 1959

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 1         (a)  Subscriber lists, patents, trade names, agreements

 2  not to compete, and other like intangible assets.

 3         (b)  Any note or account receivable from or advances to

 4  officers, directors, or controlling stockholders, whether

 5  secured or not, and advances to employees, agents, or other

 6  persons on personal security only, other than those

 7  transactions authorized under paragraph (1)(g).

 8         (c)  Stock of the health maintenance organization owned

 9  by it directly or owned by it through any entity in which the

10  organization owns or controls, directly or indirectly, more

11  than 25 percent of the ownership interest.

12         (d)  Leasehold improvements, nonmedical libraries,

13  stationery, literature, and nonmedical supply inventories,

14  except that leasehold improvements made prior to October 1,

15  1985, shall be allowed as an asset and shall be amortized over

16  the shortest of the following periods:

17         1.  The life of the lease.

18         2.  The useful life of the improvements.

19         3.  The 3-year period following October 1, 1985.

20         (e)  Furniture, fixtures, furnishings, vehicles,

21  medical libraries, and equipment.

22         (f)  Notes or other evidences of indebtedness which are

23  secured by mortgages or deeds of trust which are in default

24  and beyond the express period specified in the instrument for

25  curing the default.

26         (g)  Bonds in default for more than 60 days.

27         (h)  Prepaid and deferred expenses.

28         (i)  Any note, account receivable, advance, or other

29  evidence of indebtedness, or investment in:

30         1.  The parent of the health maintenance organization;

31  

                                 1960

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 1         2.  Any entity directly or indirectly controlled by the

 2  health maintenance organization parent; or

 3         3.  An affiliate of the parent or the health

 4  maintenance organization,

 5  

 6  except as allowed in subsections (1), (11), and (12).  The

 7  office department may, however, allow all or a portion of such

 8  asset, at values to be determined by the office department, if

 9  deemed by the office department to be available for the

10  payment of losses and claims.

11         (3)  LIABILITIES.--In any determination of the

12  financial condition of a health maintenance organization,

13  liabilities to be charged against its assets shall include:

14         (a)  The amount, estimated consistently with the

15  provisions of this part, necessary to pay all of its unpaid

16  losses and claims incurred for or on behalf of a subscriber,

17  on or prior to the end of the reporting period, whether

18  reported or unreported, including contract and premium

19  deficiency reserves. If a health maintenance organization,

20  through a health care risk contract, transfers to any entity

21  the obligation to pay any provider for any claim arising from

22  services provided to or for the benefit of any subscriber, the

23  liabilities of the health maintenance organization under this

24  section shall include the amount of those losses and claims to

25  the extent that the provider has not received payment. No

26  liability need be established if the entity has provided to

27  the health maintenance organization a financial instrument

28  acceptable to the office department securing the obligations

29  under the contract or if the health maintenance organization

30  has in place an escrow or withhold agreement approved by the

31  office department which assures full payment of those claims.

                                 1961

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 1  Financial instruments may include irrevocable, clean, and

 2  evergreen letters of credit. As used in this paragraph, the

 3  term "entity" does not include this state, the United States,

 4  or an agency thereof or an insurer or health maintenance

 5  organization authorized in this state.

 6         (b)  The amount equal to the unearned portions of the

 7  gross premiums charged on health maintenance contracts in

 8  force.

 9         (c)  Taxes, expenses, and other obligations due or

10  accrued at the date of the statement.

11  

12  The office department, upon determining that a health

13  maintenance organization has failed to report liabilities that

14  should have been reported, shall require a corrected report

15  which reflects the proper liabilities to be submitted by the

16  organization to the office department within 10 working days

17  of receipt of written notification.

18         (4)  INVESTMENTS GENERALLY.--Health maintenance

19  organizations may invest their funds only in accordance with

20  the provisions of this part. Notwithstanding the provisions of

21  this part, however, the office department may, after notice

22  and hearing, order a health maintenance organization to limit

23  or withdraw from certain investments or to discontinue certain

24  investment practices, to the extent that the office department

25  finds the investment practices hazardous to the financial

26  condition of the organization.  At any such hearing, the

27  office department shall have the burden of presenting a prima

28  facie case that the investment or investment practices are

29  hazardous to the financial condition of the organization.  If

30  the office department presents such a prima facie case, then

31  it shall be the organization's burden to demonstrate that the

                                 1962

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 1  investment or investment practices are not hazardous to the

 2  financial condition of the organization.

 3         (6)  GENERAL QUALIFICATIONS.--

 4         (b)  No security or investment shall be eligible for

 5  purchase at a price above its market value unless it is

 6  approved by the office department.

 7         (8)  EXCESSIVE COMMISSIONS AND CERTAIN INTERESTS

 8  PROHIBITED.--

 9         (a)  No health maintenance organization shall pay any

10  commission or brokerage for the purchase or sale of property,

11  whether real or personal, in excess of that usual and

12  customary at the time and in the locality where the purchases

13  or sales are made. Information regarding payments of

14  commissions and brokerage shall be maintained from the date of

15  the most recent examination by the office department pursuant

16  to s. 641.27 until the date of completion of the following

17  examination.

18         (b)  No health maintenance organization shall knowingly

19  invest in or loan upon any property, directly or indirectly,

20  whether real or personal, in which any officer or director of

21  the organization has a financial interest, nor shall any

22  organization make a loan of any kind to any officer or

23  director of the organization, except that:

24         1.  This paragraph shall not apply to loans in

25  circumstances in which the financial interest of the officer

26  or director is only nominal, trifling, or so remote as not to

27  give rise to a conflict of interest; and

28         2.  In any case, the office department may approve a

29  transaction between an organization and its officers or

30  directors under this paragraph if it is satisfied that:

31  

                                 1963

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 1         a.  The transaction is entered into in good faith for

 2  the advantage and benefit of the organization,

 3         b.  The amount of the proposed investment or loan does

 4  not violate any other provision of this part or exceed the

 5  reasonable, normal value of the property or the interest which

 6  the company proposed to acquire,

 7         c.  The transaction is otherwise fair and reasonable,

 8  and

 9         d.  The transaction will not adversely affect, to any

10  substantial degree, the liquidity of the organization's

11  investments or its ability thereafter to comply with

12  requirements of this part or the payment of its claims and

13  obligations.

14         (10)  PROPERTY USED IN THE HEALTH MAINTENANCE

15  ORGANIZATION'S BUSINESS.--Real estate, including leasehold

16  estates, for the convenient accommodation of the

17  organization's business operations, including home office,

18  branch administrative offices, hospitals, medical clinics,

19  medical professional buildings, and any other facility to be

20  used in the provision of health care services, or real estate

21  for rental to any health care provider under contract with the

22  organization to provide health care services which shall be

23  used in the provision of health care services to members of

24  the organization by that provider, is acceptable as an

25  investment on the following conditions:

26         (c)  The greater of the admitted value of the asset, as

27  determined by statutory accounting principles, or, if approved

28  by the office department, the health maintenance

29  organization's equity in the real estate plus all encumbrances

30  on the real estate owned by the organization under this

31  subsection, when added to the value of all personal and mixed

                                 1964

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 1  property used in the organization's business, shall not exceed

 2  75 percent of its admitted assets unless, with the permission

 3  of the office department, it finds that the percentage of its

 4  admitted assets is insufficient to provide convenient

 5  accommodation for the organization's business and the

 6  operations of the organization would not otherwise be

 7  impaired.

 8         (11)  INVESTMENTS IN ADMINISTRATIVE AND MANAGEMENT

 9  SERVICE ENTITIES AND OTHER HEALTH CARE PROVIDERS.--A health

10  maintenance organization may invest directly or indirectly in

11  real estate, common and preferred stocks, bonds or debentures,

12  including convertible debentures, or other evidences of debts

13  of or equity in an entity if the entity is owned by or, with

14  the approval of the office department, under contract to the

15  organization to provide management services, administrative

16  services, or health care services for the organization, on the

17  following conditions:

18         (a)  Investments authorized under this subsection shall

19  not exceed 50 percent of admitted assets, and these

20  investments shall be included in the calculation of the

21  overall limitation in paragraph (10)(c) relating to all real

22  and personal property.

23         (b)  Investments may qualify under this section only

24  insofar as a provider of management, administrative, or health

25  care service relationship as defined herein exists.  Upon

26  cessation of such relationship, each investment shall be

27  subject to the rules applicable to an investment of that type

28  and must qualify under the appropriate limitation or, failing

29  that, become ineligible and subject to disposal under

30  subsection (17).

31  

                                 1965

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 1         (12)  EXCHANGES OF FACILITIES OR ASSETS.--Health care

 2  or administrative service entities, if subsidiaries of or

 3  under contract to the health maintenance organization to

 4  provide administrative or health care services to the

 5  organization's members, may exchange facilities or similar

 6  assets to be used in the organization's business for stock of

 7  the organization. However, any exchange involving an entity

 8  under contract with the health maintenance organization must

 9  have the approval of the office department prior to the

10  exchange.  These facilities or assets shall be valued in

11  accordance with statutory accounting principles.

12         (14)  SPECIAL LIMITATION INVESTMENTS.--

13         (a)  After satisfying the requirements of this part,

14  any funds of the health maintenance organization may be

15  invested in the following investments, subject to a cost

16  limitation of 10 percent of its admitted assets in each

17  category of investment:

18         1.  Anticipation obligations of political subdivisions

19  of a state.--Anticipation obligations of any political

20  subdivision of any state of the United States, including, but

21  not limited to, bond anticipation notes, tax anticipation

22  notes, preliminary loan anticipation notes, revenue

23  anticipation notes, and construction anticipation notes, for

24  the payment of money within 12 months from the issuance of the

25  obligation, on the following conditions:

26         a.  The anticipation notes are a direct obligation of

27  the issuer under conditions set forth in subsection (9).

28         b.  The political subdivision is not in default in the

29  payment of the principal or interest on any of its direct

30  general obligations or any obligation guaranteed by such

31  political subdivision.

                                 1966

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 1         c.  The anticipated funds are specifically pledged to

 2  secure the obligations.

 3         2.  Revenue obligations of state or municipal public

 4  utilities.--Obligations of any state of the United States, a

 5  political subdivision thereof, or a public instrumentality of

 6  any one or more of the foregoing for the payment of money, on

 7  the following conditions:

 8         a.  The obligations are payable from revenues or

 9  earnings of a public utility of such state, political

10  subdivision, or public instrumentality which are specifically

11  pledged therefor.

12         b.  The law under which the obligations are issued

13  requires that such rates for service shall be charged and

14  collected at all times so as to produce sufficient revenue or

15  earning, together with any other revenues or moneys pledged,

16  to pay all operating and maintenance charges of the public

17  utility and all principal and interest on such charges.

18         c.  No prior or parity obligations payable from the

19  revenues or earnings of that public utility are in default at

20  the date of such investment.

21         3.  Other revenue obligations.--Obligations of any

22  state of the United States, a political subdivision thereof,

23  or a public instrumentality of any of the foregoing for the

24  payment of money, on the following conditions:

25         a.  The obligations are payable from revenues or

26  earnings, excluding revenues or earnings from public

27  utilities, specifically pledged therefor by such state,

28  political subdivision, or public instrumentality.

29         b.  No prior or parity obligation of the same issuer

30  payable from revenues or earnings from the same source has

31  been in default as to principal or interest during the 5 years

                                 1967

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 1  next preceding the date of the investment, but the issuer need

 2  not have been in existence for that period, and obligations

 3  acquired under this paragraph may be newly issued.

 4         4.  Corporate stocks.--Stocks, common or preferred, of

 5  any corporation created or existing under the laws of the

 6  United States or any state thereof.  The organization may

 7  invest in stocks, common or preferred, of any corporation

 8  created or existing under the laws of any foreign country if

 9  such stocks are listed and traded on a national securities

10  exchange in the United States or, in the alternative, if such

11  investment in stocks of any corporation created or existing

12  under the laws of any foreign country are first approved by

13  the office department. Investment in common stock of any one

14  corporation shall not exceed 3 percent of the health

15  maintenance organization's admitted assets.

16         (15)  INVESTMENT OF EXCESS FUNDS.--

17         (a)  After satisfying the requirements of this part,

18  any funds of a health maintenance organization in excess of

19  its statutorily required reserves and surplus may be invested:

20         1.  Without limitation in any investments otherwise

21  authorized by this part; or

22         2.  In such other investments not specifically

23  authorized by this part, provided such investments do not

24  exceed the lesser of 5 percent of the health maintenance

25  organization's admitted assets or 25 percent of the amount by

26  which a health maintenance organization's surplus exceeds its

27  statutorily required minimum surplus. A health maintenance

28  organization may exceed the limitations of this subparagraph

29  only with the prior written approval of the office department.

30         (b)  Nothing in this section authorizes a health

31  maintenance organization to:

                                 1968

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 1         1.  Invest any funds in excess of the amount by which

 2  its actual surplus exceeds its statutorily required minimum

 3  surplus; or

 4         2.  Make any investment prohibited by this code.

 5         (16)  PROHIBITED INVESTMENTS AND INVESTMENT

 6  UNDERWRITING.--

 7         (a)  In addition to investments excluded pursuant to

 8  other provisions of this act, a health maintenance

 9  organization shall not directly or indirectly invest in or

10  lend its funds upon the security of:

11         1.  Issued shares of its own capital stock, except in

12  connection with a plan approved by the office department for

13  purchase of the shares by the organization's officers,

14  employees, or agents. However, no such stock shall constitute

15  an asset of the organization in any determination of its

16  financial condition.

17         2.  Except with the consent of the office department,

18  securities issued by any corporation or enterprise the

19  controlling interest of which is, or will after such

20  acquisition by the organization be, held directly or

21  indirectly by the organization or any combination of the

22  organization and its directors, officers, parent corporation,

23  subsidiaries, or controlling stockholders. Investments in

24  health care providers under subsections (11) and (12) shall

25  not be subject to this provision.

26         3.  Any note or other evidence of indebtedness of any

27  director, officer, or controlling stockholder of the health

28  maintenance organization.

29         (b)  No health maintenance organization shall

30  underwrite or participate in the underwriting of an offering

31  of securities or property by any other person.

                                 1969

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 1         (17)  TIME LIMIT FOR DISPOSAL OF INELIGIBLE PROPERTY

 2  AND SECURITIES; EFFECT OF FAILURE TO DISPOSE.--

 3         (a)  Any property or securities lawfully acquired by a

 4  health maintenance organization which it could not otherwise

 5  have invested in or loaned its funds upon at the time of such

 6  acquisition shall be disposed of within 6 months from the date

 7  of acquisition, unless within such period the security has

 8  attained to the standard of eligibility; except that any

 9  security or property acquired under any agreement of merger or

10  consolidation may be retained for a longer period if so

11  provided in the plan for such merger or consolidation, as

12  approved by the office department.  Upon application by the

13  organization and proof to the office department that forced

14  sale of any such property or security would materially injure

15  the interests of the health maintenance organization, the

16  office department shall extend the disposal period for an

17  additional reasonable time.

18         (b)  Notwithstanding the provisions of paragraph (a),

19  any ineligible property or securities shall not be allowed as

20  an asset of the organization.

21         Section 1595.  Section 641.36, Florida Statutes, is

22  amended to read:

23         641.36  Adoption of rules; penalty for violation.--The

24  commission department shall adopt rules necessary to carry out

25  the provisions of this part.  The office department shall

26  collect and make available all health maintenance organization

27  rules adopted by the commission department.  Any violation of

28  a rule adopted under this section shall subject the violating

29  entity to the provisions of s. 641.23.

30         Section 1596.  Subsections (1), (2), and (5) of section

31  641.365, Florida Statutes, are amended to read:

                                 1970

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 1         641.365  Dividends.--

 2         (1)(a)  A health maintenance organization shall not pay

 3  any dividend or distribute cash or other property to

 4  stockholders except out of that part of its available and

 5  accumulated surplus funds which is derived from realized net

 6  operating profits on its business and net realized capital

 7  gains.

 8         (b)  Unless prior written approval is obtained from the

 9  office department, a health maintenance organization may not

10  pay or declare any dividend or distribute cash or other

11  property to or on behalf of any stockholder if, immediately

12  before or after such distribution, the health maintenance

13  organization's available and accumulated surplus funds, which

14  are derived from realized net operating profits on its

15  business and net realized gains, are or would be less than

16  zero.

17         (c)  A health maintenance organization may make

18  dividend payments or distributions to stockholders without the

19  prior written approval of the office department when:

20         1.  The dividend is equal to or less than the greater

21  of:

22         a.  Ten percent of the health maintenance

23  organization's accumulated surplus funds which are derived

24  from realized net operating profits on its business and net

25  realized capital gains as of the immediate preceding calendar

26  year; or

27         b.  The health maintenance organization's entire net

28  operating profit and realized net capital gains derived during

29  the immediately preceding calendar year.

30         2.  The health maintenance organization will have

31  surplus equal to or exceeding 115 percent of the minimum

                                 1971

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 1  required statutory surplus after the dividend or distribution

 2  is made.

 3         3.  The health maintenance organization has filed a

 4  notice with the office department at least 30 days prior to

 5  the dividend payment or distribution, or such shorter period

 6  of time as approved by the office department on a case-by-case

 7  basis.

 8         4.  The notice includes a certification by an officer

 9  of the health maintenance organization attesting that after

10  payment of the dividend or distribution the health maintenance

11  organization will have at least 115 percent of required

12  statutory surplus.

13         5.  The health maintenance organization has negative

14  retained earnings, statutory surplus in excess of $50 million,

15  and statutory surplus greater than or equal to 150 percent of

16  its required statutory surplus before and after the dividend

17  distribution is made based upon the health maintenance

18  organization's most recently filed annual financial statement.

19         (2)  The office department shall not approve a dividend

20  or distribution in excess of the maximum amount allowed in

21  subsection (1) unless it determines that the distribution or

22  dividend would not jeopardize the financial condition of the

23  health maintenance organization, considering:

24         (a)  The liquidity, quality, and diversification of the

25  health maintenance organization's assets and the effect on its

26  ability to meet its obligations.

27         (b)  Any reduction of investment portfolio and

28  investment income.

29         (c)  History of capital contributions.

30         (d)  Prior dividend distributions of the health

31  maintenance organization.

                                 1972

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 1         (e)  Whether the dividend is only a pass-through

 2  dividend from a subsidiary of the health maintenance

 3  organization.

 4         (5)  The office department may revoke or suspend the

 5  certificate of authority of a health maintenance organization

 6  which has declared or paid such an illegal dividend.

 7         Section 1597.  Section 641.385, Florida Statutes, is

 8  amended to read:

 9         641.385  Order to discontinue certain advertising.--If

10  in the opinion of the office department any advertisement by a

11  health maintenance organization violates any of the provisions

12  of this part, the department may enter an immediate order

13  requiring that the use of the advertisement be discontinued.

14  If requested by the health maintenance organization, the

15  office department shall conduct a hearing within 10 days of

16  the entry of such order.  If, after the hearing or by

17  agreement with the health maintenance organization, a final

18  determination is made that the advertising was in fact

19  violative of any provision of this part, the office department

20  may, in lieu of revocation of the certificate of authority,

21  require the publication of a corrective advertisement; impose

22  an administrative penalty of up to $10,000; and, in the case

23  of an initial solicitation, require that the health

24  maintenance organization, prior to accepting any application

25  received in response to the advertisement, provide an

26  acceptable clarification of the advertisement to each

27  individual applicant.

28         Section 1598.  Subsection (1) of section 641.39001,

29  Florida Statutes, is amended to read:

30  

31  

                                 1973

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 1         641.39001  Soliciting or accepting new or renewal

 2  health maintenance contracts by insolvent or impaired health

 3  maintenance organization prohibited; penalty.--

 4         (1)  Whether or not delinquency proceedings as to a

 5  health maintenance organization have been or are to be

 6  initiated, a director or officer of a health maintenance

 7  organization, except with the written permission of the office

 8  Department of Insurance, may not authorize or permit the

 9  health maintenance organization to solicit or accept new or

10  renewal health maintenance contracts or provider contracts in

11  this state after the director or officer knew, or reasonably

12  should have known, that the health maintenance organization

13  was insolvent or impaired. As used in this section, the term

14  "impaired" means that the health maintenance organization does

15  not meet the requirements of s. 641.225.

16         Section 1599.  Subsections (6) and (10) of section

17  641.3903, Florida Statutes, are amended to read:

18         641.3903  Unfair methods of competition and unfair or

19  deceptive acts or practices defined.--The following are

20  defined as unfair methods of competition and unfair or

21  deceptive acts or practices:

22         (6)  FAILURE TO MAINTAIN COMPLAINT-HANDLING

23  PROCEDURES.--Failure of any person to maintain a complete

24  record of all the complaints received since the date of the

25  most recent examination of the health maintenance organization

26  by the office department.  For the purposes of this

27  subsection, the term "complaint" means any written

28  communication primarily expressing a grievance and requesting

29  a remedy to the grievance.

30         (10)  ILLEGAL DEALINGS IN PREMIUMS; EXCESS OR REDUCED

31  CHARGES FOR HEALTH MAINTENANCE COVERAGE.--

                                 1974

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 1         (a)  Knowingly collecting any sum as a premium or

 2  charge for health maintenance coverage which is not then

 3  provided or is not in due course to be provided, subject to

 4  acceptance of the risk by the health maintenance organization,

 5  by a health maintenance contract issued by a health

 6  maintenance organization as permitted by this part.

 7         (b)  Knowingly collecting as a premium or charge for

 8  health maintenance coverage any sum in excess of or less than

 9  the premium or charge applicable to health maintenance

10  coverage, in accordance with the applicable classifications

11  and rates as filed with the office department, and as

12  specified in the health maintenance contract.

13         Section 1600.  Section 641.3905, Florida Statutes, is

14  amended to read:

15         641.3905  General powers and duties of the department

16  and office.--In addition to the powers and duties set forth in

17  s. 624.307, the department and office shall each have the

18  power within its respective regulatory jurisdiction to examine

19  and investigate the affairs of every person, entity, or health

20  maintenance organization in order to determine whether the

21  person, entity, or health maintenance organization is

22  operating in accordance with the provisions of this part or

23  has been or is engaged in any unfair method of competition or

24  in any unfair or deceptive act or practice prohibited by s.

25  641.3901, and each shall have the powers and duties specified

26  in ss. 641.3907-641.3913 in connection therewith.

27         Section 1601.  Section 641.3907, Florida Statutes, is

28  amended to read:

29         641.3907  Defined unfair practices; hearings,

30  witnesses, appearances, production of books, and service of

31  process.--

                                 1975

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 1         (1)  Whenever the department or office has reason to

 2  believe that any person, entity, or health maintenance

 3  organization has engaged, or is engaging, in this state in any

 4  unfair method of competition or any unfair or deceptive act or

 5  practice as defined in s. 641.3903 or is operating a health

 6  maintenance organization without a certificate of authority as

 7  required by this part and that a proceeding by it in respect

 8  thereto would be to the interest of the public, the department

 9  or office shall conduct or cause to have conducted a hearing

10  in accordance with chapter 120.

11         (2)  The department or office, a duly empowered hearing

12  officer, or an administrative law judge shall, during the

13  conduct of such hearing, have those powers enumerated in s.

14  120.569; however, the penalties for failure to comply with a

15  subpoena or with an order directing discovery shall be limited

16  to a fine not to exceed $1,000 per violation.

17         (3)  Statements of charges, notices, and orders under

18  this part may be served by anyone duly authorized by the

19  department or office, either in the manner provided by law for

20  service of process in civil actions or by certifying and

21  mailing a copy thereof to the person, entity, or health

22  maintenance organization affected by the statement, notice,

23  order, or other process at her or his or its residence or

24  principal office or place of business.  The verified return by

25  the person so serving such statement, notice, order, or other

26  process, setting forth the manner of the service, shall be

27  proof of the same, and the return postcard receipt for such

28  statement, notice, order, or other process, certified and

29  mailed as aforesaid, shall be proof of service of the same.

30         Section 1602.  Section 641.3909, Florida Statutes, is

31  amended to read:

                                 1976

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 1         641.3909  Cease and desist and penalty orders.--After

 2  the hearing provided in s. 641.3907, the department or office

 3  shall enter a final order in accordance with s. 120.569. If it

 4  is determined that the person, entity, or health maintenance

 5  organization charged has engaged in an unfair or deceptive act

 6  or practice or the unlawful operation of a health maintenance

 7  organization without a subsisting certificate of authority,

 8  the department or office shall also issue an order requiring

 9  the violator to cease and desist from engaging in such method

10  of competition, act, or practice or unlawful operation of a

11  health maintenance organization. Further, if the act or

12  practice constitutes a violation of s. 641.3155, s. 641.3901,

13  or s. 641.3903, the department or office may, at its

14  discretion, order any one or more of the following:

15         (1)  Suspension or revocation of the health maintenance

16  organization's certificate of authority if it knew, or

17  reasonably should have known, it was in violation of this

18  part.

19         (2)  If it is determined that the person or entity

20  charged has engaged in the business of operating a health

21  maintenance organization without a certificate of authority,

22  an administrative penalty not to exceed $1,000 for each health

23  maintenance contract offered or effectuated.

24         Section 1603.  Section 641.3911, Florida Statutes, is

25  amended to read:

26         641.3911  Appeals from the department or office.--Any

27  person, entity, or health maintenance organization subject to

28  an order of the department or office under s. 641.3909 or s.

29  641.3913 may obtain a review of the order by filing an appeal

30  therefrom in accordance with the provisions and procedures for

31  appeal under s. 120.68.

                                 1977

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 1         Section 1604.  Section 641.3913, Florida Statutes, is

 2  amended to read:

 3         641.3913  Penalty for violation of cease and desist

 4  orders.--Any person, entity, or health maintenance

 5  organization which violates a cease and desist order of the

 6  department or office under s. 641.3909 while such order is in

 7  effect, after notice and hearing as provided in s. 641.3907,

 8  shall be subject, at the discretion of the department or

 9  office, to any one or more of the following:

10         (1)  A monetary penalty of not more than $200,000 as to

11  all matters determined in such hearing.

12         (2)  Suspension or revocation of the health maintenance

13  organization's certificate of authority.

14         Section 1605.  Section 641.3917, Florida Statutes, is

15  amended to read:

16         641.3917  Civil liability.--The provisions of this part

17  are cumulative to rights under the general civil and common

18  law, and no action of the department or office shall abrogate

19  such rights to damage or other relief in any court.

20         Section 1606.  Subsections (3), (10), and (14) of

21  section 641.3922, Florida Statutes, are amended to read:

22         641.3922  Conversion contracts; conditions.--Issuance

23  of a converted contract shall be subject to the following

24  conditions:

25         (3)  CONVERSION PREMIUM.--The premium for the converted

26  contract shall be determined in accordance with premium rates

27  applicable to the age and class of risk of each person to be

28  covered under the converted contract and to the type and

29  amount of coverage provided. However, the premium for the

30  converted contract may not exceed 200 percent of the standard

31  risk rate, as established by the office department under s.

                                 1978

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 1  627.6675(3). The mode of payment for the converted contract

 2  shall be quarterly or more frequently at the option of the

 3  organization, unless otherwise mutually agreed upon between

 4  the subscriber and the organization.

 5         (10)  ALTERNATE PLANS.--The health maintenance

 6  organization shall offer a standard health benefit plan as

 7  established pursuant to s. 627.6699(12). The health

 8  maintenance organization may, at its option, also offer

 9  alternative plans for group health conversion in addition to

10  those required by this section, provided any alternative plan

11  is approved by the office department or is a converted policy,

12  approved under s. 627.6675 and issued by an insurance company

13  authorized to transact insurance in this state. Approval by

14  the office department of an alternative plan shall be based on

15  compliance by the alternative plan with the provisions of this

16  part and the rules promulgated thereunder, applicable

17  provisions of the Florida Insurance Code and rules promulgated

18  thereunder, and any other applicable law.

19         (14)  NOTIFICATION.--A notification of the conversion

20  privilege shall be included in each health maintenance

21  contract and in any certificate or member's handbook. The

22  organization shall mail an election and premium notice form,

23  including an outline of coverage, on a form approved by the

24  office department, within 14 days after any individual who is

25  eligible for a converted health maintenance contract gives

26  notice to the organization that the individual is considering

27  applying for the converted contract or otherwise requests such

28  information. The outline of coverage must contain a

29  description of the principal benefits and coverage provided by

30  the contract and its principal exclusions and limitations,

31  including, but not limited to, deductibles and coinsurance.

                                 1979

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 1         Section 1607.  Section 641.402, Florida Statutes, is

 2  amended to read:

 3         641.402  Definitions.--As used in this part, the term:

 4         (1)  "Basic services" includes any of the following:

 5  emergency care, physician care other than hospital inpatient

 6  physician services, ambulatory diagnostic treatment, and

 7  preventive health care services.

 8         (2)  "Department" means the Department of Insurance.

 9         (2)(3)  "Guaranteeing organization" means an

10  organization that which is domiciled in the United States;

11  that which has authorized service of process against it; and

12  that which has appointed the Chief Financial Officer Insurance

13  Commissioner and Treasurer as its agent for service of process

14  in connection with any cause of action arising in this state,

15  based upon any guarantee entered into under this part.

16         (3)(4)  "Insolvent" or "insolvency" means the inability

17  of a prepaid health clinic to discharge its liabilities as

18  they become due in the normal course of business.

19         (4)(5)  "Prepaid health clinic" means any organization

20  authorized under this part which provides, either directly or

21  through arrangements with other persons, basic services to

22  persons enrolled with such organization, on a prepaid per

23  capita or prepaid aggregate fixed-sum basis, including those

24  basic services which subscribers might reasonably require to

25  maintain good health. However, no clinic that which provides

26  or contracts for, either directly or indirectly, inpatient

27  hospital services, hospital inpatient physician services, or

28  indemnity against the cost of such services shall be a prepaid

29  health clinic.

30         (5)(6)  "Prepaid health clinic contract" means any

31  contract entered into by a prepaid health clinic with a

                                 1980

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 1  subscriber or group of subscribers to provide any of the basic

 2  services in exchange for a prepaid per capita or prepaid

 3  aggregate fixed sum.

 4         (6)(7)  "Provider" means any physician or person other

 5  than a hospital that furnishes health care services and is

 6  licensed or authorized to practice in this state.

 7         (7)(8)  "Reporting period" means the particular span of

 8  time by or for which accounts are redeemed on an annualized

 9  basis.

10         (8)(9)  "Subscriber" means an individual who has

11  contracted, or on whose behalf a contract has been entered

12  into, with a prepaid health clinic for health care services.

13         (9)(10)  "Surplus" means total unencumbered assets in

14  excess of total liabilities. Surplus includes capital stock,

15  capital in excess of par, and retained earnings and may

16  include surplus notes.

17         (10)(11)  "Surplus notes" means debt that which has

18  been guaranteed by the United States Government or its

19  agencies or debt that which has been subordinated to all

20  claims of subscribers and general creditors of the prepaid

21  health clinic.

22         Section 1608.  Section 641.403, Florida Statutes, is

23  amended to read:

24         641.403  Rulemaking authority.--The commission may

25  Department of Insurance has authority to adopt rules pursuant

26  to ss. 120.536(1) and 120.54 to implement the provisions of

27  this part.

28         Section 1609.  Section 641.405, Florida Statutes, is

29  amended to read:

30         641.405  Application for certificate of authority to

31  operate prepaid health clinic.--

                                 1981

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 1         (1)  No person may operate a prepaid health clinic

 2  without first obtaining a certificate of authority from the

 3  office department. The office department shall not issue a

 4  certificate of authority to any applicant which does not

 5  possess a valid Health Care Provider Certificate issued by the

 6  Agency for Health Care Administration.

 7         (2)  Each application for a certificate of authority

 8  shall be on such form as the commission department prescribes,

 9  and such application shall be accompanied by:

10         (a)  A copy of the basic organizational document of the

11  applicant, if any, such as the articles of incorporation,

12  articles of association, partnership agreement, trust

13  agreement, or other applicable document, and all amendments to

14  such document.

15         (b)  A copy of the constitution, bylaws, rules and

16  regulations, or similar form of document, if any, regulating

17  the conduct of the affairs of the applicant.

18         (c)  A list of the names, addresses, and official

19  capacities with the applicant of the persons who are to be

20  responsible for the conduct of the affairs of the clinic,

21  including all members of the governing body, the officers and

22  directors in the case of a corporation, and the partners or

23  associates in the case of a partnership or association. Such

24  persons shall fully disclose to the office department and the

25  governing body of the clinic the extent and nature of any

26  contracts or arrangements between them and the clinic,

27  including any possible conflicts of interest.

28         (d)  A statement generally describing the clinic and

29  its operations.

30         (e)  Each form of prepaid health clinic contract that

31  the applicant proposes to offer the subscribers, showing for

                                 1982

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 1  each form of contract the benefits to which the subscribers

 2  are entitled, together with a table of the rates charged, or

 3  proposed to be charged.

 4         (f)  A copy of the applicant's Health Care Provider

 5  Certificate from the Agency for Health Care Administration,

 6  issued pursuant to part III of this chapter.

 7         (g)  A financial statement prepared on the basis of

 8  generally accepted accounting principles, except that surplus

 9  notes acceptable to the office department may be included in

10  the calculation of surplus.

11         Section 1610.  Section 641.406, Florida Statutes, is

12  amended to read:

13         641.406  Issuance of certificate of authority.--The

14  office department shall issue a certificate of authority for a

15  prepaid health clinic to any applicant filing a properly

16  completed application in conformity with s. 641.405, upon

17  payment of the prescribed fees and upon the office's

18  department's being satisfied that:

19         (1)  As a condition precedent to the issuance of any

20  certificate, the applicant has obtained a Health Care Provider

21  Certificate from the Agency for Health Care Administration

22  pursuant to part III of this chapter.

23         (2)  The proposed rates are actuarially sound for the

24  benefits provided, including administrative costs.

25         (3)  The applicant has met the minimum surplus

26  requirements of s. 641.407.

27         (4)  The procedures for offering basic services and

28  offering and terminating contracts to subscribers will not

29  unfairly discriminate on the basis of age, health, or economic

30  status. However, this subsection does not prohibit reasonable

31  

                                 1983

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 1  underwriting classifications for the purposes of establishing

 2  contract rates, nor does it prohibit experience rating.

 3         (5)  The procedures for offering basic services and

 4  offering and terminating contracts to subscribers will not

 5  discriminate on the basis of sex, race, or national origin.

 6         (6)  The applicant furnishes evidence of adequate

 7  insurance coverage or an adequate plan for self-insurance to

 8  respond to claims for injuries arising out of the furnishing

 9  of basic services.

10         (7)  The ownership, control, or management of the

11  applicant is competent and trustworthy and possesses

12  managerial experience that would make the proposed clinic

13  operation beneficial to the subscribers. The office department

14  shall not grant or continue authority to transact the business

15  of a prepaid health clinic in this state at any time during

16  which the office department has good reason to believe that

17  the ownership, control, or management of the clinic is under

18  the control of any person whose business operations are or

19  have been marked by business practices or conduct that is to

20  the detriment of the public, stockholders, investors, or

21  creditors; by the improper manipulation of assets or of

22  accounts; or by bad faith.

23         (8)  The application and the applicant are in

24  conformity with all requirements of this part.

25         Section 1611.  Section 641.4065, Florida Statutes, is

26  amended to read:

27         641.4065  Insurance business not authorized.--Nothing

28  in the Florida Insurance Code or this part shall be deemed to

29  authorize any prepaid health clinic to transact any insurance

30  business other than that issuing prepaid health clinic

31  contracts or otherwise to engage in any other type of

                                 1984

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 1  insurance unless it is authorized under a certificate of

 2  authority issued by the office department under the provisions

 3  of the Florida Insurance Code.

 4         Section 1612.  Subsection (2) of section 641.407,

 5  Florida Statutes, is amended to read:

 6         641.407  Minimum surplus.--

 7         (2)  In lieu of having any minimum surplus, the prepaid

 8  health clinic may provide a written guaranty to assure payment

 9  of covered subscriber claims if the guaranteeing organization

10  has been in operation for at least 3 years and has a surplus,

11  not including land, buildings, and equipment, equal to the

12  product of 2 times the amount of the required statutory

13  surplus. Such guaranteeing organization and such written

14  guaranty must be acceptable to, and approved by, the office

15  department. The office department shall consider the

16  likelihood of the payment of subscriber claims in granting or

17  withholding such approval.

18         Section 1613.  Section 641.409, Florida Statutes, is

19  amended to read:

20         641.409  Insolvency protection.--

21         (1)  Every prepaid health clinic shall comply with one

22  of the following paragraphs:

23         (a)  The prepaid health clinic shall secure insurance

24  to the satisfaction of the office department to protect

25  subscribers in the event the prepaid health clinic is unable

26  to meet its obligations to subscribers under the terms of any

27  prepaid health clinic contract issued to a subscriber.

28         (b)  The prepaid health clinic shall file with the

29  office department a surety bond issued by an authorized surety

30  insurer. The bond shall be for the same purpose as the

31  insurance in lieu of which the bond is filed. The office

                                 1985

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 1  department shall not approve any bond under the terms of which

 2  the protection afforded against insolvency is not equivalent

 3  to the protection afforded by such insurance. The bond shall

 4  guarantee that the prepaid health clinic will faithfully and

 5  truly perform all the conditions of any prepaid health clinic

 6  contract.  No such bond shall be canceled or subject to

 7  cancellation unless at least 60 days' notice of the

 8  cancellation, in writing, is filed with the office department.

 9  In the event that the notice of termination of the bond is

10  filed with the office department, the prepaid health clinic

11  insured under the bond shall, within 30 days of the filing of

12  the notice of termination, provide the office department with

13  a replacement bond meeting the requirements of this part or

14  secure insurance as required by paragraph (a). The

15  cancellation of a bond does not relieve the obligation of the

16  issuer of the bond for claims arising out of contracts issued

17  prior to the cancellation of the bond unless a replacement

18  bond or insurance is secured. In no event shall the issuer's

19  aggregate liability under the bond exceed the face amount of

20  the bond. If, within 30 days of filing the notice of

21  termination, a replacement bond or insurance has not been

22  secured and filed with the office department, the office

23  department shall suspend the certificate of the prepaid health

24  clinic until the deposit requirements are satisfied. Whenever

25  the prepaid health clinic ceases to do business in this state

26  and furnishes to the office department satisfactory proof that

27  it has discharged or otherwise adequately provided for all of

28  its obligations to its subscribers, the office department

29  shall release any bond filed by the prepaid health clinic.

30         (2)  In determining the sufficiency of the insurance

31  required under paragraph (1)(a) or the surety bond required

                                 1986

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 1  under paragraph (1)(b), the office department may consider the

 2  number of subscribers, the basic services included in

 3  subscriber contracts, and the cost of providing such basic

 4  services to subscribers in the geographic area served.

 5         (3)  Every prepaid health clinic shall deposit with the

 6  department a cash deposit in the amount of $30,000 to

 7  guarantee that the obligations to the subscribers will be

 8  performed.

 9         Section 1614.  Section 641.41, Florida Statutes, is

10  amended to read:

11         641.41  Annual report of prepaid health clinic;

12  administrative penalty.--

13         (1)  Each prepaid health clinic shall file a report

14  with the office department, annually on or before March 1, or

15  within 3 months of the end of the reporting period of the

16  clinic, or within such extension of time for the filing of the

17  report as the office department, for good cause, may grant.

18  The report of the prepaid health clinic must be filed on forms

19  prescribed by the commission department and must be verified

20  under oath by two executive officers of the clinic or, if the

21  clinic is not a corporation, verified under oath by two

22  persons who are principal managing directors of the affairs of

23  the clinic.  The report of the clinic shall show the condition

24  of the clinic on the last day of the immediately preceding

25  reporting period.  Such report shall include:

26         (a)  A financial statement of the clinic, including its

27  balance sheet and a statement of operations for the preceding

28  year;

29         (b)  A list of the name and residence address of every

30  person responsible for the conduct of the affairs of the

31  clinic, together with a disclosure of the extent and nature of

                                 1987

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 1  any contract or arrangement between such person and the

 2  clinic, including any possible conflicts of interest;

 3         (c)  The number of prepaid health clinic contracts

 4  issued and outstanding, and the number of prepaid health

 5  clinic contracts terminated and a compilation of the reasons

 6  for such terminations;

 7         (d)  Such statistical information as is requested by

 8  the commission or office department, which information shows

 9  the rates of the clinic for all basic services provided under

10  prepaid health clinic contracts;

11         (e)  The number and amount of damage claims for medical

12  injury initiated against the clinic and any of the providers

13  engaged by it during the reporting year, broken down into

14  claims with and without formal legal process, and the

15  disposition, if any, of each such claim; and

16         (f)  Such other information relating to the performance

17  of the clinic as is required by the commission or office

18  department.

19         (2)  Any clinic which neglects to file the annual

20  report in the form and within the time required by this

21  section is subject to an administrative penalty, not to exceed

22  $100 for each day during which the neglect continues; and,

23  upon notice by the office department to that effect, the

24  authority of the clinic to do business in this state shall

25  cease while such default continues.

26         Section 1615.  Section 641.412, Florida Statutes, is

27  amended to read:

28         641.412  Fees.--

29         (1)  Every prepaid health clinic shall pay to the

30  office department the following fees:

31  

                                 1988

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 1         (a)  For filing a copy of its application for a

 2  certificate of authority or an amendment to such certificate,

 3  a nonrefundable fee in the amount of $150.

 4         (b)  For filing each annual report, a fee in the amount

 5  of $150.

 6         (2)  The fees charged under this section shall be

 7  distributed as follows:

 8         (a)  One-third of the total amount of fees shall be

 9  distributed to the Agency for Health Care Administration; and

10         (b)  Two-thirds of the total amount of fees shall be

11  distributed to the office Department of Insurance.

12         Section 1616.  Section 641.418, Florida Statutes, is

13  amended to read:

14         641.418  Examination of prepaid health clinic by the

15  office department.--The office department shall examine the

16  affairs, transactions, accounts, business records, and assets

17  of any prepaid health clinic as often as the office department

18  deems it expedient for the protection of the people of this

19  state.  Every clinic shall submit its books and records and

20  take other appropriate action as may be necessary to

21  facilitate an examination.  However, medical records of

22  individuals and records of physicians providing services under

23  contracts to the clinic are not subject to audit, although

24  such records may be subject to subpoena by court order upon a

25  showing of good cause.  For the purpose of examinations, the

26  office department may administer oaths to and examine the

27  officers and agents of a clinic concerning its business and

28  affairs.  The expenses for the examination of each clinic by

29  the office department are subject to the same terms and

30  conditions that apply to insurers under part II of chapter

31  

                                 1989

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 1  624. In no event shall the expenses of all examinations exceed

 2  the maximum amount of $15,000 per year.

 3         Section 1617.  Subsections (2), (3), (5), and (7) of

 4  section 641.42, Florida Statutes, is amended to read:

 5         641.42  Prepaid health clinic contracts.--

 6         (2)  The rates charged by any clinic to its subscribers

 7  shall not be excessive, inadequate, or unfairly

 8  discriminatory. The commission department, in accordance with

 9  generally accepted actuarial practice, may define by rule what

10  constitutes excessive, inadequate, or unfairly discriminatory

11  rates and may require whatever information the commission

12  department deems necessary to determine that a rate or

13  proposed rate meets the requirements of this subsection.

14         (3)  No clinic shall issue or agree to issue any

15  prepaid health clinic contract to a subscriber unless the

16  contract has first been filed with, and approved by, the

17  office department.

18         (5)  Every subscriber shall receive a clear and

19  understandable description of the method of the clinic for

20  resolving subscriber grievances; such method shall be set

21  forth in the contract and shall be approved by the office

22  department on the basis of its underlying fairness.

23         (7)(a)  If a clinic desires to amend any contract with

24  any of its subscribers or desires to change any rate charged

25  for the contract, the clinic may do so, upon filing with the

26  office department the proposed amendment or change in rates.

27         (b)  No prepaid health clinic contract form or

28  application form when written application is required and is

29  to be made a part of the policy or contract, or no printed

30  amendment, addendum, rider, or endorsement form or form of

31  renewal certificate, shall be delivered or issued for delivery

                                 1990

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 1  in this state, unless the form has been filed with the office

 2  department at its offices in Tallahassee by or in behalf of

 3  the clinic which proposes to use such form and has been

 4  approved by the office department. Every such filing shall be

 5  made not less than 30 days in advance of any such use or

 6  delivery. At the expiration of such 30 days, the form so filed

 7  shall be deemed approved unless prior to the end of the 30

 8  days the form has been affirmatively approved or disapproved

 9  by the office department. The approval of any such form by the

10  office department constitutes a waiver of any unexpired

11  portion of such waiting period. The office department may

12  extend by not more than an additional 15 days the period

13  within which the office department may so affirmatively

14  approve or disapprove any such form, by giving notice of such

15  extension before the expiration of the initial 30-day period.

16  At the expiration of any such period as so extended, and in

17  the absence of such prior affirmative approval or disapproval,

18  such form shall be deemed approved. The office department may,

19  for cause, withdraw a previous approval. No clinic shall issue

20  or use any form which has been disapproved by the office

21  department or any form for which the office department has

22  withdrawn approval.

23         (c)  The office department shall disapprove any form

24  filed under this subsection, or withdraw any previous approval

25  of the form, only if the form:

26         1.  Is in any respect in violation of, or does not

27  comply with, any provision of this part or rule adopted under

28  this part.

29         2.  Contains or incorporates by reference, where such

30  incorporation is otherwise permissible, any inconsistent,

31  ambiguous, or misleading clauses, or exceptions and conditions

                                 1991

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 1  which deceptively affect the risk purported to be assumed in

 2  the general coverage of the contract.

 3         3.  Has a misleading title, misleading heading, or

 4  other indication of the provisions of the form which is

 5  misleading.

 6         4.  Is printed or otherwise reproduced in such manner

 7  as to render any material provision of the form substantially

 8  illegible.

 9         5.  Provides benefits which are unreasonable in

10  relation to the rate charged or contains provisions which are

11  unfair, inequitable, or contrary to the public policy of this

12  state or encourage misrepresentation.

13         (d)  In determining whether the benefits are reasonable

14  in relation to the rate charged, the office department, in

15  accordance with reasonable actuarial techniques, shall

16  consider:

17         1.  Past loss experience and prospective loss

18  experience.

19         2.  Allocation of expenses.

20         3.  Risk and contingency margins, along with

21  justification of such margins.

22         4.  Acquisition costs.

23         5.  Other factors deemed appropriate by the office

24  department, based on sound actuarial techniques.

25         Section 1618.  Section 641.421, Florida Statutes, is

26  amended to read:

27         641.421  Language used in contracts and advertisements;

28  translations.--

29         (1)(a)  All prepaid health clinic contracts or forms

30  shall be printed in English.

31  

                                 1992

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 1         (b)  If the negotiations by a prepaid health clinic

 2  with a subscriber leading up to the effectuation of a prepaid

 3  health clinic contract are conducted in a language other than

 4  English, the prepaid health clinic shall supply to the

 5  subscriber a written translation of the contract, which

 6  translation accurately reflects the substance of the contract

 7  and is in the language used to negotiate the contract. Any

 8  such translation shall be furnished to the office department

 9  as part of the filing of the prepaid health clinic contract

10  form and shall be approved by the office department prior to

11  use. No translation of a prepaid health clinic contract form

12  shall be approved by the office department unless the

13  translation accurately reflects the substance of the prepaid

14  health clinic contract form in translation. When a translation

15  of a prepaid health clinic contract is used, the translation

16  shall clearly and conspicuously state on its face and in the

17  language of the translation:

18  

19                         READ THIS FIRST

20         This is a translation of the document that you are

21  about to sign.

22  

23         (2)  All advertisements by a prepaid health clinic, if

24  printed or broadcast in a language other than English, also

25  shall be available in English and shall be furnished to the

26  office department upon request. As used in this subsection,

27  the term "advertisement" means any advertisement, circular,

28  pamphlet, brochure, or other printed material disclosing or

29  disseminating advertising material or information by a clinic

30  to prospective or existing subscribers and includes any radio

31  or television transmittal of an advertisement or information.

                                 1993

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 1         Section 1619.  Subsection (2) of section 641.424,

 2  Florida Statutes, is amended to read:

 3         641.424  Validity of noncomplying contracts.--

 4         (2)  Any contract delivered or issued for delivery in

 5  this state covering a subscriber resident, located, or to be

 6  performed in this state, which subscriber, pursuant to the

 7  provisions of this part, the clinic may not lawfully provide

 8  under such a contract, is cancelable at any time by the

 9  clinic, any provision of the contract to the contrary

10  notwithstanding; and the clinic shall promptly cancel the

11  contract in accordance with the request of the office

12  department for such cancellation. No such illegality or

13  cancellation shall be deemed to relieve the clinic of any

14  liability incurred by the clinic under the contract while the

15  contract was in force or to prohibit the clinic from retaining

16  the pro rata earned premium on the contract.  This provision

17  does not relieve the clinic from any penalty otherwise

18  incurred by the clinic under this part on account of any such

19  violation.

20         Section 1620.  Section 641.437, Florida Statutes, is

21  amended to read:

22         641.437  Investigatory power of office department.--The

23  office department has the power to examine and investigate the

24  affairs of every person, entity, or prepaid health clinic in

25  order to determine whether the person, entity, or prepaid

26  health clinic is operating in accordance with the provisions

27  of this part or has been or is engaged in any unfair method of

28  competition or any unfair or deceptive act or practice

29  prohibited by s. 641.44.

30         Section 1621.  Section 641.443, Florida Statutes, is

31  amended to read:

                                 1994

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 1         641.443  Temporary restraining orders.--

 2         (1)  The office department is vested with the power to

 3  seek a temporary restraining order:

 4         (a)  On behalf of the office department or on behalf of

 5  a subscriber or subscribers of a prepaid health clinic that is

 6  being operated by a person or entity without a subsisting

 7  certificate of authority; or

 8         (b)  On behalf of the office department or on behalf of

 9  a subscriber or subscribers to whom a prepaid health clinic,

10  person, or entity is issuing, delivering, or renewing prepaid

11  health clinic contracts without an existing certificate of

12  authority.

13         (2)  The office department and the Agency for Health

14  Care Administration are each vested with the power to seek a

15  temporary restraining order on their behalf or on behalf of a

16  subscriber or subscribers of a prepaid health clinic that is

17  being operated in violation of any provision of this part or

18  any rule promulgated under this part, or any other applicable

19  law or rule.

20         Section 1622.  Section 641.444, Florida Statutes, is

21  amended to read:

22         641.444  Injunction.--In addition to the penalties and

23  other enforcement provisions of this part, if a person,

24  entity, or prepaid health clinic has engaged in any activity

25  prohibited by this part or any rule adopted pursuant to this

26  part, the office department may resort to a proceeding for

27  injunction in the circuit court of the county where such

28  person, entity, or prepaid health clinic is located or has her

29  or his or its principal place of business; and the office

30  department may apply in such court for such temporary and

31  permanent orders as the office department may deem necessary

                                 1995

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 1  to restrain the person, entity, or prepaid health clinic from

 2  engaging in any such activity, until the person, entity, or

 3  prepaid health clinic complies with the provisions and rules.

 4         Section 1623.  Section 641.445, Florida Statutes, is

 5  amended to read:

 6         641.445  Defined practices; hearings, witnesses,

 7  appearances, production of books, and service of process.--

 8         (1)  Whenever the office department has reason to

 9  believe that a person, entity, or prepaid health clinic has

10  engaged, or is engaging, in this state in any unfair method of

11  competition or any unfair or deceptive act or practice as

12  defined in s. 641.441, or is operating a prepaid health clinic

13  without a certificate of authority as required by this part or

14  otherwise operating in violation of any provision of this part

15  or rule adopted pursuant to this part, and that a proceeding

16  by the office department in respect thereto would be in the

17  interest of the public, the office department shall conduct,

18  or cause to have conducted, a hearing in accordance with

19  chapter 120.

20         (2)  The office department, a duly empowered hearing

21  officer, or an administrative law judge shall, during the

22  conduct of such hearing, have those powers enumerated in s.

23  120.569; however, the penalty for the failure to comply with a

24  subpoena or with an order directing discovery is limited to a

25  fine not to exceed $1,000 per violation.

26         (3)  A statement of charges, notice, or order under

27  this part may be served by anyone duly authorized by the

28  office department, either in the manner provided by law for

29  service of process in civil actions or by certifying and

30  mailing a copy of the statement of charges, notice, or order

31  to the person, entity, or prepaid health clinic affected by

                                 1996

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 1  the statement, notice, or order or other process at his or her

 2  or its residence or principal office or place of business.

 3  The verified return by the person so serving such statement,

 4  notice, or order or other process, setting forth the manner of

 5  the service, is proof of such service; and the return postcard

 6  receipt for such statement, notice, or order or other process,

 7  certified and mailed as provided in this subsection, is proof

 8  of the service of the statement, notice, or order or other

 9  process.

10         Section 1624.  Section 641.446, Florida Statutes, is

11  amended to read:

12         641.446  Cease and desist and penalty orders.--After

13  the hearing provided in s. 641.445, the office department

14  shall enter a final order in accordance with s. 120.569. If it

15  is determined that the person, entity, or prepaid health

16  clinic charged has engaged in an unfair or deceptive act or

17  practice or the unlawful operation of a prepaid health clinic,

18  the office department also shall issue an order requiring the

19  violator to cease and desist from engaging in such method of

20  competition, act, or practice or unlawful operation of a

21  prepaid health clinic. Furthermore, the office department may,

22  at its discretion, order any one or more of the following:

23         (1)  The suspension or revocation of the certificate of

24  authority of the prepaid health clinic if it knew, or

25  reasonably should have known, that it was in violation of this

26  part.

27         (2)  If it is determined that the person or entity

28  charged has engaged in the business of operating a prepaid

29  health clinic without a certificate of authority, an

30  administrative penalty not to exceed $1,000 for each prepaid

31  health clinic contract offered or effectuated.

                                 1997

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 1         Section 1625.  Section 641.447, Florida Statutes, is

 2  amended to read:

 3         641.447  Appeal from departmental order.--Any person,

 4  entity, or prepaid health clinic that is subject to an order

 5  of the office department under s. 641.446 may obtain a review

 6  of the order by filing an appeal from the order in accordance

 7  with the provisions and procedures for appeal under s. 120.68.

 8         Section 1626.  Section 641.448, Florida Statutes, is

 9  amended to read:

10         641.448  Penalty for violation of cease and desist

11  order.--Any person, entity, or prepaid health clinic that

12  violates a cease and desist order of the office department

13  under s. 641.446 while such order is in effect, after notice

14  and hearing as provided in s. 641.445, is subject, at the

15  discretion of the office department, to any one or more of the

16  following:

17         (1)  A monetary penalty of not more than $50,000 as to

18  all matters determined in such hearing.

19         (2)  The suspension or revocation of the certificate of

20  authority of the prepaid health clinic.

21         Section 1627.  Section 641.45, Florida Statutes, is

22  amended to read:

23         641.45  Revocation or cancellation of certificate of

24  authority; suspension of authority to enroll new subscribers;

25  terms of suspension.--

26         (1)  The maintenance of a valid and current Health Care

27  Provider Certificate issued pursuant to part III of this

28  chapter is a condition of the maintenance of a valid and

29  current certificate of authority issued by the office

30  department to operate a prepaid health clinic. Revocation or

31  nonrenewal of a Health Care Provider Certificate shall be

                                 1998

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 1  deemed to be an automatic and immediate cancellation of a

 2  prepaid health clinic's certificate of authority.

 3         (2)  The office department may suspend the authority of

 4  a clinic to enroll new subscribers or revoke any certificate

 5  of authority issued to a prepaid health clinic, or order

 6  compliance within 60 days, if the office department finds that

 7  any of the following conditions exist:

 8         (a)  The clinic is not operating in compliance with

 9  this part or any rule promulgated under this part.

10         (b)  The plan is no longer actuarially sound or the

11  clinic does not have the minimum surplus as required by this

12  part.

13         (c)  The existing contract rates are excessive,

14  inadequate, or unfairly discriminatory.

15         (d)  The clinic has advertised, merchandised, or

16  attempted to merchandise its services in such a manner as to

17  misrepresent its services or capacity for services or has

18  engaged in deceptive, misleading, or unfair practices with

19  respect to advertising or merchandising.

20         (e)  The organization is insolvent.

21         (f)  The clinic has not complied with the grievance

22  procedures for subscribers that are set forth in any prepaid

23  health clinic contract.

24         (g)  The clinic has not fully satisfied a judgment

25  against the clinic within 10 days of the entry of the judgment

26  by any court in the state or, in the case of an appeal from

27  such judgment, has not fully satisfied the judgment within 60

28  days after affirmance of the judgment by the appellate court.

29         (3)  The office department shall, in its order

30  suspending the authority of a clinic to enroll new

31  subscribers, specify the period during which the suspension is

                                 1999

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 1  to be in effect and the conditions, if any, which must be met

 2  by the clinic prior to reinstatement of its authority to

 3  enroll new subscribers. The order of suspension is subject to

 4  rescission or modification by further order of the office

 5  department prior to the expiration of the suspension period.

 6  Reinstatement shall not be made unless requested by the

 7  clinic; however, the office department shall not grant

 8  reinstatement if it finds that the circumstances for which the

 9  suspension occurred still exist or are likely to recur.

10         Section 1628.  Section 641.452, Florida Statutes, is

11  amended to read:

12         641.452  Administrative penalty in lieu of suspension

13  or revocation of certificate of authority.--The office

14  department may, in lieu of suspension or revocation of a

15  certificate of authority, levy an administrative penalty in an

16  amount not more than $10,000 for each violation by a prepaid

17  health clinic. In levying such fine, the office department

18  shall consider the number of members and total revenues of the

19  clinic and whether the violation was committed knowingly and

20  willfully.

21         Section 1629.  Section 641.453, Florida Statutes, is

22  amended to read:

23         641.453  Civil liability.--The provisions of this part

24  are cumulative to the rights under the general civil law and

25  common law, and no action of the office department shall

26  abrogate such rights to damages or other relief in any court.

27         Section 1630.  Section 641.454, Florida Statutes, is

28  amended to read:

29         641.454  Civil action to enforce prepaid health clinic

30  contract; attorney's fees; court costs.--In any civil action

31  brought to enforce the terms and conditions of a prepaid

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 1  health clinic contract, the prevailing party is entitled to

 2  recover reasonable attorney's fees and court costs. This

 3  section shall not be construed to authorize a civil action

 4  against the commission or office department, or their its

 5  employees, or the Insurance Commissioner and Treasurer or

 6  against the Agency for Health Care Administration, the

 7  employees of the Agency for Health Care Administration, or the

 8  Secretary of Health Care Administration.

 9         Section 1631.  Section 641.455, Florida Statutes, is

10  amended to read:

11         641.455  Disposition of moneys collected under this

12  part.--Fees, administrative penalties, examination expenses,

13  and other sums collected by the office department under this

14  part shall be deposited to the credit of the Insurance

15  Commissioner's Regulatory Trust Fund; however, fees,

16  examination expenses, and other sums collected by, or

17  allocated to, the Agency for Health Care Administration under

18  this part shall be deposited to the credit of the General

19  Revenue Fund.

20         Section 1632.  Section 641.457, Florida Statutes, is

21  amended to read:

22         641.457  Exemption for certain operational prepaid

23  health clinics.--The provisions of this part do not apply to

24  those prepaid health clinics providing the services defined in

25  ss. 641.40 through 641.459, which clinics have been

26  continuously engaged in providing such services since January

27  1, 1947, provided that any prepaid health clinic claiming an

28  exemption under this section notified notifies the former

29  Department of Insurance of its claim on or before January 1,

30  1985. This exemption will terminate upon a change in

31  controlling ownership of the organization.

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 1         Section 1633.  Section 641.48, Florida Statutes, is

 2  amended to read:

 3         641.48  Purpose and application of part.--The purpose

 4  of this part is to ensure that health maintenance

 5  organizations and prepaid health clinics deliver high-quality

 6  health care to their subscribers.  To achieve this purpose,

 7  this part requires all such organizations to obtain a health

 8  care provider certificate from the agency as a condition

 9  precedent to obtaining a certificate of authority to do

10  business in Florida from the office Department of Insurance,

11  under part I or part II of this chapter.

12         Section 1634.  Subsection (2) of section 641.49,

13  Florida Statutes, is amended to read:

14         641.49  Certification of health maintenance

15  organization and prepaid health clinic as health care

16  providers; application procedure.--

17         (2)  The office Department of Insurance shall not issue

18  a certificate of authority under part I or part II of this

19  chapter to any applicant which does not possess a valid health

20  care provider certificate issued by the agency under this

21  part.

22         Section 1635.  Subsection (4) of section 641.495,

23  Florida Statutes, is amended to read:

24         641.495  Requirements for issuance and maintenance of

25  certificate.--

26         (4)  The organization shall ensure that the health care

27  services it provides to subscribers, including physician

28  services as required by s. 641.19(12)(d) and (e) s.

29  641.19(13)(d) and (e), are accessible to the subscribers, with

30  reasonable promptness, with respect to geographic location,

31  hours of operation, provision of after-hours service, and

                                 2002

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 1  staffing patterns within generally accepted industry norms for

 2  meeting the projected subscriber needs. The health maintenance

 3  organization must provide treatment authorization 24 hours a

 4  day, 7 days a week. Requests for treatment authorization may

 5  not be held pending unless the requesting provider

 6  contractually agrees to take a pending or tracking number.

 7         Section 1636.  Subsections (7), (8), and (11) of

 8  section 641.511, Florida Statutes, are amended to read:

 9         641.511  Subscriber grievance reporting and resolution

10  requirements.--

11         (7)  Each organization shall send to the agency a copy

12  of its quarterly grievance reports submitted to the office

13  Department of Insurance pursuant to s. 408.7056(12).

14         (8)  The agency shall investigate all reports of

15  unresolved quality of care grievances received from:

16         (a)  Annual and quarterly grievance reports submitted

17  by the organization to the office Department of Insurance.

18         (b)  Review requests of subscribers whose grievances

19  remain unresolved after the subscriber has followed the full

20  grievance procedure of the organization.

21         (11)  Each organization, as part of its contract with

22  any provider, must require the provider to post a consumer

23  assistance notice prominently displayed in the reception area

24  of the provider and clearly noticeable by all patients. The

25  consumer assistance notice must state the addresses and

26  toll-free telephone numbers of the Agency for Health Care

27  Administration, the Statewide Provider and Subscriber

28  Assistance Program, and the Department of Financial Services

29  Insurance. The consumer assistance notice must also clearly

30  state that the address and toll-free telephone number of the

31  organization's grievance department shall be provided upon

                                 2003

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 1  request. The agency may adopt is authorized to promulgate

 2  rules to implement this section.

 3         Section 1637.  Subsections (1), (3), and (6) of section

 4  641.512, Florida Statutes, are amended to read:

 5         641.512  Accreditation and external quality assurance

 6  assessment.--

 7         (1)(a)  To promote the quality of health care services

 8  provided by health maintenance organizations and prepaid

 9  health clinics in this state, the office department shall

10  require each health maintenance organization and prepaid

11  health clinic to be accredited within 1 year of the

12  organization's receipt of its certificate of authority and to

13  maintain accreditation by an accreditation organization

14  approved by the office department, as a condition of doing

15  business in the state.

16         (b)  In the event that no accreditation organization

17  can be approved by the office department, the office

18  department shall require each health maintenance organization

19  and prepaid health clinic to have an external quality

20  assurance assessment performed by a review organization

21  approved by the office department, as a condition of doing

22  business in the state. The assessment shall be conducted

23  within 1 year of the organization's receipt of its certificate

24  of authority and every 2 years thereafter, or when the office

25  department deems additional assessments necessary.

26         (3)  A representative of the office department shall

27  accompany the accreditation or review organization throughout

28  the accreditation or assessment process, but shall not

29  participate in the final accreditation or assessment

30  determination.  The accreditation or review organization shall

31  monitor and evaluate the quality and appropriateness of

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 1  patient care, the organization's pursuance of opportunities to

 2  improve patient care and resolve identified problems, and the

 3  effectiveness of the internal quality assurance program

 4  required for health maintenance organization and prepaid

 5  health clinic certification pursuant to s. 641.49(3)(p).

 6         (6)  The accreditation or review organization shall

 7  issue a written report of its findings to the health

 8  maintenance organization's or prepaid health clinic's board of

 9  directors. A copy of the report shall be submitted to the

10  office department by the organization within 30 business days

11  of its receipt by the health maintenance organization or

12  prepaid health clinic.

13         Section 1638.  Section 641.52, Florida Statutes, is

14  amended to read:

15         641.52  Revocation of certificate; suspension of new

16  enrollment; suspension of the health care provider

17  certificate; administrative fine; notice of action to the

18  office Department of Insurance; penalty for use of unlicensed

19  providers.--

20         (1)  The agency may suspend the authority of an

21  organization to enroll new subscribers or revoke the health

22  care provider certificate of any organization, or order

23  compliance within a time certain, if it finds that any of the

24  following conditions exist:

25         (a)  The organization is in substantial violation of

26  its contracts.

27         (b)  The organization is unable to fulfill its

28  obligations under outstanding contracts entered into with its

29  subscribers.

30         (c)  The organization knowingly utilizes a provider who

31  is furnishing or has furnished health care services and who

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 1  does not have a subsisting license or other authority to

 2  practice or furnish health care services in this state.

 3         (d)  The organization no longer meets the requirements

 4  for the certificate as originally issued.

 5         (e)  The organization has violated any lawful rule or

 6  order of the agency or any provision of this part.

 7         (f)  The organization has refused to be examined or to

 8  produce its accounts, records, and files for examination or to

 9  perform any other legal obligation as to such examination,

10  when required by the agency.

11         (g)  The organization has not, after given reasonable

12  notice, maintained accreditation or received favorable

13  external quality assurance reviews under s. 641.512 or,

14  following an investigation under s. 641.515, has been

15  determined to not materially meet requirements under this

16  part.

17         (2)  Revocation of an organization's certificate shall

18  be for a period of 2 years. After 2 years, the organization

19  may apply for a new certificate by compliance with all

20  application requirements applicable to first-time applicants.

21         (3)  Suspension of an organization's authority to

22  enroll new subscribers shall be for such period, not to exceed

23  1 year, as is fixed by the agency. The agency shall, in its

24  order suspending the authority of an organization to enroll

25  new subscribers, specify the period during which the

26  suspension is to be in effect and the conditions, if any,

27  which must be met by the organization prior to reinstatement

28  of its authority to enroll new subscribers.  The order of

29  suspension is subject to rescission or modification by further

30  order of the agency prior to the expiration of the suspension

31  period.  Authority to enroll new subscribers shall not be

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 1  reinstated unless requested by the organization; however, the

 2  agency may not grant reinstatement if it finds that the

 3  circumstances for which the suspension of authority to enroll

 4  new subscribers occurred still exist or are likely to recur.

 5         (4)  The agency may suspend the health care provider

 6  certificate issued to an organization. The agency shall, in

 7  its order suspending the health care provider certificate,

 8  specify the period during which the suspension is to be in

 9  effect and the conditions, if any, which must be met by the

10  organization for reinstatement. Upon expiration of the

11  suspension period, the organization's certificate

12  automatically reinstates unless the agency finds that the

13  causes of the suspension have not been removed or that the

14  organization is otherwise not in compliance with this part.

15  If the agency makes such a finding, the health care provider

16  certificate shall not be reinstated and is considered to have

17  expired as of the end of the suspension period.

18         (5)  If the agency finds that one or more grounds exist

19  for the revocation or suspension of a certificate issued under

20  this part, the agency may, in lieu of such revocation or

21  suspension, impose a fine upon the organization.  With respect

22  to any nonwillful violation, the fine may not exceed $2,500

23  per violation.  Such fines may not exceed an aggregate amount

24  of $25,000 for all nonwillful violations arising out of the

25  same action.  With respect to any knowing and willful

26  violation of a lawful order or rule of the agency or a

27  provision of this part, the agency may impose a fine upon the

28  organization in an amount not to exceed $20,000 for each such

29  violation.  Such fines may not exceed an aggregate amount of

30  $250,000 for all knowing and willful violations arising out of

31  the same action. The agency shall, by January 1, 1997, adopt

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 1  by rule penalty categories that specify varying ranges of

 2  fines for willful violations and for nonwillful violations.

 3         (6)  The agency shall immediately notify the office

 4  Department of Insurance whenever it issues an administrative

 5  complaint or an order or otherwise initiates legal proceedings

 6  resulting in or which may result in suspension or revocation

 7  of an organization's health care provider certificate or

 8  suspension of new enrollment.

 9         (7)  Any organization that knowingly utilizes the

10  services of a provider who is not licensed or otherwise

11  authorized by law to provide such services is guilty of a

12  felony of the third degree, punishable as provided in s.

13  775.082, s. 775.083, or s. 775.084.

14         Section 1639.  Subsection (2) of section 641.54,

15  Florida Statutes, is amended to read:

16         641.54  Information disclosure.--

17         (2)  The list shall be made available, upon request, to

18  the office department.  The list shall also be made available,

19  upon request:

20         (a)  With respect to negotiation, application, or

21  effectuation of a group health maintenance contract, to the

22  employer or other person who will hold the contract on behalf

23  of the subscriber group.  The list may be restricted to

24  include only physicians and hospitals in the group's

25  geographic area.

26         (b)  With respect to an individual health maintenance

27  contract or any contract offered to a person who is entitled

28  to have payments for health care costs made under Medicare, to

29  the person considering or making application to, or under

30  contract with, the health maintenance organization.  The list

31  

                                 2008

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 1  may be restricted to include only physicians and hospitals in

 2  the person's geographic area.

 3         Section 1640.  Subsection (4) of section 641.55,

 4  Florida Statutes, is amended to read:

 5         641.55  Internal risk management program.--

 6         (4)  The Agency for Health Care Administration shall

 7  adopt rules necessary to carry out the provisions of this

 8  section, including rules governing the establishment of

 9  required internal risk management programs to meet the needs

10  of individual organizations and each specific organization

11  type governed by this part.  The office Department of

12  Insurance shall assist the agency in preparing these rules.

13  Each internal risk management program shall include the use of

14  incident reports to be filed with the risk manager.  The risk

15  manager shall have free access to all organization or provider

16  medical records. The incident reports shall be considered to

17  be a part of the workpapers of the attorney defending the

18  organization in litigation relating thereto and shall be

19  subject to discovery, but not be admissible as evidence in

20  court, nor shall any person filing an incident report be

21  subject to civil suit by virtue of the incident report and the

22  matters it contains.  As a part of each internal risk

23  management program, the incident reports shall be utilized to

24  develop categories of incidents which identify problem areas.

25  Once identified, procedures must be adjusted to correct these

26  problem areas.

27  

28  The gross data compiled under this section or s. 395.0197

29  shall be furnished by the agency upon request to organizations

30  to be utilized for risk management purposes.  The agency shall

31  

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 1  adopt rules necessary to carry out the provisions of this

 2  section.

 3         Section 1641.  Subsection (2) of section 641.58,

 4  Florida Statutes, is amended to read:

 5         641.58  Regulatory assessment; levy and amount; use of

 6  funds; tax returns; penalty for failure to pay.--

 7         (2)  The office Department of Insurance shall determine

 8  the amount of gross premiums for the purposes of the

 9  regulatory assessment, and then the agency shall determine on

10  or before December 1 of each year the regulatory assessment

11  percentage necessary to be imposed for that calendar year,

12  payable on or before the following April 1, as herein

13  prescribed, to provide the funds appropriated to the agency to

14  carry out the provisions of subsection (4).

15         Section 1642.  Section 642.015, Florida Statutes, is

16  amended to read:

17         642.015  Definitions.--As used in ss. 642.011-642.049,

18  the term:

19         (1)  "Department" means the Department of Insurance.

20         (1)(2)  "Gross written premiums" means the total amount

21  of premiums paid by the consumer for the entire period of the

22  legal expense insurance contract, including commissions.

23         (3)  "Insurance code" means the Florida Insurance Code

24  as provided in s. 624.01.

25         (2)(4)  "Insurer" means any person authorized to

26  conduct a life or casualty insurance business in this state or

27  a legal expense insurance corporation authorized under ss.

28  642.011-642.049.

29         (3)(5)  "Legal expense insurance" means a contractual

30  obligation to provide specific legal services, or to reimburse

31  for specific legal expenses, in consideration of a specified

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 1  payment for an interval of time, regardless of whether the

 2  payment is made by the beneficiaries individually or by a

 3  third person for them, but does not include the provision of,

 4  or reimbursement for, legal services incidental to other

 5  insurance coverages.

 6         Section 1643.  Section 642.017, Florida Statutes, is

 7  amended to read:

 8         642.017  Exemptions.--The provisions of the Florida

 9  Insurance Code and ss. 642.011-642.049 do not apply to:

10         (1)  Retainer contracts made by attorneys at law with

11  individual clients with fees based on estimates of the nature

12  and amount of services to be provided to the specific client

13  and similar contracts made with a group of clients involved in

14  the same or closely related legal matters.

15         (2)  Any lawyer referral service authorized by The

16  Florida Bar.

17         (3)  The furnishing of legal assistance by labor unions

18  or other employee organizations to their members in matters

19  relating to employment or occupation.

20         (4)  The furnishing of legal assistance to members, or

21  their dependents, by a church, cooperative, educational

22  institution, credit union, or organization of employees, in

23  which the organization contracts directly with a lawyer or law

24  firm for the provision of legal services and the

25  administration and marketing of such legal services are

26  conducted wholly by the organization.

27         (5)  Employee welfare benefit plans to the extent that

28  state laws are superseded by the Employee Retirement Income

29  Security Act of 1974, 29 U.S.C. s. 1144, provided evidence of

30  exemption from state laws is shown to the office department.

31  

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 1         Section 1644.  Section 642.021, Florida Statutes, is

 2  amended to read:

 3         642.021  Certificate of authority.--

 4         (1)  It is unlawful for any person to engage in a legal

 5  expense insurance business in this state without a valid

 6  certificate of authority issued by the office department,

 7  pursuant to ss. 642.011-642.049, except that a domestic,

 8  foreign, or alien insurer authorized to transact life or

 9  casualty insurance in this state may transact legal expense

10  insurance provided it complies with the applicable provisions

11  of ss. 642.011-642.049.  A certificate of authority under ss.

12  642.011-642.049 may be issued only to a legal expense

13  insurance corporation.

14         (2)  The corporation shall file with the office

15  department an application for a certificate of authority upon

16  a form adopted by the commission and to be furnished by the

17  office department, which shall include or have attached the

18  following:

19         (a)  The names, addresses, and occupations of all

20  directors and officers and of each shareholder who owns or

21  controls 10 percent or more of the shares of the applicant

22  corporation.

23         (b)  A certified copy of the corporate articles and

24  bylaws and, for the 3 most recent years, the annual statements

25  and reports of the corporation.

26         (c)  Each agreement relating to the corporation to

27  which any director or officer, or any shareholder who owns or

28  controls 10 percent or more of the shares of the corporation,

29  is a party.

30         (d)  A statement of the amount and sources of the funds

31  available for organization expenses and the proposed

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 1  arrangements for reimbursement and compensation of

 2  incorporators or other persons.

 3         (e)  A statement of compensation to be provided

 4  directors and officers.

 5         (f)  The forms to be used for any proposed contracts

 6  between the corporation and participating attorneys or between

 7  the corporation and corporations which perform administration,

 8  marketing, or management services and the forms relating to

 9  the provision of services to insureds.

10         (g)  The plan for conducting the insurance business,

11  which plan shall include all of the following:

12         1.  The geographical area in which business is intended

13  to be conducted in the first 5 years.

14         2.  The types of insurance intended to be written in

15  the first 5 years, including specification whether and to what

16  extent indemnity rather than service benefits are to be

17  provided.

18         3.  The proposed marketing methods.

19         (h)  A current statement of the assets and liabilities

20  of the corporate applicant.

21         (i)  Forms of all legal service contracts the applicant

22  proposes to offer showing the rates to be charged for each

23  form of contract.

24         (j)  Such other documents and information as the

25  commission or office department may reasonably require.

26         (3)  Copies of the documents filed pursuant to

27  paragraphs (f) and (i) of subsection (2) shall be filed with

28  The Florida Bar within 5 days after filing with the office

29  department.

30  

31  

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 1         (4)  The office department shall issue a certificate of

 2  authority only to a legal expense insurance corporation,

 3  provided it is satisfied that:

 4         (a)  All requirements of law have been met;

 5         (b)  All natural persons who are directors and

 6  officers, and each shareholder who owns or controls 10 percent

 7  or more of the shares of the applicant corporation, are

 8  trustworthy and collectively have the competence and

 9  experience to engage in the particular insurance business

10  proposed; and

11         (c)  The business plan is consistent with the interests

12  of potential insureds and of the public.

13         Section 1645.  Section 642.022, Florida Statutes, is

14  amended to read:

15         642.022  Insurance business not authorized.--Nothing in

16  the Florida Insurance Code or this chapter shall be deemed to

17  authorize any legal expense corporation to transact any

18  insurance business other than that of legal expense insurance

19  or to otherwise engage in any other type of insurance unless

20  it is authorized under a certificate of authority issued by

21  the office department under the provisions of the Florida

22  Insurance Code.

23         Section 1646.  Subsections (2), (5), (6), and (7) of

24  section 642.023, Florida Statutes, are amended to read:

25         642.023  Required deposit or bond.--

26         (2)  In lieu of any deposit of securities required

27  under subsection (1) and subject to the approval of the office

28  department, a legal service insurance corporation may file

29  with the office department a surety bond issued by an

30  authorized surety insurer. The bond shall be for the same

31  purpose as the deposit in lieu of which it is filed. The

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 1  office department may not approve any bond under the terms of

 2  which the protection afforded against insolvency is not

 3  equivalent to the protection afforded by those securities

 4  provided for in subsection (1).

 5         (5)  Such deposit or bond shall be maintained

 6  unimpaired as long as the legal expense insurance corporation

 7  continues to do business in this state. Whenever the

 8  corporation ceases to do business in this state and furnishes

 9  proof satisfactory to the office department that it has

10  discharged or otherwise adequately provided for all its

11  obligations to its insureds in this state, the office and

12  department shall release the deposited securities to the

13  parties entitled thereto, on presentation of the receipts of

14  the department for such securities, or shall release the bond

15  filed with it in lieu of such deposit.

16         (6)  The office department, upon written request of the

17  legal expense insurance corporation, may reduce the amount of

18  deposit or bond required under subsection (1) if it finds that

19  the policyholders and certificateholders of the corporation

20  are adequately protected by:

21         (a)  The terms and number of existing contracts with

22  subscribers;

23         (b)  Financial guarantees of financially sound public

24  or private organizations or agencies;

25         (c)  Other reliable financial guarantees; or

26         (d)  Plan attorney agreements that provide for full

27  plan benefits to subscribers without additional payments by

28  the subscribers if the plan terminates.

29         (7)  The office department may at any time enter an

30  order modifying the amount of the deposit or bond specified

31  under subsection (1) or subsection (2) if it finds that there

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 1  has been a substantial change in the facts on which the

 2  determination was based.

 3         Section 1647.  Subsections (2), (3), and (4) of section

 4  642.025, Florida Statutes, are amended to read:

 5         642.025  Policy and certificate forms.--

 6         (2)  No policy or certificate of legal expense

 7  insurance may be issued in this state unless a copy of the

 8  form has been filed with and approved by the office department

 9  pursuant to s. 627.410.

10         (3)  The office department shall not approve any policy

11  or certificate form which does not meet the following

12  requirements:

13         (a)  Policies shall contain a list and description of

14  the legal services to be supplied or the legal matters for

15  which expenses are to be reimbursed and any limits on the

16  amounts to be reimbursed.

17         (b)  Policies and certificates shall indicate the name

18  of the insurer and the full address of its principal place of

19  business.

20         (c)  Certificates issued under group policies shall

21  contain a full statement of the benefits provided and

22  exceptions thereto but may summarize the other terms of the

23  master policy.

24         (d)  Policies providing for legal services to be

25  supplied by a limited number of attorneys who have executed

26  provider contracts with the insurer, whether the attorney in

27  an individual case is to be selected by the insured or by the

28  insurer, shall provide for alternative benefits if the insured

29  is unable to find a participating attorney willing to perform

30  the services or the attorney selected by the insurer is

31  disqualified or otherwise unable to perform the services.  The

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 1  alternative benefit may consist of furnishing the services of

 2  an attorney selected and paid by the insurer or paying the fee

 3  of an attorney selected by the insured.  The policy shall also

 4  provide a procedure that includes impartial review for

 5  settling disagreements concerning the grounds for demanding an

 6  alternative benefit.

 7         (e)  No policy, except one issued by a mutual or

 8  reciprocal insurance company, may provide for assessments on

 9  policyholders or for reduction of benefits for the purpose of

10  maintaining the insurer's solvency.

11         (f)  Policies shall contain a statement that the

12  subscriber has a right to file a complaint with The Florida

13  Bar concerning attorney conduct pursuant to the plan.

14         (g)  Policies shall contain a statement that the

15  individual beneficiary has the right to retain, at his or her

16  own expense, except when the policy provides otherwise, any

17  attorney authorized to practice law in this state.

18         (4)  The office department may disapprove a policy or

19  certificate form if it finds that the form:

20         (a)  Is unfair, unfairly discriminatory, misleading, or

21  ambiguous or encourages misrepresentation or misunderstanding

22  of the contract;

23         (b)  Provides coverage or benefits or contains other

24  provisions that would endanger the solvency of the insurer; or

25         (c)  Is contrary to law.

26         Section 1648.  Section 642.027, Florida Statutes, is

27  amended to read:

28         642.027  Premium rates.--No policy of legal expense

29  insurance may be issued in this state unless the premium rates

30  for the insurance have been filed with and approved by the

31  office department. Premium rates shall be established and

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 1  justified in accordance with generally accepted insurance

 2  principles, including, but not limited to, the experience or

 3  judgment of the insurer making the rate filing or actuarial

 4  computations. The office department may disapprove rates that

 5  are excessive, inadequate, or unfairly discriminatory. Rates

 6  are not unfairly discriminatory because they are averaged

 7  broadly among persons insured under group, blanket, or

 8  franchise policies. The office department may require the

 9  submission of any other information reasonably necessary in

10  determining whether to approve or disapprove a filing made

11  under this section or s. 642.025.

12         Section 1649.  Section 642.029, Florida Statutes, is

13  amended to read:

14         642.029  Contracts by insurers.--

15         (1)  Contracts made between the insurer and

16  participating attorneys, management contracts, or contracts

17  with providers of other services covered by the legal expense

18  insurance policy shall be filed with and approved by the

19  office department.

20         (2)  An insurer shall annually report to the office

21  department the number and geographical distribution of

22  attorneys and providers of other services covered by the legal

23  expense insurance policy with whom it maintains contractual

24  relations and the nature of the relations. The office

25  department may require more frequent reports from an insurer

26  or group of insurers.

27         Section 1650.  Section 642.0301, Florida Statutes, is

28  amended to read:

29         642.0301  Filing, license, statement, and miscellaneous

30  fees.--

31  

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 1         (1)  Every legal expense insurance corporation must pay

 2  to the office department the following fees:

 3         (a)  Certificate of authority of legal expense

 4  insurance corporation.  Filing application for original

 5  certificate of authority, including all accompanying

 6  documents, filing fee.....................................$250

 7         (b)  Annual license fee for legal expense insurance

 8  corporations..............................................$300

 9         (c)  Statements of legal expense insurance corporation:

10         1.  Annual statement...............................$100

11         2.  Quarterly statement.............................$25

12         (2)  For any service not described in subsection (1),

13  the fee is that prescribed in s. 624.501.

14         Section 1651.  Section 642.0331, Florida Statutes, is

15  amended to read:

16         642.0331  Grounds for suspension or revocation of

17  certificate.--

18         (1)  The certificate of authority of an insurer,

19  whether issued pursuant to this chapter or the insurance code,

20  may be revoked or suspended, or the office department may

21  refuse to renew a certificate of authority, if the office

22  department determines that the insurer:

23         (a)  Has violated any lawful rule or order of the

24  commission or office department or any provision of this

25  chapter.

26         (b)  Is in an unsound financial condition which would

27  render its further transaction of business in this state

28  hazardous or injurious to its policyholders, its

29  certificateholders, or the public.

30         (c)  Is using such methods or practices in the conduct

31  of its business so as to render its further transaction of

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 1  business in this state hazardous or injurious to its

 2  policyholders, its certificateholders, or the public.

 3         (d)  Has refused to be examined or to produce its

 4  accounts, records, or files for examination, or if any of its

 5  officers have refused to give information with respect to its

 6  affairs or have refused to perform any other legal obligation

 7  as to such examination, when required by the office

 8  department.

 9         (e)  Has failed to pay any final judgment rendered

10  against it in this state within 60 days after the judgment

11  became final.

12         (f)  Without just cause has refused to pay proper

13  claims or perform services arising under its policies or

14  contracts; without just cause has compelled policyholders or

15  certificateholders to accept less than the amount due them; or

16  has employed attorneys, or has brought suit against the

17  association, to secure full payment or settlement of such

18  claims.

19         (g)  Is affiliated with, and under the same general

20  management or interlocking directorate or ownership as,

21  another insurer which transacts business in this state without

22  having a certificate of authority.

23         (2)  The office department may, pursuant to s. 120.60,

24  in its discretion and without advance notice or hearing

25  thereon, immediately suspend the certificate of any insurer,

26  whether such certificate was issued pursuant to this chapter

27  or the insurance code, if it finds that one or more of the

28  following circumstances exist:

29         (a)  The insurer is insolvent or impaired.

30         (b)  The deposit required by s. 642.023 is not being

31  maintained.

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 1         (c)  Proceedings for receivership, conservatorship, or

 2  rehabilitation or other delinquency proceedings regarding the

 3  insurer have been commenced in any state.

 4         (d)  The financial condition or business practices of

 5  the insurer otherwise pose an imminent threat to the public

 6  health, safety, or welfare of the residents of this state.

 7         Section 1652.  Section 642.0334, Florida Statutes, is

 8  amended to read:

 9         642.0334  Order; notice of suspension or revocation of

10  certificate; effect; publication.--

11         (1)  Suspension or revocation of a certificate of

12  authority of an insurer shall be by order of the office

13  department mailed to the corporation by registered or

14  certified mail. The office department also shall promptly give

15  notice of such suspension or revocation to the sales

16  representatives in this state of the corporation who are of

17  record in the office of the office department. The insurer

18  shall not solicit or write any new contracts in this state

19  during the period of any such suspension or revocation.

20         (2)  In its discretion, the office department may cause

21  notice of the revocation or suspension to be published in one

22  or more newspapers of general circulation published in this

23  state.

24         Section 1653.  Subsections (1), (3), and (4) of section

25  642.0338, Florida Statutes, are amended to read:

26         642.0338  Administrative fine in lieu of suspension or

27  revocation.--

28         (1)  If the office department finds that one or more

29  grounds exist for the revocation or suspension of a

30  certificate of authority issued under this chapter, the office

31  

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 1  department may, in lieu of such suspension or revocation,

 2  impose a fine upon the insurer.

 3         (3)  With respect to any knowing and willful violation

 4  of an order or rule of the office or commission department or

 5  a provision of this chapter, the office department may impose

 6  a fine upon the insurer in an amount not to exceed $5,000 for

 7  each such violation.  In no event shall such fine exceed an

 8  aggregate amount of $25,000 for all knowing and willful

 9  violations arising out of the same action.  In addition to

10  such fines, such insurer shall make restitution when due in

11  accordance with the provisions of subsection (2).

12         (4)  The failure of an insurer to make restitution when

13  due as required under this section constitutes a willful

14  violation of this chapter.  However, if an insurer in good

15  faith is uncertain as to whether any restitution is due or as

16  to the amount of such restitution, it shall promptly notify

17  the office department of the circumstances, and the failure to

18  make restitution pending a determination thereof will not

19  constitute a violation of this chapter.

20         Section 1654.  Subsection (10) of section 642.041,

21  Florida Statutes, is amended to read:

22         642.041  Grounds for compulsory refusal, suspension, or

23  revocation of license or appointment of contracting sales

24  representatives.--The department shall, pursuant to the

25  insurance code, deny, suspend, revoke, or refuse to renew or

26  continue the license or appointment of any sales

27  representative or the license or appointment of any general

28  lines agent if it finds that, as to the sales representative

29  or general lines agent, any one or more of the following

30  applicable grounds exist:

31  

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 1         (10)  Willful failure to comply with, or willful

 2  violation of, any proper order or rule of the office,

 3  commission, or department or willful violation of any

 4  provision of ss. 642.011-642.049.

 5         Section 1655.  Subsection (3) of section 642.043,

 6  Florida Statutes, is amended to read:

 7         642.043  Grounds for discretionary refusal, suspension,

 8  or revocation of license or appointment of sales

 9  representatives.--The department may, in its discretion, deny,

10  suspend, revoke, or refuse to renew or continue the license or

11  appointment of any sales representative if it finds that, as

12  to the representative, any one or more of the following

13  applicable grounds exist under circumstances for which such

14  denial, suspension, revocation, or refusal is not mandatory

15  under s. 642.041:

16         (3)  Violation of any lawful order or rule of the

17  office, commission, or department.

18         Section 1656.  Subsection (2) of section 642.047,

19  Florida Statutes, is amended to read:

20         642.047  Administrative fine in lieu of suspension or

21  revocation of license or appointment.--

22         (2)  The order may allow the licensee or appointee a

23  reasonable period not to exceed 30 days, within which to pay

24  to the department or office the amount of the penalty so

25  imposed.  If the licensee or appointee fails to pay the

26  penalty in its entirety to the department or office at its

27  office in Tallahassee within the period so allowed, the

28  license or appointment of the licensee or appointee shall

29  stand suspended or revoked, or renewal or continuation may be

30  refused, as the case may be, upon expiration of such period

31  and without any further proceedings.

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 1         Section 1657.  Subsections (3) and (4) of section

 2  642.0475, Florida Statutes, are amended to read:

 3         642.0475  Civil remedy.--

 4         (3)  As a condition precedent to bringing an action

 5  under this section, the office department and the person

 6  against whom the action is to be brought shall be given notice

 7  of the violation. The notice shall state with specificity the

 8  facts which allegedly constitute the violation and the law

 9  which the plaintiff is relying upon.  No action shall lie if,

10  within 30 days thereafter, the damages are paid or the

11  circumstances giving rise to the violation are corrected.

12         (4)  This section shall not be construed to authorize a

13  class action suit against a legal expense insurance

14  corporation or a civil action against the department,

15  commission, or office or their its employees, or the Insurance

16  Commissioner.

17         Section 1658.  Section 648.25, Florida Statutes, is

18  amended to read:

19         648.25  Definitions.--As used in this chapter, the

20  term:

21         (1)  "Bail bond agency" means:

22         (a)  The building where a licensee maintains an office

23  and where all records required by ss. 648.34 and 648.36 are

24  maintained; or

25         (b)  An entity that:

26         1.  Charges a fee or premium to release an accused

27  defendant or detainee from jail; or

28         2.  Engages in or employs others to engage in any

29  activity that may be performed only by a licensed and

30  appointed bail bond agent.

31  

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 1         (2)  "Bail bond agent" means a limited surety agent or

 2  a professional bail bond agent as hereafter defined.

 3         (3)  "Department" means the Department of Insurance.

 4         (3)(4)  "Managing general agent" means any individual,

 5  partnership, association, or corporation appointed or employed

 6  by an insurer to supervise or manage the bail bond business

 7  written in this state by limited surety agents appointed by

 8  the insurer.

 9         (4)(5)  "Insurer" means any domestic, foreign, or alien

10  surety company which has been authorized to transact surety

11  business in this state.

12         (5)(6)  "Limited surety agent" means any individual

13  appointed by an insurer by power of attorney to execute or

14  countersign bail bonds in connection with judicial proceedings

15  who receives or is promised money or other things of value

16  therefor.

17         (6)(7)  "Primary bail bond agent" means a licensed bail

18  bond agent who is responsible for the overall operation and

19  management of a bail bond agency location and whose

20  responsibilities include hiring and supervising all

21  individuals within that location. A bail bond agent may be

22  designated as primary bail bond agent for only one bail bond

23  agency location.

24         (7)(8)  "Professional bail bond agent" means any person

25  who pledges United States currency, United States postal money

26  orders, or cashier's checks as security for a bail bond in

27  connection with a judicial proceeding and receives or is

28  promised therefor money or other things of value.

29         (8)(9)  "Temporary bail bond agent" means a person

30  employed by a bail bond agent or agency, insurer, or managing

31  general agent, and such licensee has the same authority as a

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 1  licensed bail bond agent, including presenting defendants in

 2  court; apprehending, arresting, and surrendering defendants to

 3  the proper authorities, while accompanied by a supervising

 4  bail bond agent or an agent from the same agency; and keeping

 5  defendants under necessary surveillance. However, a temporary

 6  licensee may not execute or sign bonds, handle collateral

 7  receipts, or deliver bonds to appropriate authorities. A

 8  temporary licensee may not operate an agency or branch agency

 9  separate from the location of the supervising bail bond agent,

10  managing general agent, or insurer by whom the licensee is

11  employed. This does not affect the right of a bail bond agent

12  or insurer to hire counsel or to obtain the assistance of law

13  enforcement officers.

14         Section 1659.  Section 648.26, Florida Statutes, is

15  amended to read:

16         648.26  Department of Financial Services Insurance;

17  administration.--

18         (1)  The department shall administer the provisions of

19  this chapter as provided in this chapter.

20         (a)  The department has authority to adopt rules

21  pursuant to ss. 120.536(1) and 120.54 to implement the

22  provisions of this chapter conferring powers or duties upon

23  it.

24         (b)  The department may employ and discharge such

25  employees, examiners, counsel, and other assistants as shall

26  be deemed necessary, and it shall prescribe their duties;

27  their compensation shall be the same as other state employees

28  receive for similar services.

29         (2)  The department shall adopt a seal by which its

30  proceedings are authenticated.  Any written instrument

31  purporting to be a copy of any action, proceeding, or finding

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 1  of fact by the department, or any record of the department

 2  authenticated by the seal, shall be accepted by all the courts

 3  of this state as prima facie evidence of the contents thereof.

 4         (3)  The papers, documents, reports, or any other

 5  investigatory records of the department are confidential and

 6  exempt from the provisions of s. 119.07(1) until such

 7  investigation is completed or ceases to be active. For the

 8  purpose of this section, an investigation is considered

 9  "active" while the investigation is being conducted by the

10  department with a reasonable, good faith belief that it may

11  lead to the filing of administrative, civil, or criminal

12  proceedings.  An investigation does not cease to be active if

13  the department is proceeding with reasonable dispatch and

14  there is good faith belief that action may be initiated by the

15  department or other administrative or law enforcement agency.

16         Section 1660.  Subsection (2) of section 648.33,

17  Florida Statutes, is amended to read:

18         648.33  Bail bond rates.--

19         (2)  It is unlawful for a bail bond agent to execute a

20  bail bond without charging a premium therefor, and the premium

21  rate may not exceed or be less than the premium rate as filed

22  with and approved by the office department.

23         Section 1661.  Subsection (3) of section 648.34,

24  Florida Statutes, is amended to read:

25         648.34  Bail bond agents; qualifications.--

26         (3)  The department may collect a fee necessary to

27  cover the cost of a character and credit report made by an

28  established and reputable independent reporting service.  The

29  fee shall be deposited to the credit of the Insurance

30  Commissioner's Regulatory Trust Fund.  Any information so

31  

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 1  furnished is confidential and exempt from the provisions of s.

 2  119.07(1).

 3         Section 1662.  Section 648.35, Florida Statutes, is

 4  amended to read:

 5         648.35  Professional bail bond agent;

 6  qualifications.--In addition to the qualifications prescribed

 7  in s. 648.34, to qualify as a professional bail bond agent an

 8  applicant shall:

 9         (1)  File with his or her application for licensure and

10  with each application for renewal or continuation of his or

11  her appointment a detailed financial statement under oath; and

12         (2)  File with his or her application for licensure the

13  rating plan proposed for use in writing bail bonds. Such

14  rating plan must be approved by the office department prior to

15  issuance of the license.

16         Section 1663.  Subsection (5) of section 648.355,

17  Florida Statutes, is amended to read:

18         648.355  Temporary limited license as limited surety

19  agent or professional bail bond agent; pending examination.--

20         (5)  The department may collect a fee necessary to

21  cover the cost of a character and credit report made by an

22  established and reputable independent reporting service. The

23  fee shall be deposited to the credit of the Insurance

24  Commissioner's Regulatory Trust Fund.

25         Section 1664.  Section 648.365, Florida Statutes, is

26  amended to read:

27         648.365  Statistical reporting requirements; penalty

28  for failure to comply.--

29         (1)  Each insurer and each bail bond agent who writes

30  bail bonds in this state, shall maintain and transmit the

31  following information, based on their Florida bail bond

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 1  business, to the department or office when requested and shall

 2  report the information separately for each company represented

 3  but only insurers shall report the information specified in

 4  paragraphs (a), (l), and (m):

 5         (a)  Commissions paid.

 6         (b)  The number of, and the total dollar amount of,

 7  bonds executed.

 8         (c)  The number of, and the total dollar amount of,

 9  bonds declared forfeited.

10         (d)  The number of, and the total dollar amount of,

11  forfeitures discharged, remitted, or otherwise recovered prior

12  to payment for any reason.

13         (e)  The number of, and the total dollar amount of,

14  forfeitures discharged, remitted, or otherwise recovered prior

15  to payment due to the apprehension of the defendant by the

16  bail bond agent.

17         (f)  The number of, and the total dollar amount of,

18  judgments entered.

19         (g)  The number of, and the total dollar amount of,

20  forfeitures paid and subsequently recovered from the court by

21  discharge or remission or otherwise.

22         (h)  A list of every outstanding or unpaid forfeiture,

23  estreature, and judgment, with the case number and the name of

24  the court in which such forfeiture, estreature, or judgment is

25  recorded and the name of each agency or firm that employs the

26  bail bond agent.

27         (i)  The number of, and the total dollar amount of,

28  bonds for which collateral was accepted.

29         (j)  The actual realized value of collateral converted,

30  excluding the cost of converting the collateral.

31         (k)  The cost of converting collateral.

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 1         (l)  The underwriting gain or loss.

 2         (m)  The net investment gain or loss allocated to the

 3  flow of funds associated with Florida business.

 4         (n)  Such additional information as the department or

 5  office may require in order to:

 6         1.  Evaluate the reasonableness of rates or assure that

 7  such rates are not excessive or unfairly discriminatory.

 8         2.  Evaluate the financial condition or trade practices

 9  of bail bond agents and sureties executing bail bonds.

10         3.  Evaluate the performance of the commercial bail

11  bond industry in accordance with appropriate criminal justice

12  system goals and standards.

13  

14  Each bail bond agent shall submit a copy of such information

15  to each insurer he or she represents.

16         (2)  Any person who intentionally fails to provide the

17  information in this section when requested by the department

18  or office, intentionally provides incorrect or misleading

19  information, or intentionally omits any required information

20  commits a misdemeanor of the first degree, punishable as

21  provided in s. 775.082 or s. 775.083.

22         Section 1665.  Subsections (1) and (2) of section

23  648.386, Florida Statutes, are amended to read:

24         648.386  Qualifications for prelicensing and continuing

25  education schools and instructors.--

26         (1)  SCHOOLS AND CURRICULUM FOR PRELICENSING

27  SCHOOLS.--In order to be considered for approval and

28  certification as an approved limited surety agent and

29  professional bail bond agent prelicensing school, such entity

30  must:

31  

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 1         (a)1.  Offer a minimum of two 120-hour

 2  classroom-instruction basic certification courses in the

 3  criminal justice system per calendar year unless a reduced

 4  number of course offerings per calendar year is warranted in

 5  accordance with rules promulgated by the department; or

 6         2.  Offer a department-approved correspondence course

 7  pursuant to department rules.

 8         (b)  Submit a prelicensing course curriculum to the

 9  department of Insurance for approval.

10         (c)  If applicable, offer prelicensing classes which

11  are taught by instructors approved by the department.

12         (2)  SCHOOLS AND CURRICULUM FOR CONTINUING EDUCATION

13  SCHOOLS.--In order to be considered for approval and

14  certification as an approved limited surety agent and

15  professional bail bond agent continuing education school, such

16  entity must:

17         (a)  Provide a minimum of three continuing education

18  classes per calendar year.

19         (b)  Submit a course curriculum to the department of

20  Insurance for approval.

21         (c)  Offer continuing education classes which are

22  comprised of a minimum of 2 hours of approved coursework and

23  are taught by an approved supervising instructor or guest

24  lecturer approved by the entity or the supervising instructor.

25         Section 1666.  Paragraph (j) of subsection (1) of

26  section 648.44, Florida Statutes, is amended to read:

27         648.44  Prohibitions; penalty.--

28         (1)  A bail bond agent or temporary bail bond agent may

29  not:

30         (j)  Accept anything of value from a principal for

31  providing a bail bond except the premium and transfer fee

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 1  authorized by the office department, except that the bail bond

 2  agent may accept collateral security or other indemnity from

 3  the principal or another person in accordance with the

 4  provisions of s. 648.442, together with documentary stamp

 5  taxes, if applicable. No fees, expenses, or charges of any

 6  kind shall be permitted to be deducted from the collateral

 7  held or any return premium due, except as authorized by this

 8  chapter or rule of the department or commission. A bail bond

 9  agent may, upon written agreement with another party, receive

10  a fee or compensation for returning to custody an individual

11  who has fled the jurisdiction of the court or caused the

12  forfeiture of a bond.

13         Section 1667.  Subsection (10) of section 648.442,

14  Florida Statutes, is amended to read:

15         648.442  Collateral security.--

16         (10)  An indemnity agreement may not be entered into

17  between a principal and either a surety or any agent of the

18  surety, and an application may not be accepted either by a

19  bail bond agent engaged in the bail bond business or by a

20  surety company for a bail bond in which an indemnity agreement

21  is required between a principal and either a surety or any

22  agent of such surety, unless the indemnity agreement reads as

23  follows: "For good and valuable consideration, the undersigned

24  principal agrees to indemnify and hold harmless the surety

25  company or its agent for all losses not otherwise prohibited

26  by law or by rules of the Department of Financial Services

27  Insurance."

28         Section 1668.  Paragraph (a) of subsection (3) of

29  section 648.571, Florida Statutes, is amended to read:

30         648.571  Failure to return collateral; penalty.--

31  

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 1         (3)(a)  Fees or charges other than those provided in

 2  this chapter or by rule of the department or commission may

 3  not be deducted from the collateral due.

 4         Section 1669.  Subsection (4) of section 650.06,

 5  Florida Statutes, is amended to read:

 6         650.06  Social Security Contribution Trust Fund.--

 7         (4)  The Chief Financial Officer Treasurer of the state

 8  shall be ex officio treasurer and custodian of the Social

 9  Security Contribution Trust Fund and shall administer such

10  fund in accordance with the provisions of this chapter and the

11  directions of the state agency. The Chief Financial Officer

12  Treasurer shall pay all warrants drawn by the Comptroller upon

13  the fund in accordance with the provisions of this section and

14  with such regulations as the state agency may prescribe

15  pursuant thereto.

16         Section 1670.  Section 651.011, Florida Statutes, is

17  amended to read:

18         651.011  Definitions.--For the purposes of this

19  chapter, the term:

20         (1)  "Advisory council" means the Continuing Care

21  Advisory Council established by s. 651.121.

22         (2)  "Continuing care" or "care" means furnishing

23  pursuant to a contract shelter and either nursing care or

24  personal services as defined in s. 400.402, whether such

25  nursing care or personal services are provided in the facility

26  or in another setting designated by the contract for

27  continuing care, to an individual not related by consanguinity

28  or affinity to the provider furnishing such care, upon payment

29  of an entrance fee.  Other personal services provided shall be

30  designated in the continuing care contract.  Contracts to

31  provide continuing care include agreements to provide care for

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 1  any duration, including contracts that are terminable by

 2  either party.

 3         (3)  "Department" means the Department of Insurance of

 4  this state.

 5         (3)(4)  "Entrance fee" means an initial or deferred

 6  payment of a sum of money or property made as full or partial

 7  payment to assure the resident a place in a facility.  An

 8  accommodation fee, admission fee, or other fee of similar form

 9  and application shall be considered to be an entrance fee.

10         (4)(5)  "Facility" means a place in which it is

11  undertaken to provide continuing care.

12         (5)(6)  "Licensed" means that the provider has obtained

13  a certificate of authority from the department.

14         (6)(7)  "Provider" means the owner or operator, whether

15  a natural person, partnership or other unincorporated

16  association, however organized, trust, or corporation, of an

17  institution, building, residence, or other place, whether

18  operated for profit or not, which owner or operator undertakes

19  to provide continuing care for a fixed or variable fee, or for

20  any other remuneration of any type, whether fixed or variable,

21  for the period of care, payable in a lump sum or lump sum and

22  monthly maintenance charges or in installments, but does not

23  mean any entity that has existed and continuously operated a

24  facility located on no less than 63 acres in this state

25  providing residential lodging to members and their spouses for

26  at least 66 years on or before July 1, 1989, and such facility

27  has the residential capacity of 500 persons, is directly or

28  indirectly owned or operated by a nationally recognized

29  fraternal organization, is not open to the public, and accepts

30  only its members and their spouses as residents at such a

31  facility.

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 1         (7)(8)  "Records" means the permanent financial,

 2  directory, and personnel information and data maintained by a

 3  provider pursuant to this chapter.

 4         (8)(9)  "Resident" means a purchaser of or a nominee

 5  of, or a subscriber to, a continuing care agreement.  Such an

 6  agreement may not be construed to give the resident a part

 7  ownership of the facility in which the resident is to reside,

 8  unless expressly provided for in the agreement.

 9         (9)(10)  "Generally accepted accounting principles"

10  means those accounting principles and practices adopted by the

11  Financial Accounting Standards Board and the American

12  Institute of Certified Public Accountants, including Statement

13  of Position 90-8 with respect to any full year to which the

14  statement applies.

15         (10)(11)  "Insolvency" means the condition in which the

16  provider is unable to pay its obligations as they come due in

17  the normal course of business.

18         (11)(12)  "Advertising" means the dissemination of any

19  written, visual, or electronic information by a provider, or

20  any person affiliated with or controlled by a provider, to

21  potential residents or their representatives for the purpose

22  of inducing such persons to subscribe to or enter into a

23  contract to reside in a continuing care community covered by

24  this act.

25         Section 1671.  Section 651.012, Florida Statutes, is

26  amended to read:

27         651.012  Exempted facility; written disclosure of

28  exemption.--Any facility exempted under ss. 632.637(1)(e) and

29  651.011(6) 651.011(7) must provide written disclosure of such

30  exemption to each person admitted to the facility after

31  October 1, 1996.  This disclosure must be written using

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 1  language likely to be understood by the person and must

 2  briefly explain the provisions of ss. 632.637(1)(e) and

 3  651.011(6) 651.011(7).

 4         Section 1672.  Subsection (2) of section 651.013,

 5  Florida Statutes, is amended to read:

 6         651.013  Chapter exclusive; applicability of other

 7  laws.--

 8         (2)  In addition to other applicable provisions cited

 9  in this chapter, the office department has the authority

10  granted under ss. 624.302-624.305, 624.308-624.312,

11  624.319(1)-(3), 624.320-624.321, 624.324, and 624.34 of the

12  Florida Insurance Code to regulate providers of continuing

13  care.

14         Section 1673.  Section 651.014, Florida Statutes, is

15  amended to read:

16         651.014  Insurance business not authorized.--Nothing in

17  the Florida Insurance Code or this chapter shall be deemed to

18  authorize any provider of a continuing care facility to

19  transact any insurance business other than that of continuing

20  care insurance or otherwise to engage in any other type of

21  insurance unless it is authorized under a certificate of

22  authority issued by the office department under the provisions

23  of the Florida Insurance Code.

24         Section 1674.  Section 651.015, Florida Statutes, is

25  amended to read:

26         651.015  Administration; forms; fees; rules;

27  fines.--The administration of this chapter is vested in the

28  commission, office, and department, which shall:

29         (1)  Prepare and furnish all forms necessary under the

30  provisions of this chapter in relation to applications for

31  provisional certificates of authority, certificates of

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 1  authority or renewals thereof, statements, examinations, and

 2  other required reports. The office department is authorized to

 3  accept any application statement, report, or information

 4  submitted electronically or by facsimile to comply with

 5  requirements in this chapter or rules adopted under this

 6  section. The commission department may adopt rules to

 7  implement the provisions of this subsection.

 8         (2)  Collect in advance, and the applicant shall pay in

 9  advance, the following fees:

10         (a)  At the time of filing an application for a

11  certificate of authority, an application fee in the amount of

12  $75 for each facility.

13         (b)  At the time of filing the annual report required

14  by s. 651.026, a fee in the amount of $100 for each year or

15  part thereof for each facility.

16         (c)  A late fee not to exceed $50 a day for each day of

17  noncompliance.

18         (d)  A fee to cover the actual cost of a credit report

19  and fingerprint processing.

20         (e)  At the time of filing an application for a

21  provisional certificate of authority, a fee in the amount of

22  $50.

23         (3)  Adopt rules pursuant to ss. 120.536(1) and 120.54

24  to implement the provisions of this chapter.

25         (4)  Impose administrative fines and penalties pursuant

26  to this chapter.

27         (5)  Deposit all fees and fines collected under the

28  provisions of this chapter into the Insurance Commissioner's

29  Regulatory Trust Fund.

30         Section 1675.  Section 651.018, Florida Statutes, is

31  amended to read:

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 1         651.018  Administrative supervision.--The office

 2  department may place a facility in administrative supervision

 3  pursuant to part VI of chapter 624.

 4         Section 1676.  Section 651.019, Florida Statutes, is

 5  amended to read:

 6         651.019  New financing, additional financing, or

 7  refinancing.--

 8         (1)  After issuance of a certificate of authority, the

 9  provider shall submit to the office department a general

10  outline, including intended use of proceeds, with respect to

11  any new financing, additional financing, or refinancing at

12  least 30 days before the closing date of such financing

13  transaction.

14         (2)  The provider shall furnish any information the

15  office department may reasonably request in connection with

16  any new financing, additional financing, or refinancing,

17  including, but not limited to, the financing agreements and

18  any related documents, escrow or trust agreements, and

19  statistical or financial data. The provider shall also submit

20  to the office department copies of executed financing

21  documents within 30 days after the closing date.

22         Section 1677.  Section 651.021, Florida Statutes, is

23  amended to read:

24         651.021  Certificate of authority required.--

25         (1)  No person may engage in the business of providing

26  continuing care or issuing continuing care agreements or

27  construct a facility for the purpose of providing continuing

28  care in this state without a certificate of authority therefor

29  obtained from the office department as provided in this

30  chapter. This subsection shall not be construed to prohibit

31  preparation of the construction site or construction of a

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 1  model residence unit for marketing purposes, or both. The

 2  office department may allow the purchase of an existing

 3  building for the purpose of providing continuing care if the

 4  office department determines that the purchase is not being

 5  made for the purpose of circumventing the prohibitions

 6  contained in this section.

 7         (2)(a)  Before commencement of construction or

 8  marketing for any expansion of a certificated facility

 9  equivalent to the addition of at least 20 percent of existing

10  units, written approval must be obtained from the office

11  department. This provision does not apply to construction for

12  which a certificate of need from the Agency for Health Care

13  Administration is required.

14         (b)  The application for such approval shall be on

15  forms adopted by the commission and provided by the office

16  department. The application shall include the feasibility

17  study required by s. 651.022(3) or s. 651.023(1)(b) and such

18  other information as required by s. 651.023.

19         (c)  In determining whether an expansion should be

20  approved, the office department shall utilize the criteria

21  provided in ss. 651.022(6) and 651.023(2).

22         Section 1678.  Subsection (2), paragraph (i) of

23  subsection (3), and subsections (5), (6), (7), and (8) of

24  section 651.022, Florida Statutes, are amended to read:

25         651.022  Provisional certificate of authority;

26  application.--

27         (2)  The application for a provisional certificate of

28  authority shall be on a form prescribed by the commission

29  department and shall contain the following information:

30         (a)  If the applicant or provider is a corporation, a

31  copy of the articles of incorporation and bylaws; if the

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 1  applicant or provider is a partnership or other unincorporated

 2  association, a copy of the partnership agreement, articles of

 3  association, or other membership agreement; and, if the

 4  applicant or provider is a trust, a copy of the trust

 5  agreement or instrument.

 6         (b)  The full names, residences, and business addresses

 7  of:

 8         1.  The proprietor, if the applicant or provider is an

 9  individual.

10         2.  Every partner or member, if the applicant or

11  provider is a partnership or other unincorporated association,

12  however organized, having fewer than 50 partners or members,

13  together with the business name and address of the partnership

14  or other organization.

15         3.  The principal partners or members, if the applicant

16  or provider is a partnership or other unincorporated

17  association, however organized, having 50 or more partners or

18  members, together with the business name and business address

19  of the partnership or other organization.  If such

20  unincorporated organization has officers and a board of

21  directors, the full name and business address of each officer

22  and director may be set forth in lieu of the full name and

23  business address of its principal members.

24         4.  The corporation and each officer and director

25  thereof, if the applicant or provider is a corporation.

26         5.  Every trustee and officer, if the applicant or

27  provider is a trust.

28         6.  The manager, whether an individual, corporation,

29  partnership, or association.

30  

31  

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 1         7.  Any stockholder holding at least a 10-percent

 2  interest in the operations of the facility in which the care

 3  is to be offered.

 4         8.  Any person whose name is required to be provided in

 5  the application under the provisions of this paragraph and who

 6  owns any interest in or receives any remuneration from, either

 7  directly or indirectly, any professional service firm,

 8  association, trust, partnership, or corporation providing

 9  goods, leases, or services to the facility for which the

10  application is made, with a real or anticipated value of $500

11  or more, and the name and address of the professional service

12  firm, association, trust, partnership, or corporation in which

13  such interest is held.  The applicant shall describe such

14  goods, leases, or services and the probable cost to the

15  facility or provider and shall describe why such goods,

16  leases, or services should not be purchased from an

17  independent entity.

18         9.  Any person, corporation, partnership, association,

19  or trust owning land or property leased to the facility, along

20  with a copy of the lease agreement.

21         10.  Any affiliated parent or subsidiary corporation or

22  partnership.

23         (c)1.  Evidence that the applicant is reputable and of

24  responsible character.  If the applicant is a firm,

25  association, organization, partnership, business trust,

26  corporation, or company, the form shall require evidence that

27  the members or shareholders are reputable and of responsible

28  character, and the person in charge of providing care under a

29  certificate of authority shall likewise be required to produce

30  evidence of being reputable and of responsible character.

31  

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 1         2.  Evidence satisfactory to the office department of

 2  the ability of the applicant to comply with the provisions of

 3  this chapter and with rules adopted by the commission

 4  department pursuant to this chapter.

 5         3.  A statement of whether a person identified in the

 6  application for a provisional certificate of authority or the

 7  administrator or manager of the facility, if such person has

 8  been designated, or any such person living in the same

 9  location:

10         a.  Has been convicted of a felony or has pleaded nolo

11  contendere to a felony charge, or has been held liable or has

12  been enjoined in a civil action by final judgment, if the

13  felony or civil action involved fraud, embezzlement,

14  fraudulent conversion, or misappropriation of property.

15         b.  Is subject to a currently effective injunctive or

16  restrictive order or federal or state administrative order

17  relating to business activity or health care as a result of an

18  action brought by a public agency or department, including,

19  without limitation, an action affecting a license under

20  chapter 400.

21  

22  The statement shall set forth the court or agency, the date of

23  conviction or judgment, and the penalty imposed or damages

24  assessed, or the date, nature, and issuer of the order. Before

25  determining whether a provisional certificate of authority is

26  to be issued, the office department may make an inquiry to

27  determine the accuracy of the information submitted pursuant

28  to subparagraphs 1. and 2.

29         (d)  The agreements for continuing care to be entered

30  into between the provider and residents which meet the minimum

31  requirements of s. 651.055 and which include a statement

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 1  describing the procedures required by law relating to the

 2  release of escrowed entrance fees.  Such statement may be

 3  furnished through an addendum.

 4         (e)  Any advertisement or other written material

 5  proposed to be used in the solicitation of residents.

 6         (f)  Such other reasonable data, financial statements,

 7  and pertinent information as the commission or office

 8  department may reasonably require with respect to the provider

 9  or the facility, including the most recent audited financial

10  statements of comparable facilities currently or previously

11  owned, managed, or developed by the applicant or its

12  principal, to assist in determining the financial viability of

13  the project and the management capabilities of its managers

14  and owners.

15         (3)  In addition to the information required in

16  subsection (2), an applicant for a provisional certificate of

17  authority shall submit a market feasibility study.  The market

18  feasibility study shall include at least the following

19  information:

20         (i)  The application for a provisional certificate of

21  authority shall be accompanied by the forms of the continuing

22  care residency and reservation contracts and escrow agreements

23  proposed to be used by the provider in the furnishing of care.

24  If the office department finds that the continuing care

25  contracts and escrow agreements comply with ss. 651.023(1)(c),

26  651.033, and 651.055, it shall approve them. Thereafter, no

27  other form of contract or agreement may be used by the

28  provider until it has been submitted to the office department

29  and approved.

30         (5)(a)  Within 30 days after receipt of an application

31  for a provisional certificate of authority, the office

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 1  department shall examine the application and shall notify the

 2  applicant in writing, specifically setting forth and

 3  specifically requesting any additional information the office

 4  department is permitted by law to require. If the application

 5  submitted is determined by the office department to be

 6  substantially incomplete so as to require substantial

 7  additional information, including biographical information,

 8  the office department may return the application to the

 9  applicant with a written notice that the application as

10  received is substantially incomplete and, therefore,

11  unacceptable for filing without further action required by the

12  office department. Any filing fee received shall be refunded

13  to the applicant.

14         (b)  Within 15 days after receipt of all of the

15  requested additional information, the office department shall

16  notify the applicant in writing that all of the requested

17  information has been received and the application is deemed to

18  be complete as of the date of the notice. Failure to so notify

19  the applicant in writing within the 15-day period shall

20  constitute acknowledgment by the office department that it has

21  received all requested additional information, and the

22  application shall be deemed to be complete for purposes of

23  review upon the date of the filing of all of the requested

24  additional information.

25         (6)  Within 45 days from the date an application is

26  deemed to be complete, as set forth in paragraph (5)(b), the

27  office department shall complete its review and shall issue a

28  provisional certificate of authority to the applicant based

29  upon its review and a determination that the application meets

30  all requirements of law and that the feasibility study was

31  based on sufficient data and reasonable assumptions and that

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 1  the applicant will be able to provide continuing care as

 2  proposed and meet all financial obligations related to its

 3  operations, including the financial requirements of this

 4  chapter to provide continuing care as proposed.  If the

 5  application is denied, the office department shall notify the

 6  applicant in writing, citing the specific failures to meet the

 7  provisions of this chapter.  Such denial shall entitle the

 8  applicant to a hearing pursuant to the provisions of chapter

 9  120.

10         (7)  The issuance of a provisional certificate of

11  authority entitles the applicant to collect entrance fees and

12  reservation deposits from prospective residents.  All or any

13  part of an entrance fee or deposit collected shall be placed

14  in an escrow account or on deposit with the department,

15  pursuant to s. 651.033, until a certificate of authority is

16  issued by the office department.

17         (8)  The office department shall not approve any

18  application which includes in the plan of financing any

19  encumbrance of the operating reserves required by this

20  chapter.

21         Section 1679.  Section 651.023, Florida Statutes, is

22  amended to read:

23         651.023  Certificate of authority; application.--

24         (1)  After issuance of a provisional certificate of

25  authority, the office department shall issue to the holder of

26  such provisional certificate of authority a certificate of

27  authority; provided, however, that no certificate of authority

28  shall be issued until the holder of such provisional

29  certificate of authority provides the office department with

30  the following information:

31  

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 1         (a)  Any material change in status with respect to the

 2  information required to be filed under s. 651.022(2) in the

 3  application for a provisional certificate of authority.

 4         (b)  A feasibility study prepared by an independent

 5  consultant which contains all of the information required by

 6  s. 651.022(3) and contains financial forecasts or projections

 7  prepared in accordance with standards promulgated by the

 8  American Institute of Certified Public Accountants or

 9  financial forecasts or projections prepared in accordance with

10  standards for feasibility studies or continuing care

11  retirement communities promulgated by the Actuarial Standards

12  Board.  The study must also contain an independent evaluation

13  and examination opinion, or a comparable opinion acceptable to

14  the office department, by the consultant who prepared the

15  study, of the underlying assumptions used as a basis for the

16  forecasts or projections in the study and that the assumptions

17  are reasonable and proper and that the project as proposed is

18  feasible.  The study shall take into account project costs,

19  actual marketing results to date and marketing projections,

20  resident fees and charges, competition, resident contract

21  provisions, and any other factors which affect the feasibility

22  of operating the facility.

23         (c)  Subject to the requirements of subsection (2), a

24  provider may submit an application for a certificate of

25  authority and any required exhibits upon submission of proof

26  that the project has a minimum of 30 percent of the units

27  reserved for which the provider is charging an entrance fee;

28  however, this provision shall not apply to an application for

29  a certificate of authority for the acquisition of a facility

30  for which a certificate of authority was issued prior to

31  October 1, 1983, to a provider who subsequently becomes a

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 1  debtor in a case under the United States Bankruptcy Code, 11

 2  U.S.C. ss. 101 et seq., or to a provider for which the

 3  department has been appointed receiver pursuant to the

 4  provisions of part II of chapter 631.

 5         (d)  Proof that commitments have been secured for both

 6  construction financing and long-term financing or a documented

 7  plan acceptable to the office department has been adopted by

 8  the applicant for long-term financing.

 9         (e)  Proof that all conditions of the lender have been

10  satisfied to activate the commitment to disburse funds other

11  than the obtaining of the certificate of authority, the

12  completion of construction, or the closing of the purchase of

13  realty or buildings for the facility.

14         (f)  Proof that the aggregate amount of entrance fees

15  received by or pledged to the applicant, plus anticipated

16  proceeds from any long-term financing commitment, plus funds

17  from all other sources in the actual possession of the

18  applicant, equal not less than 100 percent of the aggregate

19  cost of constructing or purchasing, equipping, and furnishing

20  the facility plus 100 percent of the anticipated startup

21  losses of the facility.

22         (g)  Complete audited financial statements of the

23  applicant, prepared by an independent certified public

24  accountant in accordance with generally accepted accounting

25  principles, as of the date the applicant commenced business

26  operations or for the fiscal year that ended immediately

27  preceding the date of application, whichever is later, and

28  complete unaudited quarterly financial statements attested to

29  by the applicant subsequent to the date of the last audit.

30  

31  

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 1         (h)  Proof that the applicant has complied with the

 2  escrow requirements of subsection (3) or subsection (5) and

 3  will be able to comply with s. 651.035.

 4         (i)  Such other reasonable data, financial statements,

 5  and pertinent information as the commission or office

 6  department may require with respect to the applicant or the

 7  facility, to determine the financial status of the facility

 8  and the management capabilities of its managers and owners.

 9         (j)  Within 30 days of the receipt of the information

10  required under paragraphs (a)-(h), the office department shall

11  examine such information and shall notify the provider in

12  writing, specifically requesting any additional information

13  the office department is permitted by law to require. Within

14  15 days after receipt of all of the requested additional

15  information, the office department shall notify the provider

16  in writing that all of the requested information has been

17  received and the application is deemed to be complete as of

18  the date of the notice. Failure to so notify the applicant in

19  writing within the 15-day period shall constitute

20  acknowledgment by the office department that it has received

21  all requested additional information, and the application

22  shall be deemed to be complete for purposes of review upon the

23  date of the filing of all of the required additional

24  information.

25         (k)  Within 45 days after an application is deemed

26  complete as set forth in paragraph (j), and upon completion of

27  the remaining requirements of this section, the office

28  department shall complete its review and shall issue, or deny,

29  to the holder of a provisional certificate of authority a

30  certificate of authority. If a certificate of authority is

31  denied, the office department shall notify the holder of the

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 1  provisional certificate of authority in writing, citing the

 2  specific failures to satisfy the provisions of this chapter.

 3  If denied, the holder of the provisional certificate of

 4  authority shall be entitled to an administrative hearing

 5  pursuant to chapter 120.

 6         (2)(a)  The office department shall issue a certificate

 7  of authority upon its determination that the applicant meets

 8  all requirements of law and has submitted all of the

 9  information required by this section, that all escrow

10  requirements have been satisfied, and that the fees prescribed

11  in s. 651.015(2) have been paid.  Notwithstanding satisfaction

12  of the 30-percent minimum reservation requirement of paragraph

13  (1)(c), no certificate of authority shall be issued until the

14  project has a minimum of 50 percent of the units reserved for

15  which the provider is charging an entrance fee, and proof

16  thereof is provided to the office department.

17         (b)  In order for a unit to be considered reserved

18  under this section, the provider must collect a minimum

19  deposit of 10 percent of the then-current entrance fee for

20  that unit, and must assess a forfeiture penalty of 2 percent

21  of the entrance fee due to termination of the reservation

22  contract after 30 days for any reason other than the death or

23  serious illness of the resident, the failure of the provider

24  to meet its obligations under the reservation contract, or

25  other circumstances beyond the control of the resident that

26  equitably entitle the resident to a refund of the resident's

27  deposit. The reservation contract shall state the cancellation

28  policy and the terms of the continuing care contract to be

29  entered into.

30         (3)  No more than 25 percent of the moneys paid for all

31  or any part of an initial entrance fee may be included or

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 1  pledged for the construction or purchase of the facility, or

 2  included or pledged as security for long-term financing.  The

 3  term "initial entrance fee" means the total entrance fee

 4  charged by the facility to the first occupant of a unit.  A

 5  minimum of 75 percent of the moneys paid for all or any part

 6  of an initial entrance fee collected shall be placed in an

 7  escrow account or on deposit with the department as prescribed

 8  in s. 651.033.

 9         (4)  The provider shall be entitled to secure release

10  of the moneys held in escrow within 7 days after receipt by

11  the office department of an affidavit from the provider, along

12  with appropriate copies to verify, and notification to the

13  escrow agent by certified mail, that the following conditions

14  have been satisfied:

15         (a)  A certificate of occupancy has been issued.

16         (b)  Payment in full has been received for no less than

17  70 percent of the total units of a phase or of the total of

18  the combined phases constructed.

19         (c)  The consultant who prepared the feasibility study

20  required by this section or a substitute approved by the

21  office department certifies that there has been no material

22  adverse change in status with regard to the feasibility study,

23  with such statement dated not more than 12 months from the

24  date of filing for office department approval. If a material

25  adverse change should exist at the time of submission, then

26  sufficient information acceptable to the office department and

27  the feasibility consultant shall be submitted which remedies

28  the adverse condition.

29         (d)  Proof that commitments have been secured or a

30  documented plan adopted by the applicant has been approved by

31  the office department for long-term financing.

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 1         (e)  Proof that the provider has sufficient funds to

 2  meet the requirements of s. 651.035, which may include funds

 3  deposited in the initial entrance fee account.

 4         (f)  Proof as to the intended application of the

 5  proceeds upon release and proof that the entrance fees when

 6  released will be applied as represented to the office

 7  department.

 8  

 9  Notwithstanding any provision of chapter 120, no person, other

10  than the provider, the escrow agent, and the office

11  department, shall have a substantial interest in any office

12  departmental decision regarding release of escrow funds in any

13  proceedings under chapter 120 or this chapter regarding

14  release of escrow funds.

15         (5)  In lieu of the provider fulfilling the

16  requirements in subsection (3) and paragraphs (4)(b) and (d),

17  the office department may authorize the release of escrowed

18  funds to retire all outstanding debts on the facility and

19  equipment upon application of the provider and upon the

20  provider's showing that the provider will grant to the

21  residents a first mortgage on the land, buildings, and

22  equipment that constitute the facility, and that the provider

23  satisfies the requirements of paragraphs (4)(a), (c), and (e).

24  Such mortgage shall secure the refund of the entrance fee in

25  the amount required by this chapter. The granting of such

26  mortgage shall be subject to the following:

27         (a)  The first mortgage shall be granted to an

28  independent trust which is beneficially held by the residents.

29  The document creating the trust shall contain a provision that

30  it agrees to an annual audit and will furnish to the office

31  department all information the office department may

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 1  reasonably require.  The mortgage may secure payment on bonds

 2  issued to the residents or trustee.  Such bonds shall be

 3  redeemable after termination of the residency contract in the

 4  amount and manner required by this chapter for the refund of

 5  an entrance fee.

 6         (b)  Before granting a first mortgage to the residents,

 7  all construction shall be substantially completed and

 8  substantially all equipment shall be purchased.  No part of

 9  the entrance fees may be pledged as security for a

10  construction loan or otherwise used for construction expenses

11  before the completion of construction.

12         (c)  If the provider is leasing the land or buildings

13  used by the facility, the leasehold interest shall be for a

14  term of at least 30 years.

15         (6)  The timeframes provided under s. 651.022(5) and

16  (6) apply to applications submitted under s. 651.021(2). The

17  office department may not issue a certificate of authority

18  under this chapter to any facility which does not have a

19  component which is to be licensed pursuant to part II or part

20  III of chapter 400 or which will not offer personal services

21  or nursing services through written contractual agreement. Any

22  written contractual agreement must be disclosed in the

23  continuing care contract and is subject to the provisions of

24  s. 651.1151, relating to administrative, vendor, and

25  management contracts.

26         (7)  The office department shall not approve an

27  application which includes in the plan of financing any

28  encumbrance of the operating reserves required by this

29  chapter.

30         Section 1680.  Section 651.0235, Florida Statutes, is

31  amended to read:

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 1         651.0235  Validity of provisional certificates of

 2  authority and certificates of authority.--

 3         (1)  The provisional certificate of authority and

 4  certificate of authority shall be valid for as long as the

 5  office department determines that the provider continues to

 6  meet the requirements of this chapter.

 7         (2)  If the provider fails to meet the requirements of

 8  this chapter for a provisional certificate of authority or a

 9  certificate of authority, the office department may notify the

10  provider of any deficiencies and require the provider to

11  correct such deficiencies within a period to be determined by

12  the office department. If such deficiencies are not corrected

13  within 20 days after the notice to the provider, or within

14  less time at the discretion of the office department, the

15  office department shall notify the advisory council, which may

16  assist the facility in formulating a remedial plan to be

17  submitted to the office department no later than 60 days from

18  the date of notification. The time period granted to correct

19  deficiencies may be extended upon submission of a plan for

20  corrective action approved by the office department. If such

21  deficiencies have not been cleared by the expiration of such

22  time period, as extended, the office department shall petition

23  for a delinquency proceeding or pursue such other relief as is

24  provided for under this chapter, as the circumstances may

25  require.

26         (3)  The office Department of Insurance shall notify

27  the Agency for Health Care Administration of any facility for

28  which a provisional certificate of authority or certificate of

29  authority is no longer valid.

30         Section 1681.  Section 651.026, Florida Statutes, is

31  amended to read:

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 1         651.026  Annual reports.--

 2         (1)  Annually, on or before May 1, the provider shall

 3  file an annual report and such other information and data

 4  showing its condition as of the last day of the preceding

 5  calendar year, except as provided in subsection (5). If the

 6  office department does not receive the required information on

 7  or before May 1, a late fee may be charged pursuant to s.

 8  651.015(2)(c). The office department may approve an extension

 9  of up to 30 days.

10         (2)  The annual report shall be in such form as the

11  commission department prescribes and shall contain at least

12  the following:

13         (a)  Any change in status with respect to the

14  information required to be filed under s. 651.022(2).

15         (b)  Financial statements audited by an independent

16  certified public accountant, which shall contain, for two or

17  more periods if the facility has been in existence that long,

18  the following:

19         1.  An accountant's opinion and, in accordance with

20  generally accepted accounting principles:

21         a.  A balance sheet;

22         b.  A statement of income and expenses;

23         c.  A statement of equity or fund balances; and

24         d.  A statement of changes in cash flows; and

25         2.  Notes to the financial statements considered

26  customary or necessary to full disclosure or adequate

27  understanding of the financial statements, financial

28  condition, and operation.

29         (c)  The following financial information:

30  

31  

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 1         1.  A detailed listing of the assets maintained in the

 2  liquid reserve as required in s. 651.035 and in accordance

 3  with part II of chapter 625;

 4         2.  A schedule giving additional information relating

 5  to property, plant, and equipment having an original cost of

 6  at least $25,000, so as to show in reasonable detail with

 7  respect to each separate facility original costs, accumulated

 8  depreciation, net book value, appraised value or insurable

 9  value and date thereof, insurance coverage, encumbrances, and

10  net equity of appraised or insured value over encumbrances.

11  Any property not used in continuing care shall be shown

12  separately from property used in continuing care;

13         3.  The level of participation in Medicare or Medicaid

14  programs, or both;

15         4.  A statement of all fees required of residents,

16  including, but not limited to, a statement of the entrance fee

17  charged, the monthly service charges, the proposed application

18  of the proceeds of the entrance fee by the provider, and the

19  plan by which the amount of the entrance fee is determined if

20  the entrance fee is not the same in all cases; and

21         5.  Any change or increase in fees when the provider

22  changes either the scope of, or the rates for, care or

23  services, regardless of whether the change involves the basic

24  rate or only those services available at additional costs to

25  the resident.

26         6.a.  If the provider has more than one certificated

27  facility, it shall submit a statement of operations for each

28  facility as supplemental information to the audited financial

29  statements required as part of the annual report.

30         b.  If the provider has operations that are not Florida

31  certificated facilities, the provider shall also submit as

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 1  supplemental information to the audited financial statements,

 2  balance sheets, statements of changes in equity, and

 3  statements of cash flows for each Florida certificated

 4  facility.

 5         (d)  Such other reasonable data, financial statements,

 6  and pertinent information as the commission or office

 7  department may require with respect to the provider or the

 8  facility, or its directors, trustees, members, branches,

 9  subsidiaries, or affiliates, to determine the financial status

10  of the facility and the management capabilities of its

11  managers and owners.

12         (e)  Each facility shall file with the office

13  department annually, together with the annual report required

14  by this section, a computation of its minimum liquid reserve

15  calculated in accordance with s. 651.035 on a form prescribed

16  by the commission department.

17         (3)  The commission department shall adopt by rule

18  meaningful measures of assessing the financial viability of a

19  provider.  The rule may include the following factors:

20         (a)  Debt service coverage ratios.

21         (b)  Current ratios.

22         (c)  Adjusted current ratios.

23         (d)  Cash flows.

24         (e)  Occupancy rates.

25         (f)  Other measures, ratios, or trends.

26         (g)  Other factors as may be appropriate.

27         (4)  If the provider is an individual, the annual

28  statement shall be sworn to by him or her; if a limited

29  partnership, by the general partner; if a partnership other

30  than a limited partnership, by all the partners; if any other

31  unincorporated association, by all its members or officers and

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 1  directors; if a trust, by all its trustees and officers; and,

 2  if a corporation, by the president and secretary thereof.

 3         (5)  A provider may declare at the time of application

 4  a fiscal year other than the calendar year, and may use such

 5  fiscal year for its accounting period. A provider may

 6  subsequently adopt a fiscal year upon providing the office

 7  department with a copy of the Internal Revenue Service

 8  approval of such change, if such approval is required. The

 9  annual report filing with the office department must be made

10  within 120 days of the last day of the fiscal year of the

11  provider.

12         (6)  The workpapers, account analyses, descriptions of

13  basic assumptions, and other information necessary for a full

14  understanding of the annual statement of a provider as filed

15  with the office department shall be made available for visual

16  inspection by the office department at the facility or, if the

17  office department requests, at another agreed-upon site.

18  Photocopies may not be made unless consented to by the

19  provider.

20         (7)  A filing fee in the amount of $100 shall accompany

21  each annual report required by this section.

22         (8)  All financial reports and any supplemental

23  financial information submitted to the office department shall

24  be prepared in conformity with generally accepted accounting

25  principles.

26         Section 1682.  Section 651.0261, Florida Statutes, is

27  amended to read:

28         651.0261  Quarterly statements.--If the office

29  department finds, pursuant to rules of the commission

30  department, that such information is needed to properly

31  monitor the financial condition of a provider or facility or

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 1  is otherwise needed to protect the public interest, the office

 2  department may require the provider to file, within 45 days

 3  after the end of each fiscal quarter, a quarterly unaudited

 4  financial statement of the provider or of the facility in the

 5  form prescribed by the commission department by rule.

 6         Section 1683.  Section 651.028, Florida Statutes, is

 7  amended to read:

 8         651.028  Accredited facilities.--If a provider is

 9  accredited by a process found by the office department to be

10  acceptable and substantially equivalent to the provisions of

11  this chapter, the office department may, pursuant to rule of

12  the commission, waive any requirements of this chapter with

13  respect to the provider if the office department finds that

14  such waivers are not inconsistent with the security

15  protections intended by this chapter.

16         Section 1684.  Section 651.033, Florida Statutes, is

17  amended to read:

18         651.033  Escrow accounts.--

19         (1)  When funds are required to be deposited in an

20  escrow account pursuant to s. 651.022, s. 651.023, s. 651.035,

21  or s. 651.055:

22         (a)  The escrow account shall be established in a

23  Florida bank, Florida savings and loan association, or Florida

24  trust company acceptable to the office department or on

25  deposit with the department; and the funds deposited therein

26  shall be kept and maintained in an account separate and apart

27  from the provider's business accounts.

28         (b)  An escrow agreement shall be entered into between

29  the bank, savings and loan association, or trust company and

30  the provider of the facility; the agreement shall state that

31  its purpose is to protect the resident or the prospective

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 1  resident; and, upon presentation of evidence of compliance

 2  with applicable portions of this chapter, or upon order of a

 3  court of competent jurisdiction, the escrow agent shall

 4  release and pay over the funds, or portions thereof, together

 5  with any interest accrued thereon or earned from investment of

 6  the funds, to the provider or resident as directed.

 7         (c)  Any agreement establishing an escrow account

 8  required under the provisions of this chapter shall be subject

 9  to approval by the office department. The agreement shall be

10  in writing and shall contain, in addition to any other

11  provisions required by law, a provision whereby the escrow

12  agent agrees to abide by the duties imposed under this

13  section.

14         (d)  All funds deposited in an escrow account, if

15  invested, shall be invested as set forth in part II of chapter

16  625; however, such investment shall not diminish the funds

17  held in escrow below the amount required by this chapter. All

18  funds deposited in an escrow account shall not be subject to

19  any charges by the escrow agent except escrow agent fees

20  associated with administering the accounts, or subject to any

21  liens, judgments, garnishments, creditor's claims, or other

22  encumbrances against the provider or facility except as

23  provided in s. 651.035(2).

24         (e)  At the request of either the provider or the

25  office department, the escrow agent shall issue a statement

26  indicating the status of the escrow account.

27         (2)  In addition, the escrow agreement shall provide

28  that the escrow agent or another person designated to act in

29  the escrow agent's place and the provider, except as otherwise

30  provided in s. 651.035, shall notify the office department in

31  writing at least 10 days before the withdrawal of any portion

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 1  of any funds required to be escrowed under the provisions of

 2  s. 651.035. However, in the event of an emergency and upon

 3  petition by the provider, the office department may waive the

 4  10-day notification period and allow a withdrawal of up to 10

 5  percent of the required minimum liquid reserve. The office

 6  department shall have 3 working days to deny the petition for

 7  the emergency 10-percent withdrawal. If the office department

 8  fails to deny the petition within 3 working days, the petition

 9  shall be deemed to have been granted by the office department.

10  For the purpose of this section, "working day" means each day

11  that is not a Saturday, Sunday, or legal holiday as defined by

12  Florida law. Also for the purpose of this section, the day the

13  petition is received by the office department shall not be

14  counted as one of the 3 days.

15         (3)  In addition, when entrance fees are required to be

16  deposited in an escrow account pursuant to s. 651.022, s.

17  651.023, or s. 651.055:

18         (a)  The provider shall deliver to the resident a

19  written receipt. The receipt shall show the payor's name and

20  address, the date, the price of the care contract, and the

21  amount of money paid. A copy of each receipt together with the

22  funds shall be deposited with the escrow agent or as provided

23  in paragraph (c). The escrow agent shall release such funds to

24  the provider upon the expiration of 7 days after the date of

25  receipt of the funds by the escrow agent if the provider,

26  operating under a certificate of authority issued by the

27  office department, has met the requirements of s. 651.023(4).

28  However, if the resident rescinds the contract within the

29  7-day period, the escrow agent shall release the escrowed fees

30  to the resident.

31  

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 1         (b)  At the request of an individual resident of a

 2  facility, the escrow agent shall issue a statement indicating

 3  the status of the resident's portion of the escrow account.

 4         (c)  At the request of an individual resident of a

 5  facility, the provider may hold the check for the 7-day period

 6  and shall not deposit it during this time period. If the

 7  resident rescinds the contract within the 7-day period, the

 8  check shall be immediately returned to the resident. Upon the

 9  expiration of the 7 days, the provider shall deposit the

10  check.

11         (4)  Any fees of $1,500 or less which are assessed with

12  respect to prospective residents to have their names placed on

13  a facility's waiting list shall not be subject to the escrow

14  provisions of this section.

15         (5)  When funds are required to be deposited in an

16  escrow account pursuant to s. 651.022, s. 651.023, or s.

17  651.035, the following shall apply:

18         (a)  The escrow agreement shall require that the escrow

19  agent furnish the provider with a quarterly statement

20  indicating the amount of any disbursements from or deposits to

21  the escrow account and the condition of the account during the

22  period covered by the statement.  The agreement shall require

23  that the statement be furnished to the provider by the escrow

24  agent on or before the 10th day of the month following the end

25  of the quarter for which the statement is due. If the escrow

26  agent does not provide the quarterly statement to the provider

27  on or before the 10th day of the month following the month for

28  which the statement is due, the office department may, in its

29  discretion, levy against the escrow agent a fine not to exceed

30  $25 a day for each day of noncompliance with the provisions of

31  this subsection.

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 1         (b)  If the escrow agent does not provide the quarterly

 2  statement to the provider on or before the 10th day of the

 3  month following the quarter for which the statement is due,

 4  the provider shall, on or before the 15th day of the month

 5  following the quarter for which the statement is due, send a

 6  written request for the statement to the escrow agent by

 7  certified mail return receipt requested.

 8         (c)  On or before the 20th day of the month following

 9  the quarter for which the statement is due, the provider shall

10  file with the office department a copy of the escrow agent's

11  statement or, if the provider has not received the escrow

12  agent's statement, a copy of the written request to the escrow

13  agent for the statement.

14         (d)  The office department may, in its discretion, in

15  addition to any other penalty that may be provided for under

16  this chapter, levy a fine against the provider not to exceed

17  $25 a day for each day the provider fails to comply with the

18  provisions of this subsection.

19         (e)  Funds held on deposit with the department are

20  exempt from the reporting requirements of this subsection.

21         Section 1685.  Paragraphs (b) and (c) of subsection

22  (2), paragraph (b) of subsection (4) and subsections (5), (6),

23  (7), and (8) of section 651.035, Florida Statutes, are amended

24  to read:

25         651.035  Minimum liquid reserve requirements.--

26         (2)

27         (b)  A provider which has outstanding indebtedness

28  which requires what is normally referred to as a "debt service

29  reserve" to be held in escrow pursuant to a trust indenture or

30  mortgage lien on the facility and for which the debt service

31  reserve may only be used to pay principal and interest

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 1  payments on the debt which the debtor is obligated to pay, and

 2  which may include taxes and insurance, may include such debt

 3  service reserve in its computation of its minimum liquid

 4  reserve to satisfy this subsection, provided that the provider

 5  furnishes to the office Department of Insurance a copy of the

 6  agreement under which such debt service is held, together with

 7  a statement of the amount being held in escrow for the debt

 8  service reserve, certified by the lender or trustee and the

 9  provider to be correct. The trustee shall provide the office

10  department with any information concerning the debt service

11  reserve account upon request of the provider or the office

12  department.

13         (c)  Each provider shall maintain in escrow an

14  operating reserve in an amount equal to 30 percent of the

15  total operating expenses projected in the feasibility study

16  required by s. 651.023 for the first 12 months of operation.

17  Thereafter, each provider shall maintain in escrow an

18  operating reserve in an amount equal to 15 percent of the

19  total operating expenses in the annual report filed pursuant

20  to s. 651.026. Where a provider has been in operation for more

21  than 12 months, the total annual operating expenses shall be

22  determined by averaging the total annual operating expenses

23  reported to the office department by the number of annual

24  reports filed with the office department within the immediate

25  preceding 3-year period subject to adjustment in the event

26  there is a change in the number of facilities owned. For

27  purposes of this subsection, total annual operating expenses

28  shall include all expenses of the facility except:

29  depreciation and amortization; interest, insurance and taxes

30  included in subsection (1); extraordinary expenses which are

31  adequately explained and documented in accordance with

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 1  generally accepted accounting principles; liability insurance

 2  premiums in excess of those paid in calendar year 1999; and

 3  changes in the obligation to provide future services to

 4  current residents. For providers initially licensed during or

 5  after calendar year 1999, liability insurance shall be

 6  included in the total operating expenses in an amount not to

 7  exceed the premium paid during the first 12 months of facility

 8  operation. Beginning January 1, 1993, the operating reserves

 9  required under this subsection shall be in an unencumbered

10  account held in escrow for the benefit of the residents.  Such

11  funds may not be encumbered or subject to any liens or charges

12  by the escrow agent or judgments, garnishments, or creditors'

13  claims against the provider or facility.  However, if a

14  facility had a lien, mortgage, trust indenture, or similar

15  debt instrument in place prior to January 1, 1993, which

16  encumbered all or any part of the reserves required by this

17  subsection and such funds were used to meet the requirements

18  of this subsection, then such arrangement may be continued,

19  unless a refinancing or acquisition has occurred, and the

20  provider shall be in compliance with this subsection.

21         (4)

22         (b)  In facilities which have voluntarily and

23  permanently discontinued marketing continuing care contracts,

24  the office department may allow a reduced debt service reserve

25  as required in subsection (1) based upon the ratio of

26  residents under continuing care contracts to those residents

27  who do not hold such contracts if the office department finds

28  that such reduction is not inconsistent with the security

29  protections intended by this chapter. In making this

30  determination, the office department may consider such factors

31  as the financial condition of the facility, the provisions of

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 1  the outstanding continuing care contracts, the ratio of

 2  residents under continuing care agreements to those residents

 3  who do not hold a continuing care contract, current occupancy

 4  rates, previous sales and marketing efforts, life expectancy

 5  of the remaining contract holders, and the written policies of

 6  the board of directors of the provider or a similar board.

 7         (5)  When principal and interest payments are paid to a

 8  trust which is beneficially held by the residents as described

 9  in s. 651.023(5), the office department may waive all or any

10  portion of the escrow requirements for mortgage principal and

11  interest contained in subsection (1) if the office department

12  finds that such waiver is not inconsistent with the security

13  protections intended by this chapter.

14         (6)  The office department, upon approval of a plan for

15  fulfilling the requirements of this section and upon

16  demonstration by the facility of an annual increase in liquid

17  reserves, may extend the time for compliance.

18         (7)(a)  A provider may satisfy the minimum liquid

19  reserve requirements of this section by acquiring from a

20  financial institution, as specified in paragraph (b), a clean,

21  unconditional irrevocable letter of credit in an amount equal

22  to the requirements of this section. The letter of credit

23  shall be issued by a financial institution participating in

24  the State of Florida Treasury Certificate of Deposit Program,

25  and the letter of credit shall be subject to the approval of

26  the office department prior to issuance and prior to any

27  renewal or modification thereof. At a minimum, the letter of

28  credit shall provide for:

29         1.  Ninety days' prior written notice to both the

30  provider and the office department of the financial

31  

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 1  institution's determination not to renew or extend the term of

 2  the letter of credit.

 3         2.  Unless otherwise arranged by the provider to the

 4  satisfaction of the office department, deposit by the

 5  financial institution of such letter of credit funds in an

 6  account designated by the office department no later than 30

 7  days prior to the expiration of the letter of credit.

 8         3.  Deposit by the financial institution of such letter

 9  of credit funds in an account designated by the office

10  department no later than 4 business days following written

11  instructions from the office department that, in the sole

12  judgment of the office department, funding of the minimum

13  liquid reserve is required.

14         (b)  The terms of such letter of credit shall be

15  approved by the office department and the long-term debt of

16  the financial institution providing such letter of credit

17  shall be rated in one of their top three long-term debt rating

18  categories by either Moody's Investors Service, Standard &

19  Poor's Corporation, or a recognized securities rating agency

20  acceptable to the office department.

21         (c)  The letter of credit shall name the office

22  department as beneficiary.

23         (d)  Notwithstanding any other provision of this

24  section, a provider utilizing a letter of credit pursuant to

25  this subsection shall, at all times, have and maintain in

26  escrow an operating cash reserve equal to 2 months' operating

27  expenses as determined pursuant to s. 651.026.

28         (e)  In the event the issuing financial institution no

29  longer participates in the State of Florida Treasury

30  Certificate of Deposit Program, such financial institution

31  shall deposit as collateral with the department State of

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 1  Florida Treasury eligible securities, as prescribed by s.

 2  625.52, having a market value equal to or greater than 100

 3  percent of the stated amount of the letter of credit.

 4         (8)(a)  Each fiscal year, a provider may withdraw up to

 5  33 percent of the total renewal and replacement reserve

 6  available. The reserve available is equal to the market value

 7  of the invested reserves at the end of the provider's prior

 8  fiscal year. The withdrawal is to be used for capital items or

 9  major repairs, and before any funds are eligible for

10  withdrawal, the provider must obtain written permission from

11  the office department by submitting the following information:

12         1.  The amount of the withdrawal and the intended use

13  of the proceeds.

14         2.  A board resolution and sworn affidavit signed by

15  two officers or general partners of the provider which

16  indicates approval of the withdrawal and use of the funds.

17         3.  Proof that the provider has met all funding

18  requirements for the operating, debt service, and renewal and

19  replacement reserves computed for the previous fiscal year.

20         4.  Anticipated payment schedule for refunding the

21  renewal and replacement reserve fund.

22         (b)  Within 30 days after the withdrawal of funds from

23  the renewal and replacement reserve fund, the provider must

24  begin refunding the reserve account in equal monthly payments

25  which allow for a complete funding of such withdrawal within

26  36 months. If the payment schedule required under subparagraph

27  (a)4. has changed, the provider must update the office

28  department with the new payment schedule. If the provider

29  fails to make a required monthly payment or the payment is

30  late, the provider must notify the office department within 5

31  days after the due date of the payment. No additional

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 1  withdrawals from the renewal and replacement reserve will be

 2  allowed until all scheduled payments are current.

 3         Section 1686.  Section 651.051, Florida Statutes, is

 4  amended to read:

 5         651.051  Maintenance of assets and records in

 6  state.--No records or assets may be removed from this state by

 7  a provider unless the office department consents to such

 8  removal in writing before such removal. Such consent shall be

 9  based upon the provider's submitting satisfactory evidence

10  that the removal will facilitate and make more economical the

11  operations of the provider and will not diminish the service

12  or protection thereafter to be given the provider's residents

13  in this state. Prior to such removal, the provider shall give

14  notice to the president or chair of the facility's residents'

15  council. If such removal is part of a cash management system

16  which has been approved by the office department, disclosure

17  of the system shall meet the notification requirements.

18         Section 1687.  Subsection (1) of section 651.055,

19  Florida Statutes, is amended to read:

20         651.055  Contracts; right to rescind.--

21         (1)  Each continuing care contract and each addendum to

22  such contract shall be submitted to and approved by the office

23  department prior to its use in this state. Thereafter, no

24  other form of contract shall be used by the provider unless it

25  has been submitted to and approved by the office department.

26  Each contract shall:

27         (a)  Provide for the continuing care of only one

28  resident, or for two persons occupying space designed for

29  double occupancy, under appropriate regulations established by

30  the provider and shall list all properties transferred and

31  their market value at the time of transfer, including

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 1  donations, subscriptions, fees, and any other amounts paid or

 2  payable by, or on behalf of, the resident or residents.

 3         (b)  Specify all services which are to be provided by

 4  the provider to each resident, including, in detail, all items

 5  which each resident will receive, whether the items will be

 6  provided for a designated time period or for life, and whether

 7  the services will be available on the premises or at another

 8  specified location. The provider shall indicate which services

 9  or items are included in the contract for continuing care and

10  which services or items are made available at or by the

11  facility at extra charge.  Such items shall include, but are

12  not limited to, food, shelter, personal services or nursing

13  care, drugs, burial, and incidentals.

14         (c)  Describe the terms and conditions under which a

15  contract for continuing care may be canceled by the provider

16  or by a resident and the conditions, if any, under which all

17  or any portion of the entrance fee will be refunded in the

18  event of cancellation of the contract by the provider or by

19  the resident, including the effect of any change in the health

20  or financial condition of a person between the date of

21  entering a contract for continuing care and the date of

22  initial occupancy of a living unit by that person.

23         (d)  Describe the health and financial conditions

24  required for a person to be accepted as a resident and to

25  continue as a resident, once accepted, including the effect of

26  any change in the health or financial condition of a person

27  between the date of entering into a continuing care contract

28  and the date of taking occupancy in a unit.

29         (e)  Describe the circumstances under which the

30  resident will be permitted to remain in the facility in the

31  

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 1  event of financial difficulties of the resident.  The stated

 2  policy may not be less than the terms stated in s. 651.061.

 3         (f)  State the fees that will be charged if the

 4  resident marries while at the designated facility, the terms

 5  concerning the entry of a spouse to the facility, and the

 6  consequences if the spouse does not meet the requirements for

 7  entry.

 8         (g)  Provide that the contract may be canceled upon the

 9  giving of written notice of cancellation of at least 30 days

10  by the provider, the resident, or the person who provided the

11  transfer of property or funds for the care of such resident;

12  however, if a contract is canceled because there has been a

13  good faith determination that a resident is a danger to

14  himself or herself or others, only such notice as is

15  reasonable under the circumstances shall be required.

16         1.  The contract shall further provide in clear and

17  understandable language, in print no smaller than the largest

18  type used in the body of the contract, the terms governing the

19  refund of any portion of the entrance fee.

20         2.  For a resident whose contract with the facility

21  provides that the resident does not receive a transferable

22  membership or ownership right in the facility, and who has

23  occupied his or her unit, the refund shall be calculated on a

24  pro rata basis with the facility retaining no more than 2

25  percent per month of occupancy by the resident and no more

26  than a 4-percent fee for processing. Such refund shall be paid

27  no later than 120 days after the giving of notice of intention

28  to cancel.

29         3.  If the contract provides for the facility to retain

30  no more than 1 percent per month of occupancy by the resident,

31  it may provide that such refund will be paid from the proceeds

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 1  of the next entrance fees received by the provider for units

 2  for which there are no prior claims by any resident until paid

 3  in full or, if the provider has discontinued marketing

 4  continuing care contracts, within 200 days after the date of

 5  notice.

 6         4.  Unless the provisions of subsection (5) apply, for

 7  any prospective resident, regardless of whether or not such a

 8  resident receives a transferable membership or ownership right

 9  in the facility, who cancels the contract prior to occupancy

10  of the unit, the refund shall be the entire amount paid toward

11  the entrance fee, less a processing fee not to exceed 4

12  percent of the entire entrance fee, but in no event shall such

13  processing fee exceed the amount paid by the prospective

14  resident. Such refund shall be paid no later than 60 days

15  after the giving of notice of intention to cancel.  For a

16  resident who has occupied his or her unit and who has received

17  a transferable membership or ownership right in the facility,

18  the foregoing refund provisions shall not apply but shall be

19  deemed satisfied by the acquisition or receipt of a

20  transferable membership or an ownership right in the facility.

21  The provider shall not charge any fee for the transfer of

22  membership or sale of an ownership right.

23         (h)  State the terms under which a contract is canceled

24  by the death of the resident.  These terms may contain a

25  provision that, upon the death of a resident, the entrance fee

26  of such resident shall be considered earned and shall become

27  the property of the provider.  When the unit is shared, the

28  conditions with respect to the effect of the death or removal

29  of one of the residents shall be included in the contract.

30         (i)  Describe the policies which may lead to changes in

31  monthly recurring and nonrecurring charges or fees for goods

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 1  and services received. The contract shall provide for advance

 2  notice to the resident, of not less than 60 days, before any

 3  change in fees or charges or the scope of care or services may

 4  be effective, except for changes required by state or federal

 5  assistance programs.

 6         (j)  Provide that charges for care paid in one lump sum

 7  shall not be increased or changed during the duration of the

 8  agreed upon care, except for changes required by state or

 9  federal assistance programs.

10         (k)  Specify whether or not the facility is, or is

11  affiliated with, a religious, nonprofit, or proprietary

12  organization or management entity; the extent to which the

13  affiliate organization will be responsible for the financial

14  and contractual obligations of the provider; and the

15  provisions of the federal Internal Revenue Code, if any, under

16  which the provider or affiliate is exempt from the payment of

17  federal income tax.

18         Section 1688.  Subsection (3) of section 651.083,

19  Florida Statutes, is amended to read:

20         651.083  Residents' rights.--

21         (3)  Any violation of the residents' rights set forth

22  in subsection (1) constitutes grounds for disciplinary action

23  by the office department under ss. 651.106 and 651.108.

24         Section 1689.  Subsection (1) of section 651.085,

25  Florida Statutes, is amended to read:

26         651.085  Quarterly meetings between residents and the

27  governing body of the provider; resident representation before

28  the governing body of the provider.--

29         (1)  The governing body of a provider, or the

30  designated representative of the provider, shall hold

31  quarterly meetings with the residents of the continuing care

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 1  facility for the purpose of free discussion of subjects

 2  including, but not limited to, income, expenditures, and

 3  financial trends and problems as they apply to the facility,

 4  as well as a discussion on proposed changes in policies,

 5  programs, and services.  Upon request of the residents'

 6  organization, a member of the governing body of the provider,

 7  such as a board member, a general partner, or a principal

 8  owner shall attend such meetings.  Residents shall be entitled

 9  to at least 7 days' advance notice of each quarterly meeting.

10  An agenda and any materials that will be distributed by the

11  governing body or representative of the provider shall be

12  posted in a conspicuous place at the facility and shall be

13  available upon request to residents of the facility. The

14  office department shall request verification from a facility

15  that quarterly meetings are held and open to all residents

16  when it receives a complaint from the residents' council that

17  a facility is not in compliance with the provisions of this

18  subsection. In addition, a facility shall report to the office

19  department in the annual report required under s. 651.026 the

20  dates on which quarterly meetings were held during the

21  reporting period.

22         Section 1690.  Section 651.091, Florida Statutes, is

23  amended to read:

24         651.091  Availability, distribution, and posting of

25  reports and records; requirement of full disclosure.--

26         (1)  Each continuing care facility shall maintain as

27  public information, available upon request, records of all

28  cost and inspection reports pertaining to that facility that

29  have been filed with or issued by any governmental agency.  A

30  copy of each such report shall be retained in such records for

31  not less than 5 years from the date the report is filed or

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 1  issued. Each facility shall also maintain as public

 2  information, available upon request, all annual statements

 3  that have been filed with the office department.

 4         (2)  Every continuing care facility shall:

 5         (a)  Display the certificate of authority in a

 6  conspicuous place inside the facility.

 7         (b)  Post in a prominent position in the facility so as

 8  to be accessible to all residents and to the general public a

 9  concise summary of the last examination report issued by the

10  office department, with references to the page numbers of the

11  full report noting any deficiencies found by the office

12  department, and the actions taken by the provider to rectify

13  such deficiencies, indicating in such summary where the full

14  report may be inspected in the facility.

15         (c)  Post in a prominent position in the facility so as

16  to be accessible to all residents and to the general public a

17  summary of the latest annual statement, indicating in the

18  summary where the full annual statement may be inspected in

19  the facility.  A listing of any proposed changes in policies,

20  programs, and services shall also be posted.

21         (d)  Distribute a copy of the full annual statement to

22  the president or chair of the residents' council within 30

23  days after the filing of the annual report with the office

24  department, and designate a staff person to provide

25  explanation thereof.

26         (e)  Notify the residents' council of any plans filed

27  with the office department to obtain new financing, additional

28  financing, or refinancing for the facility and of any

29  applications to the office department for any expansion of the

30  facility.

31  

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 1         (3)  Before entering into a contract to furnish

 2  continuing care, the provider undertaking to furnish the care,

 3  or the agent of the provider, shall make full disclosure, and

 4  provide copies of the disclosure documents to the prospective

 5  resident or his or her legal representative, of the following

 6  information:

 7         (a)  The contract to furnish continuing care.

 8         (b)  The summary listed in paragraph (2)(b).

 9         (c)  All ownership interests and lease agreements,

10  including information specified in s. 651.022(2)(b)8.

11         (d)  In keeping with the intent of this subsection

12  relating to disclosure, the provider shall make available for

13  review, master plans approved by the provider's governing

14  board and any plans for expansion or phased development, to

15  the extent that the availability of such plans will not put at

16  risk real estate, financing, acquisition, negotiations, or

17  other implementation of operational plans and thus jeopardize

18  the success of negotiations, operations, and development.

19         (e)  Copies of the rules and regulations of the

20  facility and an explanation of the responsibilities of the

21  resident.

22         (f)  The policy of the facility with respect to

23  admission to and discharge from the various levels of health

24  care offered by the facility.

25         (g)  The amount and location of any reserve funds

26  required by this chapter, and the name of the person or entity

27  having a claim to such funds in the event of a bankruptcy,

28  foreclosure, or rehabilitation proceeding.

29         (h)  A copy of the resident's rights as described in s.

30  651.083.

31  

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 1  A true and complete copy of the full disclosure document to be

 2  used shall be filed with the office department prior to its

 3  use. A resident or prospective resident or his or her legal

 4  representative shall be permitted to inspect the full reports

 5  referred to in paragraph (2)(b); the charter or other

 6  agreement or instrument required to be filed with the office

 7  department pursuant to s. 651.022(2), together with all

 8  amendments thereto; and the bylaws of the corporation or

 9  association, if any. Upon request, copies of the reports and

10  information shall be provided to the individual requesting

11  them if the individual agrees to pay a reasonable charge to

12  cover copying costs.

13         Section 1691.  Subsections (1) and (2) of section

14  651.095, Florida Statutes, are amended to read:

15         651.095  Advertisements; requirements; penalties.--

16         (1)  Upon application for a provisional certificate of

17  authority, the office department shall require the applicant

18  to submit for approval all advertising. Approval of the

19  application constitutes approval of the advertising, unless

20  the office department has otherwise notified the applicant.

21  The office department shall disapprove any document which is a

22  violation of any provision of part IX of chapter 626.

23         (2)  After an application has been approved, a provider

24  is not required to submit new advertising to the office

25  department for approval; however, a provider may not use, and

26  may not have published, and a person may not use or may not

27  have published, any advertisement which is a violation of any

28  provision of part IX of chapter 626 or which has previously

29  been disapproved by the office department.

30         Section 1692.  Section 651.105, Florida Statutes, is

31  amended to read:

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 1         651.105  Examination and inspections.--

 2         (1)  The office department may at any time, and shall

 3  at least once every 3 years, examine the business of any

 4  applicant for a certificate of authority and any provider

 5  engaged in the execution of care contracts or engaged in the

 6  performance of obligations under such contracts, in the same

 7  manner as is provided for examination of insurance companies

 8  pursuant to s. 624.316.  Such examinations shall be made by a

 9  representative or examiner designated by the office

10  department, whose compensation will be fixed by the office

11  department pursuant to s. 624.320. Routine examinations may be

12  made by having the necessary documents submitted to the office

13  department; and, for this purpose, financial documents and

14  records conforming to commonly accepted accounting principles

15  and practices, as required under s. 651.026, will be deemed

16  adequate. The final written report of each such examination

17  shall be filed with in the office of the department and, when

18  so filed, will constitute a public record. Any provider being

19  examined shall, upon request, give reasonable and timely

20  access to all of its records. The representative or examiner

21  designated by the office department may at any time examine

22  the records and affairs and inspect the physical property of

23  any provider, whether in connection with a formal examination

24  or not.

25         (2)  Any duly authorized officer, employee, or agent of

26  the office department may, upon presentation of proper

27  identification, have access to, and inspect, any records, with

28  or without advance notice, to secure compliance with, or to

29  prevent a violation of, any provision of this chapter.

30         (3)  Reports of the results of such financial

31  examinations must be kept on file by the office department.

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 1  Any investigatory records, reports, or documents held by the

 2  office department are confidential and exempt from the

 3  provisions of s. 119.07(1), until the investigation is

 4  completed or ceases to be active. For the purpose of this

 5  section, an investigation is active while it is being

 6  conducted by the office department with a reasonable, good

 7  faith belief that it could lead to the filing of

 8  administrative, civil, or criminal proceedings. An

 9  investigation does not cease to be active if the office

10  department is proceeding with reasonable dispatch and has a

11  good faith belief that action could be initiated by the office

12  department or other administrative or law enforcement agency.

13         (4)  The office department shall notify the provider in

14  writing of all deficiencies in its compliance with the

15  provisions of this chapter and the rules adopted pursuant to

16  this chapter and shall set a reasonable length of time for

17  compliance by the provider. In addition, the office department

18  shall require corrective action or request a corrective action

19  plan from the provider which plan demonstrates a good faith

20  attempt to remedy the deficiencies by a specified date. If the

21  provider fails to comply within the established length of

22  time, the office department may initiate action against the

23  provider in accordance with the provisions of this chapter.

24         Section 1693.  Section 651.106, Florida Statutes, is

25  amended to read:

26         651.106  Grounds for discretionary refusal, suspension,

27  or revocation of certificate of authority.--The office

28  department, in its discretion, may deny, suspend, or revoke

29  the provisional certificate of authority or the certificate of

30  authority of any applicant or provider if it finds that any

31  

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 1  one or more of the following grounds applicable to the

 2  applicant or provider exist:

 3         (1)  Failure by the provider to continue to meet the

 4  requirements for the authority originally granted.

 5         (2)  Failure by the provider to meet one or more of the

 6  qualifications for the authority specified by this chapter.

 7         (3)  Material misstatement, misrepresentation, or fraud

 8  in obtaining the authority, or in attempting to obtain the

 9  same.

10         (4)  Demonstrated lack of fitness or trustworthiness.

11         (5)  Fraudulent or dishonest practices of management in

12  the conduct of business.

13         (6)  Misappropriation, conversion, or withholding of

14  moneys.

15         (7)  Failure to comply with, or violation of, any

16  proper order or rule of the office or commission department or

17  violation of any provision of this chapter.

18         (8)  The insolvent condition of the provider or the

19  provider's being in such condition or using such methods and

20  practices in the conduct of its business as to render its

21  further transactions in this state hazardous or injurious to

22  the public.

23         (9)  Refusal by the provider to be examined or to

24  produce its accounts, records, and files for examination, or

25  refusal by any of its officers to give information with

26  respect to its affairs or to perform any other legal

27  obligation under this chapter when required by the office

28  department.

29         (10)  Failure by the provider to comply with the

30  requirements of s. 651.026 or s. 651.033.

31  

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 1         (11)  Failure by the provider to maintain escrow

 2  accounts or funds as required by this chapter.

 3         (12)  Failure by the provider to meet the requirements

 4  of this chapter for disclosure of information to residents

 5  concerning the facility, its ownership, its management, its

 6  development, or its financial condition or failure to honor

 7  its continuing care contracts.

 8         (13)  Any cause for which issuance of the license could

 9  have been refused had it then existed and been known to the

10  office department.

11         (14)  Having been found guilty of, or having pleaded

12  guilty or nolo contendere to, a felony in this state or any

13  other state, without regard to whether a judgment or

14  conviction has been entered by the court having jurisdiction

15  of such cases.

16         (15)  In the conduct of business under the license,

17  engaging in unfair methods of competition or in unfair or

18  deceptive acts or practices prohibited under part IX of

19  chapter 626.

20         (16)  A pattern of bankrupt enterprises.

21  

22  Revocation of a certificate of authority under this section

23  does not relieve a provider from the provider's obligation to

24  residents under the terms and conditions of any continuing

25  care contract between the provider and residents or the

26  provisions of this chapter. The provider shall continue to

27  file its annual statement and pay license fees to the office

28  department as required under this chapter as if the

29  certificate of authority had continued in full force, but the

30  provider shall not issue any new continuing care contracts.

31  The office department may seek an action in the circuit court

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 1  of Leon County to enforce the office's department's order and

 2  the provisions of this section.

 3         Section 1694.  Subsections (1) and (3) of section

 4  651.107, Florida Statutes, are amended to read:

 5         651.107  Duration of suspension; obligations during

 6  suspension period; reinstatement.--

 7         (1)  Suspension of a certificate of authority shall be

 8  for such period, not to exceed 1 year, as is fixed by the

 9  office department in the order of suspension, unless the

10  office department shortens or rescinds such suspension or the

11  order of suspension is modified, rescinded, or reversed.

12         (3)  Upon expiration of the suspension period, if

13  within such period the certificate of authority has not

14  otherwise terminated, the provider's certificate of authority

15  shall automatically be reinstated unless the office department

16  finds that the causes for the suspension have not been removed

17  or that the provider is otherwise not in compliance with the

18  requirements of this chapter. If not so automatically

19  reinstated, the certificate of authority shall be deemed to be

20  revoked as of the end of the suspension period or upon failure

21  of the provider to continue the certificate during the

22  suspension period, whichever event first occurs.

23         Section 1695.  Section 651.108, Florida Statutes, is

24  amended to read:

25         651.108  Administrative fines.--

26         (1)  If the office department finds that one or more

27  grounds exist for the discretionary revocation or suspension

28  of a certificate of authority issued under this chapter, the

29  office department, in lieu of such revocation or suspension,

30  may impose a fine upon the provider in an amount not to exceed

31  $1,000 per violation.

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 1         (2)  If it is found that the provider has knowingly and

 2  willfully violated a lawful order of the office department or

 3  a provision of this chapter, the office department may impose

 4  a fine in an amount not to exceed $10,000 for each such

 5  violation.

 6         Section 1696.  Subsections (1) and (2) of section

 7  651.1081, Florida Statutes, are amended to read:

 8         651.1081  Remedies available in cases of unlawful

 9  sale.--

10         (1)  Upon a determination by the office department that

11  a provider is or has been violating the provisions of this

12  chapter, the office department may order the provider to cease

13  sales and make a rescission offer to the resident in

14  accordance with the provisions of this section.

15         (2)  Upon such order by the office department, every

16  unlawful sale made in violation of this chapter may be

17  rescinded at the election of the resident without penalty.

18         Section 1697.  Subsections (1), (2), and (3) of section

19  651.111, Florida Statutes, are amended to read:

20         651.111  Requests for inspections.--

21         (1)  Any interested party may request an inspection of

22  the records and related financial affairs of a provider

23  providing care in accordance with the provisions of this

24  chapter by transmitting to the office department notice of an

25  alleged violation of applicable requirements prescribed by

26  statute or by rule, specifying to a reasonable extent the

27  details of the alleged violation, which notice shall be signed

28  by the complainant.

29         (2)  The substance of the complaint shall be given to

30  the provider no earlier than the time of the inspection.

31  Unless the complainant specifically requests otherwise,

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 1  neither the substance of the complaint which is provided to

 2  the provider nor any copy of the complaint or any record which

 3  is published, released, or otherwise made available to the

 4  provider shall disclose the name of any person mentioned in

 5  the complaint except the name of any duly authorized officer,

 6  employee, or agent of the office department conducting the

 7  investigation or inspection pursuant to this chapter.

 8         (3)  Upon receipt of a complaint, the office department

 9  shall make a preliminary review; and, unless the office

10  department determines that the complaint is without any

11  reasonable basis, the office department shall make an

12  inspection. The complainant shall be advised, within 30 days

13  after the receipt of the complaint by the office department,

14  of the proposed course of action of the office department.

15         Section 1698.  Section 651.114, Florida Statutes, is

16  amended to read:

17         651.114  Delinquency proceedings; remedial rights.--

18         (1)  Upon determination by the office department that a

19  provider is not in compliance with this chapter, the office

20  department may notify the chair of the advisory council, who

21  may assist the office department in formulating a corrective

22  action plan.

23         (2)  A provider shall make available to the advisory

24  council, no later than 30 days after being requested to do so

25  by the advisory council, a plan for obtaining compliance or

26  solvency.

27         (3)  The council shall, no later than 30 days after

28  notification:

29         (a)  Consider and evaluate the plan submitted by the

30  provider.

31  

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 1         (b)  Discuss the problem and solutions with the

 2  provider.

 3         (c)  Conduct such other business as is necessary.

 4         (d)  Report its findings and recommendations to the

 5  office department, which may require additional modification

 6  of the plan.

 7         (4)(a)  Upon approval of a plan by the office

 8  department, the provider shall submit monthly a progress

 9  report to the council or the office department, or both, in a

10  manner prescribed by the office department.

11         (b)  After a period of 3 months, or at any earlier time

12  deemed necessary, the council shall evaluate the progress by

13  the provider and shall advise the office department of its

14  findings.

15         (5)  Should the office department find that sufficient

16  grounds exist for rehabilitation, liquidation, conservation,

17  reorganization, seizure, or summary proceedings of an insurer

18  as set forth in ss. 631.051, 631.061, and 631.071, the office

19  department may petition for an appropriate court order or may

20  pursue such other relief as is afforded in part I of chapter

21  631. Before invoking its powers under part I of chapter 631,

22  the office department shall notify the chair of the advisory

23  council.

24         (6)  In the event an order of rehabilitation,

25  liquidation, conservation, reorganization, seizure, or summary

26  proceeding has been entered against a provider, the department

27  and office are is vested with all of the powers and duties

28  they have it has under the provisions of part I of chapter 631

29  in regard to delinquency proceedings of insurance companies.

30         (7)  If the financial condition of the continuing care

31  facility or provider is such that, if not modified or

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 1  corrected, its continued operation would result in insolvency,

 2  the office department may direct the provider to formulate and

 3  file with the office department a corrective action plan. If

 4  the provider fails to submit a plan within 30 days after the

 5  office's department's directive or submits a plan that is

 6  insufficient to correct the condition, the office department

 7  may specify a plan and direct the provider to implement the

 8  plan.

 9         (8)(a)  The rights of the office department described

10  in this section shall be subordinate to the rights of a

11  trustee or lender pursuant to the terms of a resolution,

12  ordinance, loan agreement, indenture of trust, mortgage,

13  lease, security agreement, or other instrument creating or

14  securing bonds or notes issued to finance a facility, and the

15  office department, subject to the provisions of paragraph (c),

16  shall not exercise its remedial rights provided under this

17  section and ss. 651.018, 651.106, 651.108, and 651.116 with

18  respect to a facility that is subject to a lien, mortgage,

19  lease, or other encumbrance or trust indenture securing bonds

20  or notes issued in connection with the financing of the

21  facility, if the trustee or lender, by inclusion or by

22  amendment to the loan documents or by a separate contract with

23  the office department, agrees that the rights of residents

24  under a continuing care contract will be honored and will not

25  be disturbed by a foreclosure or conveyance in lieu thereof as

26  long as the resident:

27         1.  Is current in the payment of all monetary

28  obligations required by the continuing care contract;

29         2.  Is in compliance and continues to comply with all

30  provisions of the resident's continuing care contract; and

31  

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 1         3.  Has asserted no claim inconsistent with the rights

 2  of the trustee or lender.

 3         (b)  Nothing in this subsection requires a trustee or

 4  lender to:

 5         1.  Continue to engage in the marketing or resale of

 6  new continuing care contracts;

 7         2.  Pay any rebate of entrance fees as may be required

 8  by a resident's continuing care contract as of the date of

 9  acquisition of the facility by the trustee or lender and until

10  expiration of the period described in paragraph (d);

11         3.  Be responsible for any act or omission of any owner

12  or operator of the facility arising prior to the acquisition

13  of the facility by the trustee or lender; or

14         4.  Provide services to the residents to the extent

15  that the trustee or lender would be required to advance or

16  expend funds that have not been designated or set aside for

17  such purposes.

18         (c)  Should the office department determine, at any

19  time during the suspension of its remedial rights as provided

20  in paragraph (a), that the trustee or lender is not in

21  compliance with the provisions of paragraph (a), or that a

22  lender or trustee has assigned or has agreed to assign all or

23  a portion of a delinquent or defaulted loan to a third party

24  without the office's department's written consent, the office

25  department shall notify the trustee or lender in writing of

26  its determination, setting forth the reasons giving rise to

27  the determination and specifying those remedial rights

28  afforded to the office department which the office department

29  shall then reinstate.

30         (d)  Upon acquisition of a facility by a trustee or

31  lender and evidence satisfactory to the office department that

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 1  the requirements of paragraph (a) have been met, the office

 2  department shall issue a 90-day temporary certificate of

 3  authority granting the trustee or lender the authority to

 4  engage in the business of providing continuing care and to

 5  issue continuing care contracts subject to the office's

 6  department's right to immediately suspend or revoke the

 7  temporary certificate of authority if the office department

 8  determines that any of the grounds described in s. 651.106

 9  apply to the trustee or lender or that the terms of the

10  agreement used as the basis for the issuance of the temporary

11  certificate of authority by the office department have not

12  been or are not being met by the trustee or lender since the

13  date of acquisition.

14         Section 1699.  Section 651.1151, Florida Statutes, is

15  amended to read:

16         651.1151  Administrative, vendor, and management

17  contracts.--

18         (1)  The office department may require a provider to

19  submit any contract for administrative, vendor, or management

20  services if the office department has information and belief

21  that a provider has entered into a contract with an affiliate,

22  an entity controlled by the provider, or an entity controlled

23  by an affiliate of the provider, which has not been disclosed

24  to the office department or which contract requires the

25  provider to pay a fee that is unreasonably high in relation to

26  the service provided.

27         (2)  After review of the contract, the office

28  department may order the provider to cancel the contract in

29  accordance with the terms of the contract and applicable law

30  if it determines that the fees to be paid are so unreasonably

31  high as compared with similar contracts entered into by other

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 1  providers in similar circumstances that the contract is

 2  detrimental to the facility or its residents.

 3         (3)  Any contract with an affiliate, an entity

 4  controlled by the provider, or an entity controlled by an

 5  affiliate of the provider for administrative, vendor, or

 6  management services entered into or renewed after October 1,

 7  1991, shall contain a provision that the contract shall be

 8  canceled upon issuance of an order by the office department

 9  pursuant to this section. A copy of the current management

10  services contract, pursuant to this section, if any, must be

11  on file in the marketing office or other accessible area to

12  residents and the appropriate resident organizations.

13         (4)  Any action of the office department under this

14  section is subject to review pursuant to the procedures

15  provided in chapter 120.

16         Section 1700.  Subsection (12) of section 651.118,

17  Florida Statutes, is amended to read:

18         651.118  Agency for Health Care Administration;

19  certificates of need; sheltered beds; community beds.--

20         (12)  A facility that is under administrative

21  supervision for financial problems pursuant to s. 651.018 may

22  petition the Agency for Health Care Administration for the

23  conversion of sheltered beds to community nursing home beds in

24  accordance with the corrective action plan approved by the

25  office department. The agency shall, upon petition by the

26  facility and through an expedited review, issue a certificate

27  of need converting the sheltered nursing home beds to

28  community nursing home beds.

29         Section 1701.  Section 52 of chapter 2001-45, Laws of

30  Florida, is amended to read:

31  

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 1         Section 52.  Notwithstanding the establishment of need

 2  as provided for in chapter 408, Florida Statutes, no

 3  certificate of need for additional community nursing home beds

 4  shall be approved by the agency until July 1, 2006. The

 5  Legislature finds that the continued growth in the Medicaid

 6  budget for nursing home care has constrained the ability of

 7  the state to meet the needs of its elderly residents through

 8  the use of less restrictive and less institutional methods of

 9  long-term care. It is therefore the intent of the Legislature

10  to limit the increase in Medicaid nursing home expenditures in

11  order to provide funds to invest in long-term care that is

12  community-based and provides supportive services in a manner

13  that is both more cost-effective and more in keeping with the

14  wishes of the elderly residents of this state. This moratorium

15  on certificates of need shall not apply to sheltered nursing

16  home beds in a continuing care retirement community certified

17  by the former Department of Insurance or by the Office of

18  Insurance Regulation pursuant to chapter 651, Florida

19  Statutes.

20         Section 1702.  Section 651.119, Florida Statutes, is

21  amended to read:

22         651.119  Assistance to persons affected by closure due

23  to liquidation or pending liquidation.--

24         (1)  If a facility closes and ceases to operate as a

25  result of liquidation or pending liquidation and residents are

26  forced to relocate, the department shall become a creditor of

27  the facility for the purpose of providing moving expenses for

28  displaced residents and such other care or services as is made

29  possible by the unencumbered assets of the facility. To the

30  extent that another provider provides, as approved by the

31  office department, direct assistance to such residents, the

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 1  cost of such direct assistance shall be offset against

 2  reserves pursuant to subsection (4). The department shall

 3  provide proportional reimbursements of such costs to the

 4  respective providers from such unencumbered assets.

 5         (2)  If the moneys and direct assistance made available

 6  under subsection (1) are not sufficient to cover moving costs,

 7  the office department may seek voluntary contributions from

 8  the reserves maintained by providers under s. 651.035 in

 9  amounts approved by the office department to provide for the

10  moving expenses of the residents in moving to another

11  residence within the state.

12         (3)  If the moneys and direct assistance provided under

13  subsections (1) and (2) are not sufficient to provide for the

14  moving expenses of displaced residents in moving to other

15  residences within the state, the office department may levy

16  pro rata assessments on the reserves of providers maintained

17  under s. 651.035 for such moving expenses of any displaced

18  resident who lacks sufficient assets to pay for such moving

19  expenses. The assessments for such moving expenses on any

20  particular provider may not exceed for any 12-month period an

21  aggregate of 1 percent of the unencumbered portion of the

22  reserves maintained by the provider under s. 651.035. If the

23  office department determines that payment of an assessment

24  under this subsection would impair the financial standing of a

25  facility or its residents, the office department may waive or

26  temporarily defer all or part of the assessment with respect

27  to that provider. The office department shall apply any moneys

28  voluntarily paid by a provider under subsection (1) or

29  subsection (2) to satisfaction of assessments under this

30  subsection.

31  

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 1         (4)  The office department shall permanently reduce the

 2  reserves required of a provider under s. 651.035 to the extent

 3  of the provider's costs under subsection (1), voluntary

 4  contributions under subsection (2), and assessments under

 5  subsection (3). However, the office department shall

 6  thereafter raise the reserve requirements of a provider to the

 7  extent of reimbursements paid to the provider under subsection

 8  (1) unless such increase would raise the reserve requirement

 9  above the amount required under s. 651.035.

10         (5)  No payment, contribution, or assessment may be

11  paid by a provider under this section if the release of funds

12  from the reserves of the provider would violate a bond or

13  lending commitment or covenant.

14         (6)  Moneys received under this section for the support

15  of residents shall be kept in a separate fund maintained and

16  administered by the department. The Continuing Care Advisory

17  Council shall monitor the collection and use of such funds and

18  shall advise the office or department on plans for resident

19  relocation. The council shall seek the assistance of providers

20  licensed under this chapter and other service providers in

21  locating alternative housing and care arrangements.

22         (7)  For the purposes of this section, "moving

23  expenses" means transportation expenses and the cost of

24  packing and relocating personal belongings.

25         Section 1703.  Subsections (1), (3), and (5) of section

26  651.121, Florida Statutes, are amended to read:

27         651.121  Advisory council.--

28         (1)  The Continuing Care Advisory Council to the office

29  department of Insurance is created to consist of 10 members

30  who are residents of this state appointed by the Governor and

31  geographically representative of this state. Three members

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 1  shall be administrators of facilities which hold valid

 2  certificates of authority under this chapter and shall have

 3  been actively engaged in the offering of continuing care

 4  agreements in this state for 5 years before appointment.  The

 5  remaining members shall include:

 6         (a)  A representative of the business community whose

 7  expertise is in the area of management.

 8         (b)  A representative of the financial community who is

 9  not a facility owner or administrator.

10         (c)  A certified public accountant.

11         (d)  An attorney.

12         (e)  Three residents who hold continuing care

13  agreements with a facility certified in this state.

14         (3)  The council members shall serve without pay, but

15  shall be reimbursed for per diem and travel expenses by the

16  office department in accordance with s. 112.061.

17         (5)  The council shall:

18         (a)  Meet at least once a year and, at such annual

19  meeting, elect a chair from their number and elect or appoint

20  a secretary, each of whom shall hold office for 1 year and

21  thereafter until a successor is elected and qualified.

22         (b)  Hold other meetings at such times and places as

23  the office department or the chair of the council may direct.

24         (c)  Keep a record of its proceedings. The books and

25  records of the council shall be prima facie evidence of all

26  matters reported therein and, except for proceedings conducted

27  under s. 651.018, shall be open to inspection at all times.

28         (d)  Act in an advisory capacity to the office

29  department.

30         (e)  Recommend to the office department needed changes

31  in statutes and rules.

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 1         (f)  Upon the request of the office department, assist,

 2  with any corrective action, rehabilitation or cessation of

 3  business plan of a provider.

 4         Section 1704.  Section 651.123, Florida Statutes, is

 5  amended to read:

 6         651.123  Alternative dispute resolution.--The

 7  commission department shall, by rule, adopt alternative

 8  procedures for resolution of disputes between residents and

 9  providers. The rules shall provide for an informal, nonbinding

10  mediation process, and for binding arbitration when mediation

11  fails to resolve a dispute, and shall provide minimum

12  qualifications for arbitrators substantially similar to other

13  arbitration programs under the Florida Insurance Code.  The

14  rules shall specify the types of disputes that are subject to

15  mediation or arbitration, and shall provide that disputes over

16  increases in monthly maintenance fees are not subject to

17  mediation or arbitration.  Arbitration is available only if

18  all parties agree in advance to be bound by the result.

19         Section 1705.  Subsections (2), (3), and (4) of section

20  651.125, Florida Statutes, are amended to read:

21         651.125  Criminal penalties; injunctive relief.--

22         (2)  The state attorney for a circuit shall, upon

23  application of the office department or its authorized

24  representative, institute and conduct the prosecution of an

25  action for violation, within such circuit, of any provision of

26  this chapter.

27         (3)  The office department may bring an action to

28  enjoin a violation, threatened violation, or continued

29  violation of this chapter in the circuit court in and for the

30  county in which the violation occurred, is occurring, or is

31  about to occur.

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 1         (4)  Any action brought by the office department

 2  against a provider shall not abate by reason of a sale or

 3  other transfer of ownership of the facility used to provide

 4  care, which provider is a party to the action, except with the

 5  express written consent of the director of the office

 6  Treasurer and Insurance Commissioner.

 7         Section 1706.  Section 651.134, Florida Statutes, is

 8  amended to read:

 9         651.134  Investigatory records.--Any active

10  investigatory record of the office department made or received

11  under this chapter, and any active examination record

12  necessary to complete an active investigation, is confidential

13  and exempt from s. 119.07(1) until such investigation is

14  completed or ceases to be active. For the purpose of this

15  section, an investigation is active while it is being

16  conducted by the office department with a reasonable, good

17  faith belief that it could lead to the filing of

18  administrative, civil, or criminal proceedings. An

19  investigation does not cease to be active if the office

20  department is proceeding with reasonable dispatch and has a

21  good faith belief that action could be initiated by the office

22  department or other administrative or law enforcement agency.

23         Section 1707.  Subsection (1) and paragraph (j) of

24  subsection (2) of section 655.001, Florida Statutes, are

25  amended to read:

26         655.001  Purpose; application.--The purposes of the

27  financial institutions codes are to:

28         (1)  Provide general regulatory powers to be exercised

29  by the Financial Services Commission and the Office of

30  Financial Institutions and Securities Regulation Department of

31  Banking and Finance in relation to the regulation of financial

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 1  institutions. The financial institutions codes apply to all

 2  state-authorized or state-chartered financial institutions and

 3  to the enforcement of all laws relating to state-authorized or

 4  state-chartered financial institutions.

 5         (2)  Provide for and promote:

 6         (j)  The delegation to the commission department of

 7  adequate rulemaking power and to the office adequate

 8  administrative discretion, subject to the provisions of the

 9  financial institutions codes and to the purposes and policies

10  stated in this section, in order that the supervision and

11  regulation of financial institutions may be flexible and

12  readily responsive to changes in economic conditions, in

13  technology, and in financial institution practices.

14         Section 1708.  Paragraphs (e), (i), (m), (q), and (r)

15  of subsection (1) of section 655.005, Florida Statutes, are

16  amended, and paragraph (s) is added to that subsection, to

17  read:

18         655.005  Definitions.--

19         (1)  As used in the financial institutions codes,

20  unless the context otherwise requires, the term:

21         (e)  "Commission" means the Financial Services

22  Commission "Department" means the Department of Banking and

23  Finance.

24         (i)  "Financial institution-affiliated party" means:

25         1.  Any director, officer, employee, or controlling

26  stockholder (other than a financial institution holding

27  company) of, or agent for, a financial institution,

28  subsidiary, or service corporation;

29         2.  Any other person who has filed or is required to

30  file a change-of-control notice with the appropriate state or

31  federal regulatory agency;

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 1         3.  Any stockholder (other than a financial institution

 2  holding company), any joint venture partner, or any other

 3  person as determined by the office department who participates

 4  in the conduct of the affairs of a financial institution,

 5  subsidiary, or service corporation; or

 6         4.  Any independent contractor (including any attorney,

 7  appraiser, consultant, or accountant) who knowingly or

 8  recklessly participates in:

 9         a.  Any violation of any law or regulation;

10         b.  Any breach of fiduciary duty; or

11         c.  Any unsafe and unsound practice,

12  

13  which caused or is likely to cause more than a minimal

14  financial loss to, or a significant adverse effect on, the

15  financial institution, subsidiary, or service corporation.

16         (m)  "Main office" or "principal office" of a financial

17  institution means the main business office designated or

18  provided for in the articles of incorporation or bylaws of a

19  financial institution at such identified location as has been

20  or is hereafter approved by the Office of Financial

21  Institutions and Securities Regulation department, in the case

22  of a state financial institution, or by the appropriate

23  federal regulatory agency, in the case of a federal financial

24  institution; and, with respect to the trust department of a

25  bank or association that has trust powers, each of these terms

26  means the office or place of business of the trust department

27  at such identified location, which need not be the same

28  location as the main office of the bank or association

29  exclusive of the trust department, as has been or is hereafter

30  approved by the Office of Financial Institutions and

31  Securities Regulation department, in the case of a state bank

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 1  or association that has a trust department, or by the

 2  appropriate federal regulatory agency, in the case of a

 3  national bank or federal association that has a trust

 4  department.  "Main office" or "principal office" of a trust

 5  company means the office designated or provided for as such in

 6  its articles of incorporation, at such identified location as

 7  has been or is hereafter approved by the relevant chartering

 8  authority.

 9         (q)  "Subsidiary" means any organization permitted by

10  the office department which is controlled by a financial

11  institution.

12         (r)  "Unsafe or unsound practice" means any practice or

13  conduct found by the office department to be contrary to

14  generally accepted standards applicable to the specific

15  financial institution, or a violation of any prior order of a

16  state or federal regulatory agency, which practice, conduct,

17  or violation creates the likelihood of loss, insolvency, or

18  dissipation of assets or otherwise prejudices the interest of

19  the specific financial institution or its depositors or

20  members.  In making this determination, the office department

21  must consider the size and condition of the financial

22  institution, the gravity of the violation, and the prior

23  conduct of the person or institution involved.

24         (s)  "Office" means the Office of Financial

25  Institutions and Securities Regulation.

26         Section 1709.  Section 655.012, Florida Statutes, is

27  amended to read:

28         655.012  General supervisory powers of the department;

29  rulemaking; seal.--

30  

31  

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 1         (1)  In addition to other powers conferred by the

 2  financial institutions codes, the office department shall

 3  have:

 4         (a)(1)  General supervision over all state financial

 5  institutions, their subsidiaries, and service corporations.

 6         (b)(2)  Access to all books and records of all persons

 7  over whom the office department exercises general supervision

 8  as is necessary for the performance of the duties and

 9  functions of the office department prescribed by the financial

10  institutions codes.

11         (c)(3)  Power to issue orders and declaratory

12  statements, disseminate information, and otherwise exercise

13  its discretion to effectuate the purposes, policies, and

14  provisions of the financial institutions codes.

15         (2)  In addition to other powers conferred by the

16  financial institutions codes, the commission shall have the

17  power and to adopt rules pursuant to ss. 120.536(1) and 120.54

18  to implement the provisions of such codes.

19         (3)  The office shall have an official seal by which

20  its proceedings are authenticated.

21         Section 1710.  Section 655.015, Florida Statutes, is

22  amended to read:

23         655.015  Construction; standards to be observed by

24  commission and office department.--

25         (1)  The financial institutions codes shall be

26  liberally construed and applied to promote their purposes and

27  policies.

28         (2)  The purposes and policies as stated in s. 655.001

29  constitute standards to be observed by the commission and

30  office department in the exercise of their its discretionary

31  powers under the financial institutions codes, in the adoption

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 1  of rules, in the issuance of orders and declaratory

 2  statements, in the examination and supervision of financial

 3  institutions, and in all matters of construction and

 4  application of the financial institutions codes required for

 5  any determination or action by the department.

 6         (3)  The headings, captions, and catchlines at the

 7  beginning of sections, subsections, and paragraphs are for

 8  convenience only, do not constitute any part of the statutes

 9  comprising the financial institutions codes, do not constitute

10  a complete index of the financial institutions codes, are not

11  indicative of the intent of the financial institutions codes,

12  and may not be used in construing or interpreting the

13  financial institutions codes.

14         Section 1711.  Section 655.016, Florida Statutes, is

15  amended to read:

16         655.016  Liability when acting upon rule, order, or

17  declaratory statement issued by department.--No person acting,

18  or who has acted, in good faith reliance upon a rule, order,

19  or declaratory statement issued by the commission or office

20  department shall be subject to any criminal, civil, or

21  administrative liability for such action, notwithstanding a

22  subsequent decision by a court of competent jurisdiction

23  invalidating the rule, order, or declaratory statement.  In

24  the case of an order or a declaratory statement which is not

25  of general application, no person other than the person to

26  whom the order or declaratory statement was issued is entitled

27  to rely upon it, except upon material facts or circumstances

28  which are substantially the same as those upon which the order

29  or declaratory statement was based.

30         Section 1712.  Section 655.031, Florida Statutes, is

31  amended to read:

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 1         655.031  Administrative enforcement guidelines.--

 2         (1)  In imposing any administrative remedy or penalty

 3  provided for in the financial institutions codes, the office

 4  department shall take into account the appropriateness of the

 5  penalty with respect to the size of the financial resources

 6  and good faith of the person charged, the gravity of the

 7  violation, the history of previous violations, and such other

 8  matters as justice may require.

 9         (2)  All administrative proceedings under ss. 655.033

10  and 655.037 shall be conducted in accordance with chapter 120.

11  Any service required or authorized to be made by the office

12  department under the financial institutions codes may be made

13  by certified mail, return receipt requested, delivered to

14  addressee only; by personal delivery; or in accordance with

15  chapter 48.  The service provided for hereunder is effective

16  from the date of delivery.

17         Section 1713.  Section 655.032, Florida Statutes, is

18  amended to read:

19         655.032  Investigations, subpoenas, hearings, and

20  witnesses.--

21         (1)  The office department may make investigations,

22  within or outside this state, which it deems necessary to

23  determine whether a person has violated or is about to violate

24  any provision of the financial institutions codes or of the

25  rules adopted by the commission department pursuant to such

26  codes.

27         (2)(a)  In the course of or in connection with an

28  investigation by the office department pursuant to the

29  provisions of subsection (1) or an investigation or

30  examination in connection with any application to the office

31  department for the organization or establishment of a state

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 1  financial institution or a branch thereof, and in connection

 2  with an examination of a state financial institution,

 3  subsidiary, or service corporation by the office department,

 4  the office department, or any of its officers holding no

 5  lesser title and position than examiner in charge or attorney

 6  at law, shall have the power:

 7         1.  To administer oaths and affirmations;

 8         2.  To take or cause to be taken testimony and

 9  depositions; and

10         3.  To issue, revoke, quash, or modify subpoenas and

11  subpoenas duces tecum under the seal of the office department

12  or to cause any such subpoena or subpoena duces tecum to be

13  issued by any county court judge or clerk of the circuit court

14  or county court to require persons to be or appear before the

15  office department at a time and place to be therein named and

16  to bring such books, records, and documents for inspection as

17  may be therein designated.  Such subpoenas may be served by a

18  representative of the office department or may be served as

19  otherwise provided for by law for the service of subpoenas.

20         (b)  In connection with any such investigation or

21  examination, the office department may permit a person to file

22  a statement in writing, under oath or otherwise as the office

23  department determines, as to facts and circumstances specified

24  by the office department.

25         (3)(a)  In the event of noncompliance with a subpoena

26  issued or caused to be issued by the office department

27  pursuant to this section, the office department may petition

28  the circuit court of the county in which the person subpoenaed

29  resides or has its principal place of business for an order

30  requiring the subpoenaed person to appear and testify and to

31  produce such books, records, and documents as are specified in

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 1  such subpoena duces tecum.  The office department is entitled

 2  to the summary procedure provided in s. 51.011, and the court

 3  shall advance the cause on its calendar.

 4         (b)  A copy of the petition shall be served upon the

 5  person subpoenaed by any person authorized by this section to

 6  serve subpoenas, who shall make and file with the court an

 7  affidavit showing the time, place, and date of service.

 8         (c)  At any hearing on any such petition, the person

 9  subpoenaed, or any person whose interests will be

10  substantially affected by the investigation, examination, or

11  subpoena, may appear and object to the subpoena and to the

12  granting of the petition. The court may make any order which

13  justice requires to protect a party or other person and his or

14  her personal and property rights, including, but not limited

15  to, protection from annoyance, embarrassment, oppression, or

16  undue burden or expense.

17         (d)  Failure to comply with an order granting, in whole

18  or in part, a petition for enforcement of a subpoena is a

19  contempt of court.

20         (4)  Witnesses shall be entitled to the same fees and

21  mileage to which they might be entitled by law for attending

22  as witnesses in the circuit court, except that no fees or

23  mileage shall be allowed in the case of testimony of a

24  financial institution-affiliated party if such testimony is

25  taken at the principal office of the state financial

26  institution, subsidiary, or service corporation or at the

27  residence of the financial institution-affiliated party.

28         (5)  Reasonable and necessary expenses incurred by the

29  office department and payable to persons in investigations may

30  be assessed against such an applicant, state financial

31  institution, subsidiary, service corporation, or financial

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 1  institution-affiliated party on the basis of actual costs

 2  incurred. Assessable expenses include, but are not limited to:

 3  expenses for interpreters; expenses for communications;

 4  expenses for legal representation; expenses for economic,

 5  legal, or other research, analyses, and testimony; and fees

 6  and expenses for witnesses.  The failure to reimburse the

 7  office department is a ground for denial of the application or

 8  for revocation of any approval thereof.

 9         Section 1714.  Section 655.0321, Florida Statutes, is

10  amended to read:

11         655.0321  Restricted access to certain hearings,

12  proceedings, and related documents.--The office department

13  shall consider the public purposes specified in s.

14  119.14(4)(b) in determining whether the hearings and

15  proceedings conducted pursuant to s. 655.033 for the issuance

16  of cease and desist orders and s. 655.037 for the issuance of

17  suspension or removal orders shall be closed and exempt from

18  the provisions of s. 286.011, and whether related documents

19  shall be confidential and exempt from the provisions of s.

20  119.07(1).

21         Section 1715.  Subsections (1), (3), and (4) of section

22  655.0322, Florida Statutes, are amended to read:

23         655.0322  Prohibited acts and practices; criminal

24  penalties.--

25         (1)  As used in this section, the term "financial

26  institution" means a financial institution as defined in s.

27  655.50 which includes a state trust company, state or national

28  bank, state or federal association, state or federal savings

29  bank, state or federal credit union, Edge Act or agreement

30  corporation, international bank agency, representative office

31  or administrative office or other business entity as defined

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 1  by the commission department by rule, whether organized under

 2  the laws of this state, the laws of another state, or the laws

 3  of the United States, which institution is located in this

 4  state.

 5         (3)  It is unlawful for any financial

 6  institution-affiliated party to:

 7         (a)  Knowingly receive or possess himself or herself of

 8  any of its property otherwise than in payment of a just

 9  demand, and, with intent to deceive or defraud, to omit to

10  make or cause to be made a full and true entry thereof in its

11  books and accounts, or concur in omitting to make any material

12  entry thereof;

13         (b)  Embezzle, abstract, or misapply any money,

14  property, or thing of value of the financial institution,

15  subsidiary, or service corporation with intent to deceive or

16  defraud such financial institution, subsidiary, or service

17  corporation;

18         (c)  Knowingly make, draw, issue, put forth, or assign

19  any certificate of deposit, draft, order, bill of exchange,

20  acceptance, note, debenture, bond or other obligation,

21  mortgage, judgment, or decree without authority from the board

22  of directors of such financial institution;

23         (d)  Make any false entry in any book, report, or

24  statement of such financial institution, subsidiary, or

25  service corporation with intent to deceive or defraud such

26  financial institution or another person, firm, or corporation,

27  or with intent to deceive the office department, any other

28  appropriate federal regulatory agency, or any authorized

29  representative appointed to examine the affairs of such

30  financial institution, subsidiary, or service corporation; or

31  

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 1         (e)  Deliver or disclose to the office department or

 2  any of its employees any examination report, report of

 3  condition, report of income and dividends, internal audit,

 4  account, statement, or document known by him or her to be

 5  fraudulent or false as to any material matter.

 6  

 7  Any person who violates this subsection is guilty of a felony

 8  of the third degree, punishable as provided in s. 775.082, s.

 9  775.083, or s. 775.084.

10         (4)  It is unlawful for any financial

11  institution-affiliated party to knowingly place among the

12  assets of such financial institution, subsidiary, or service

13  corporation any note, obligation, or security which the

14  financial institution, subsidiary, or service corporation does

15  not own or which to the individual's knowledge is fraudulent

16  or otherwise worthless or for any such individual to represent

17  to the office department that any note, obligation, or

18  security carried as an asset of such financial institution,

19  subsidiary, or service corporation is the property of the

20  financial institution, subsidiary, or service corporation and

21  is genuine if it is known to such individual that such

22  representation is false or that such note, obligation, or

23  security is fraudulent or otherwise worthless.  Any person who

24  violates this subsection is guilty of a felony of the third

25  degree, punishable as provided in s. 775.082, s. 775.083, or

26  s. 775.084.

27         Section 1716.  Subsections (1), (3), and (6) of section

28  655.033, Florida Statutes, are amended to read:

29         655.033  Cease and desist orders.--

30         (1)  The office department may issue and serve upon any

31  state financial institution, subsidiary, or service

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 1  corporation, or upon any financial institution-affiliated

 2  party, a complaint stating charges whenever the office

 3  department has reason to believe that such state financial

 4  institution, subsidiary, service corporation, financial

 5  institution-affiliated party, or individual named therein is

 6  engaging in or has engaged in conduct that is:

 7         (a)  An unsafe or unsound practice;

 8         (b)  A violation of any law relating to the operation

 9  of a financial institution;

10         (c)  A violation of any rule of the commission

11  department;

12         (d)  A violation of any order of the office department;

13         (e)  A breach of any written agreement with the office

14  department;

15         (f)  A prohibited act or practice pursuant to s.

16  655.0322; or

17         (g)  A willful failure to provide information or

18  documents to the office department or any appropriate federal

19  agency, or any of its representatives, upon written request.

20         (3)  If no hearing is requested within the time allowed

21  by ss. 120.569 and 120.57, or if a hearing is held and the

22  office department finds that any of the charges are true, the

23  office department may enter an order directing the state

24  financial institution, subsidiary, service corporation,

25  financial institution-affiliated party, or the individual

26  named therein to cease and desist from engaging in the conduct

27  complained of and to take corrective action.

28         (6)  Whenever the office department finds that conduct

29  described in subsection (1) is likely to cause insolvency,

30  substantial dissipation of assets or earnings of the state

31  financial institution, subsidiary, or service corporation or

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 1  substantial prejudice to the depositors, members, or

 2  shareholders, it may issue an emergency cease and desist order

 3  requiring the state financial institution, subsidiary, service

 4  corporation, or financial institution-affiliated party to

 5  immediately cease and desist from engaging in the conduct

 6  complained of and to take corrective action.  The emergency

 7  order is effective immediately upon service of a copy of the

 8  order upon the state financial institution, subsidiary,

 9  service corporation, or financial institution-affiliated party

10  and remains effective for 90 days. If the office department

11  begins nonemergency cease and desist proceedings under

12  subsection (1), the emergency order remains effective until

13  the conclusion of the proceedings under ss. 120.569 and

14  120.57.  Any emergency order entered under this subsection is

15  confidential and exempt from s. 119.07(1) until the emergency

16  order is made permanent, unless the office department finds

17  that such confidentiality will result in substantial risk of

18  financial loss to the public.

19         Section 1717.  Section 655.034, Florida Statutes, is

20  amended to read:

21         655.034  Injunctions.--Whenever a violation of the

22  financial institutions codes is threatened or impending and

23  such violation will cause substantial injury to a state

24  financial institution or to the depositors, members,

25  creditors, or stockholders thereof, the circuit court has

26  jurisdiction to hear any complaint filed by the office

27  department and, upon proper showing, to issue an injunction

28  restraining such violation or granting other such appropriate

29  relief.

30         Section 1718.  Section 655.037, Florida Statutes, is

31  amended to read:

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 1         655.037  Removal of a financial institution-affiliated

 2  party by the office department.--

 3         (1)  The office department may issue and serve upon any

 4  financial institution-affiliated party and upon the state

 5  financial institution, subsidiary, or service corporation

 6  involved, a complaint stating charges whenever the office

 7  department has reason to believe that the financial

 8  institution-affiliated party is engaging or has engaged in

 9  conduct that is:

10         (a)  An unsafe or unsound practice;

11         (b)  A prohibited act or practice;

12         (c)  A willful violation of any law relating to

13  financial institutions;

14         (d)  A violation of any other law involving fraud or

15  moral turpitude which constitutes a felony;

16         (e)  A violation of s. 655.50, relating to the Florida

17  Control of Money Laundering in Financial Institutions Act;

18  chapter 896, relating to offenses related to financial

19  transactions; or any similar state or federal law;

20         (f)  A willful violation of any rule of the commission

21  department;

22         (g)  A willful violation of any order of the office

23  department;

24         (h)  A willful breach of any written agreement with the

25  office department; or

26         (i)  An act of commission or omission or a practice

27  which is a breach of trust or a breach of fiduciary duty.

28         (2)  The complaint must contain the statement of facts

29  and notice of opportunity for a hearing pursuant to ss.

30  120.569 and 120.57.

31  

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 1         (3)  If no hearing is requested within the time allowed

 2  by ss. 120.569 and 120.57, or if a hearing is held and the

 3  office department finds that any of the charges in the

 4  complaint are true and that the state financial institution

 5  has suffered or will likely suffer loss or other damage or

 6  that the interests of the depositors, members, or shareholders

 7  could be seriously prejudiced by reason of such violation or

 8  practice or breach of fiduciary duty or that the financial

 9  institution-affiliated party has received financial gain by

10  reason of such violation, practice, or breach of fiduciary

11  duty, and that such violation, practice, or breach of

12  fiduciary duty is one involving personal dishonesty on the

13  part of such financial institution-affiliated party or a

14  continuing disregard for the safety or soundness of the state

15  financial institution, subsidiary, or service corporation, the

16  office department may enter an order removing the financial

17  institution-affiliated party or restricting or prohibiting

18  participation by such financial institution-affiliated party

19  in the affairs of that particular state financial institution,

20  subsidiary, or service corporation or any other state

21  financial institution, subsidiary, or service corporation.

22         (4)  If the financial institution-affiliated party

23  fails to respond to the complaint within the time allowed in

24  ss. 120.569 and 120.57, such failure constitutes a default and

25  justifies the entry of an order of removal.

26         (5)  A contested or default order of removal is

27  effective when reduced to writing and served on the state

28  financial institution, subsidiary, or service corporation and

29  the financial institution-affiliated party.  An uncontested

30  order of removal is effective as agreed.

31  

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 1         (6)(a)  The chief executive officer, or the person

 2  holding the equivalent office, of a state financial

 3  institution shall promptly notify the office department if he

 4  or she has actual knowledge that any financial

 5  institution-affiliated party is charged with a felony in a

 6  state or federal court.

 7         (b)  Whenever any financial institution-affiliated

 8  party is charged with a felony in a state or federal court, or

 9  in the courts of any foreign country with which the United

10  States maintains diplomatic relations, and such charge alleges

11  violation of any law involving fraud, currency transaction

12  reporting, money laundering, theft, or moral turpitude and the

13  charge under such foreign law is equivalent to a felony charge

14  under state or federal law, the office department may enter an

15  emergency order suspending such financial

16  institution-affiliated party or restricting or prohibiting

17  participation by such financial institution-affiliated party

18  in the affairs of that particular state financial institution,

19  subsidiary, or service corporation or any other financial

20  institution, subsidiary, or service corporation, upon service

21  of the order upon the state financial institution, subsidiary,

22  or service corporation and the financial

23  institution-affiliated party so charged.  The order shall

24  contain notice of opportunity for a hearing pursuant to ss.

25  120.569 and 120.57, where the financial institution-affiliated

26  party may request a postsuspension hearing to show that

27  continued service to or participation in the affairs of the

28  state financial institution, subsidiary, or service

29  corporation does not pose a threat to the interests of the

30  state financial institution's depositors, members, or

31  stockholders, or threaten to impair public confidence in the

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 1  state financial institution.  In accordance with applicable

 2  commission departmental rules, the office department shall

 3  notify the financial institution-affiliated party whether the

 4  order suspending or prohibiting the financial

 5  institution-affiliated party from participation in the affairs

 6  of a state financial institution, subsidiary, or service

 7  corporation will be rescinded or otherwise modified.  The

 8  emergency order will remain in effect, unless otherwise

 9  modified by the office department, until the criminal charge

10  is disposed of.  The acquittal of the financial

11  institution-affiliated party charged, or the final, unappealed

12  dismissal of all charges against such person, will dissolve

13  the emergency order, but will not prohibit the office

14  department from instituting proceedings under subsection (1).

15  If the financial institution-affiliated party charged is

16  convicted or pleads guilty or nolo contendere, whether or not

17  an adjudication of guilt is entered by the court, the

18  emergency order becomes final.

19         (7)  Any financial institution-affiliated party removed

20  from office pursuant to this section is not eligible for

21  reelection to such position or to any official position in any

22  financial institution in this state except with the written

23  consent of the office department.  Any financial

24  institution-affiliated party who is removed, restricted, or

25  prohibited from participation in the affairs of a state

26  financial institution pursuant to this section may petition

27  the office department for modification or termination of any

28  such removal, restriction, or prohibition.

29         (8)  The resignation, termination of employment or

30  participation, or separation from a state financial

31  institution, subsidiary, or service corporation of the

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 1  financial institution-affiliated party does not affect the

 2  jurisdiction and authority of the office department to issue

 3  any notice and proceed under this section against such

 4  financial institution-affiliated party, if such notice is

 5  served before the end of the 6-year period beginning on the

 6  date such person ceases to be such a financial

 7  institution-affiliated party with respect to such state

 8  financial institution, subsidiary, or service corporation.

 9         Section 1719.  Section 655.0385, Florida Statutes, is

10  amended to read:

11         655.0385  Disapproval of directors and executive

12  officers.--

13         (1)  Each state financial institution shall notify the

14  office department of the proposed appointment of any

15  individual to the board of directors or the employment of any

16  individual as an executive officer or equivalent position at

17  least 60 days before such appointment or employment becomes

18  effective, if the state financial institution:

19         (a)  Has been chartered for less than 2 years;

20         (b)  Has undergone a change in control or conversion

21  within the preceding 2 years. The office department may exempt

22  a financial institution from this paragraph if it operates in

23  a safe and sound manner;

24         (c)  Is not in compliance with the minimum capital

25  requirements applicable to such financial institution; or

26         (d)  Is otherwise operating in an unsafe and unsound

27  condition, as determined by the office department, on the

28  basis of such financial institution's most recent report of

29  condition or report of examination.

30         (2)  A state financial institution may not appoint any

31  individual to the board of directors, or employ any individual

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 1  as an executive officer or equivalent position, if the office

 2  department issues a notice of disapproval with respect to that

 3  person.

 4         (3)  The office department shall issue a notice of

 5  disapproval if the competence, experience, character, or

 6  integrity of the individual to be appointed or employed

 7  indicates that it is not in the best interests of the

 8  depositors, the members, or the public to permit the

 9  individual to be employed by or associated with the state

10  financial institution.

11         (4)  The commission department may adopt rules to

12  implement this section.

13         Section 1720.  Subsection (2) of section 655.0386,

14  Florida Statutes, is amended to read:

15         655.0386  Transactions with financial

16  institution-affiliated parties.--

17         (2)  DISCLOSURE OF PERSONAL INTEREST.--Without

18  limitation by any of the specific provisions of this section,

19  the commission or office department may require the disclosure

20  by financial institution-affiliated parties of their personal

21  interests, directly or indirectly, in any business or

22  transactions on behalf of or involving the state financial

23  institution, subsidiary, or service corporation and of their

24  control of or active participation in enterprises having

25  activities related to the business of the state financial

26  institution, subsidiary, or service corporation.

27         Section 1721.  Section 655.0391, Florida Statutes, is

28  amended to read:

29         655.0391  Retention of supervision by office

30  department.--A state financial institution may not cause to be

31  performed, by contract or otherwise, any financial-institution

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 1  services for itself, whether at or away from its main or

 2  branch office or on or off its premises, unless assurances

 3  satisfactory to the office department are furnished to the

 4  office department by both the state financial institution and

 5  the person performing such services that the performance

 6  thereof will be subject to regulation and examination by the

 7  office department to the same extent as if such services were

 8  being performed by the state financial institution itself on

 9  its own premises.

10         Section 1722.  Section 655.041, Florida Statutes, is

11  amended to read:

12         655.041  Administrative fines; enforcement.--

13         (1)  The office department may, by complaint, initiate

14  a proceeding pursuant to chapter 120 to impose an

15  administrative fine against any person found to have violated

16  any provision of the financial institutions codes or a cease

17  and desist order of the office department or any written

18  agreement with the office department.  No such proceeding

19  shall be initiated and no fine shall accrue pursuant to this

20  section until after such person has been notified in writing

21  of the nature of the violation and has been afforded a

22  reasonable period of time, as set forth in the notice, to

23  correct the violation and has failed to do so.

24         (2)  Any such fine may not exceed $2,500 a day for each

25  violation except as provided in this section.

26         (a)  If the office department determines that any such

27  person has recklessly violated any provision of the financial

28  institutions codes or a cease and desist order of the office

29  department or any written agreement with the office

30  department, which violation results in more than a minimal

31  loss to a financial institution, subsidiary, or service

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 1  corporation, or a pecuniary benefit to such person, the office

 2  department may impose a fine not exceeding $10,000 a day for

 3  each day the violation continues.

 4         (b)  If the office department determines that any such

 5  person has knowingly violated any provision of the financial

 6  institutions codes or a cease and desist order of the office

 7  department or any written agreement with the office

 8  department, which violation results in more than a minimal

 9  loss to a financial institution, subsidiary, or service

10  corporation, or a pecuniary benefit to such a person, the

11  office department may impose a fine not exceeding the lesser

12  of $500,000 per day or 1 percent of the total assets in the

13  case of a financial institution, or $50,000 per day in any

14  other case for each day the violation continues.

15         (c)  The office department may by complaint impose an

16  administrative fine, not exceeding $10,000 a day, upon any

17  financial institution-affiliated party, and upon a state

18  financial institution, subsidiary, service corporation, or

19  affiliate, who refuses to permit an examiner to examine a

20  state financial institution, subsidiary, or service

21  corporation, who refuses to permit an examiner to review the

22  books and records of an affiliate, or who refuses to give an

23  examiner any information required in the course of any

24  examination or review of the books and records.

25         (3)  Any administrative fine levied by the office

26  department may be enforced by the office department by

27  appropriate proceedings in the circuit court of the county in

28  which such person resides or in which the principal office of

29  a state financial institution is located.  In any

30  administrative or judicial proceeding arising under this

31  section, a party may elect to correct the violation asserted

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 1  by the office department and, upon doing so, any fine ceases

 2  to accrue; however, an election to correct the violation does

 3  not render any administrative or judicial proceeding moot.

 4         Section 1723.  Section 655.043, Florida Statutes, is

 5  amended to read:

 6         655.043  Articles of incorporation; amendments;

 7  approval.--A bank, trust company, or association may not amend

 8  its articles of incorporation without the written approval of

 9  the office department.

10         Section 1724.  Subsections (1) and (2) of section

11  655.044, Florida Statutes, are amended to read:

12         655.044  Accounting practices; bad debts ineligible to

13  be carried as assets.--

14         (1)  Except as otherwise provided by law, a state

15  financial institution shall observe generally accepted

16  accounting principles and practices.  The commission

17  department may authorize by rule exceptions to such accounting

18  practices as necessary.

19         (2)  A state financial institution, subsidiary, or

20  service corporation may not carry as an asset any note,

21  obligation, or security which it does not own absolutely or

22  which is known by the state financial institution to be

23  fraudulent or otherwise worthless; and a state financial

24  institution may not carry as an asset, in any report to the

25  office department or in any published report, any note or

26  other obligation which is past due or upon which no interest

27  has been paid for 1 year or longer or which has been

28  determined by the office department to be a loss.  However,

29  past due paper may be carried to the extent of the reasonable

30  value of any lien or other collateral given to secure such

31  obligation; and, if the obligation is in the process of

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 1  collection, it may be carried at its reasonable value as

 2  determined by the board of directors.  The office department

 3  may order the revision of any value so determined hereunder.

 4         Section 1725.  Section 655.045, Florida Statutes, is

 5  amended to read:

 6         655.045  Examinations, reports, and internal audits;

 7  penalty.--

 8         (1)(a)  The office department shall conduct an

 9  examination of the condition of each state financial

10  institution during each 18-month period, beginning July 1,

11  1981. The office department may accept an examination made by

12  the appropriate federal regulator, insuring or guaranteeing

13  corporation, or agency with respect to the condition of the

14  state financial institution or may make a joint or concurrent

15  examination with the appropriate federal regulator, insuring

16  or guaranteeing corporation, or agency.  However, at least

17  once during each 36-month period beginning on July 3, 1992,

18  the office department shall conduct an examination of each

19  state financial institution in such a manner as to allow the

20  preparation of a complete examination report not subject to

21  the right of any federal or other non-Florida entity to limit

22  access to the information contained therein.  If, as a part of

23  an examination or investigation of a state financial

24  institution, subsidiary, or service corporation, the office

25  department has reason to believe that an affiliate is engaged

26  in an unsafe or unsound practice or that the affiliate has a

27  negative impact on the state financial institution,

28  subsidiary, or service corporation, then the office department

29  may review such books and records as are reasonably related to

30  the examination or investigation. The office department may

31  furnish a copy of all examinations or reviews made of such

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 1  financial institutions or their affiliates to the state or

 2  federal financial institution regulators participating in the

 3  examination of a bank holding company; an association holding

 4  company; or any of their subsidiaries, service corporations,

 5  or affiliates; an insuring or guaranteeing corporation or

 6  agency or its representatives; or state financial institution

 7  regulators participating in the examination of a holding

 8  company or its subsidiaries.

 9         (b)  The office department may recover the costs of

10  examination and supervision of a state financial institution,

11  subsidiary, or service corporation that is determined by the

12  office department to be engaged in an unsafe or unsound

13  practice.  The office department may also recover the costs of

14  any review conducted pursuant to paragraph (a) of any

15  affiliate of a state financial institution determined by the

16  office department to have contributed to an unsafe or unsound

17  practice at a state financial institution, subsidiary, or

18  service corporation.

19         (c)  For the purposes of this section, the term "costs"

20  means the salary and travel expenses directly attributable to

21  the field staff examining the state financial institution,

22  subsidiary, or service corporation, and the travel expenses of

23  any supervisory staff required as a result of examination

24  findings.  The mailing of any costs incurred under this

25  subsection must be postmarked not later than 30 days after the

26  date of receipt of a notice stating that such costs are due.

27  The office department may levy a late payment of up to $100

28  per day or part thereof that a payment is overdue, unless it

29  is excused for good cause.  However, for intentional late

30  payment of costs, the office department may levy an

31  

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 1  administrative fine of up to $1,000 per day for each day the

 2  payment is overdue.

 3         (d)  The office department may require an audit of any

 4  state financial institution, subsidiary, or service

 5  corporation by an independent certified public accountant

 6  approved by the office department whenever the office

 7  department, after conducting an examination of such state

 8  financial institution, subsidiary, or service corporation, or

 9  after accepting an examination of such state financial

10  institution by the appropriate state or federal regulatory

11  agency, determines that such an audit is necessary in order to

12  ascertain the condition of the financial institution,

13  subsidiary, or service corporation. The cost of such audit

14  shall be paid by the state financial institution, subsidiary,

15  or state service corporation.

16         (2)(a)  The department shall require Each state

17  financial institution, subsidiary, or service corporation

18  shall to submit a report, at least four times each calendar

19  year, as of such dates as the commission or office determines

20  department may determine. Such report must include such

21  information as the commission department by rule requires for

22  that type of institution.

23         (b)  The office department shall levy an administrative

24  fine of up to $100 per day for each day the report is past

25  due, unless it is excused for good cause.  However, for

26  intentional late filing of the report required under paragraph

27  (a), the office department shall levy an administrative fine

28  of up to $1,000 per day for each day the report is past due.

29         (3)(a)  The department shall require The board of

30  directors of each state financial institution or, in the case

31  of a credit union, the supervisory committee or audit

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 1  committee shall to perform or cause to be performed, within

 2  each calendar year, an internal audit of each state financial

 3  institution, subsidiary, or service corporation and to file a

 4  copy of the report and findings of such audit with the office

 5  department on a timely basis.  Such internal audit must

 6  include such information as the commission department by rule

 7  requires for that type of institution.

 8         (b)  With the approval of the office department, the

 9  board of directors or, in the case of a credit union, the

10  supervisory committee may elect, in lieu of such periodic

11  audits, to adopt and implement an adequate continuous audit

12  system and procedure which must include full, adequate, and

13  continuous written reports to, and review by, the board of

14  directors or, in the case of a credit union, the supervisory

15  committee, together with written statements of the actions

16  taken thereon and reasons for omissions to take actions, all

17  of which shall be noted in the minutes and filed among the

18  records of the board of directors or, in the case of a credit

19  union, the supervisory committee.  If at any time such

20  continuous audit system and procedure, including the reports

21  and statements, becomes inadequate, in the judgment of the

22  office department, the state financial institution shall

23  promptly make such changes as may be required by the office

24  department to cause the same to accomplish the purpose of this

25  section.

26         (4)  A copy of the report of each examination must be

27  furnished to the financial institution examined.  Such report

28  of examination shall be presented to the board of directors at

29  its next regular or special meeting.

30         Section 1726.  Section 655.047, Florida Statutes, is

31  amended to read:

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 1         655.047  Assessments; financial institutions.--

 2         (1)  Each state financial institution shall pay to the

 3  office department a semiannual assessment based on the total

 4  assets as shown on the statement of condition of the financial

 5  institution on the last business day in December and the last

 6  business day in June of each year.

 7         (2)  The mailing of a semiannual assessment must be

 8  postmarked on or before January 31 and July 31 of each year.

 9  The office department may levy a late payment penalty of up to

10  $100 per day or part thereof that a semiannual assessment

11  payment is overdue, unless it is excused for good cause.

12  However, for intentional late payment of a semiannual

13  assessment, the office department shall levy an administrative

14  fine of up to $1,000 a day for each day the semiannual

15  assessment is overdue.

16         (3)  The assessments required by this section cover the

17  6-month period following the first day of the month in which

18  they are due.  The office department may prorate the amount of

19  the semiannual assessment; however, no portion of a semiannual

20  assessment is refundable.

21         Section 1727.  Section 655.049, Florida Statutes, is

22  amended to read:

23         655.049  Deposit of fees and assessments.--The

24  assessments, application fees, late payment penalties, civil

25  penalties, administrative fines, and other fees or penalties

26  provided for in the financial institutions codes shall, in all

27  cases, be paid directly to the office department, which shall

28  deposit all thereof in the Financial Institutions' Regulatory

29  Trust Fund, which fund shall be used by the office department

30  to pay its costs for administration of the financial

31  institutions codes.  The office department shall determine and

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 1  report to the Legislature whether the fees and assessments

 2  provided in the financial institutions codes and assessed

 3  against and collected from the financial institutions that are

 4  subject to the financial institutions codes support the

 5  office's department's expenditures.  The Financial

 6  Institutions' Regulatory Trust Fund is subject to the service

 7  charge imposed pursuant to chapter 215.

 8         Section 1728.  Section 655.057, Florida Statutes, is

 9  amended to read:

10         655.057  Records; limited restrictions upon public

11  access.--

12         (1)  Except as otherwise provided in this section and

13  except for such portions thereof which are otherwise public

14  record, all records and information relating to an

15  investigation by the office department are confidential and

16  exempt from the provisions of s. 119.07(1) until such

17  investigation is completed or ceases to be active.  For

18  purposes of this subsection, an investigation is considered

19  "active" while such investigation is being conducted by the

20  office department with a reasonable, good faith belief that it

21  may lead to the filing of administrative, civil, or criminal

22  proceedings.  An investigation does not cease to be active if

23  the office department is proceeding with reasonable dispatch,

24  and there is a good faith belief that action may be initiated

25  by the office department or other administrative or law

26  enforcement agency. After an investigation is completed or

27  ceases to be active, portions of such records relating to the

28  investigation shall be confidential and exempt from the

29  provisions of s. 119.07(1) to the extent that disclosure

30  would:

31  

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 1         (a)  Jeopardize the integrity of another active

 2  investigation;

 3         (b)  Impair the safety and soundness of the financial

 4  institution;

 5         (c)  Reveal personal financial information;

 6         (d)  Reveal the identity of a confidential source;

 7         (e)  Defame or cause unwarranted damage to the good

 8  name or reputation of an individual or jeopardize the safety

 9  of an individual; or

10         (f)  Reveal investigative techniques or procedures.

11         (2)  Except as otherwise provided in this section and

12  except for such portions thereof which are public record,

13  reports of examinations, operations, or condition, including

14  working papers, or portions thereof, prepared by, or for the

15  use of, the office department or any state or federal agency

16  responsible for the regulation or supervision of financial

17  institutions in this state are confidential and exempt from

18  the provisions of s. 119.07(1). However, such reports or

19  papers or portions thereof may be released to:

20         (a)  The financial institution under examination;

21         (b)  Any holding company of which the financial

22  institution is a subsidiary;

23         (c)  Proposed purchasers if necessary to protect the

24  continued financial viability of the financial institution,

25  upon prior approval by the board of directors of such

26  institution;

27         (d)  Persons proposing in good faith to acquire a

28  controlling interest in or to merge with the financial

29  institution, upon prior approval by the board of directors of

30  such financial institution;

31  

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 1         (e)  Any officer, director, committee member, employee,

 2  attorney, auditor, or independent auditor officially connected

 3  with the financial institution, holding company, proposed

 4  purchaser, or person seeking to acquire a controlling interest

 5  in or merge with the financial institution; or

 6         (f)  A fidelity insurance company, upon approval of the

 7  financial institution's board of directors.  However, a

 8  fidelity insurance company may receive only that portion of an

 9  examination report relating to a claim or investigation being

10  conducted by such fidelity insurance company.

11         (g)  Examination, operation, or condition reports of a

12  financial institution shall be released by the office

13  department within 1 year after the appointment of a

14  liquidator, receiver, or conservator to such financial

15  institution.  However, any portion of such reports which

16  discloses the identities of depositors, bondholders, members,

17  borrowers, or stockholders, other than directors, officers, or

18  controlling stockholders of the institution, shall remain

19  confidential and exempt from the provisions of s. 119.07(1).

20  

21  Any confidential information or records obtained from the

22  office department pursuant to this paragraph shall be

23  maintained as confidential and exempt from the provisions of

24  s. 119.07(1).

25         (3)  The provisions of this section do not prevent or

26  restrict:

27         (a)  Publishing reports required to be submitted to the

28  office department pursuant to s. 655.045(2)(a) or required by

29  applicable federal statutes or regulations to be published.

30         (b)  Furnishing records or information to any other

31  state, federal, or foreign agency responsible for the

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 1  regulation or supervision of financial institutions, including

 2  Federal Home Loan Banks.

 3         (c)  Furnishing records or information, in the case of

 4  a credit union, to the Florida Credit Union Guaranty

 5  Corporation, Inc.

 6         (d)  Disclosing or publishing summaries of the

 7  condition of financial institutions and general economic and

 8  similar statistics and data, provided that the identity of a

 9  particular financial institution is not disclosed.

10         (e)  Reporting any suspected criminal activity, with

11  supporting documents and information, to appropriate law

12  enforcement and prosecutorial agencies.

13         (f)  Furnishing information upon request to the Chief

14  Financial Officer or the Division of Treasury of the

15  Department of Financial Services State Treasurer regarding the

16  financial condition of any financial institution that is, or

17  has applied to be, designated as a qualified public depository

18  pursuant to chapter 280.

19  

20  Any confidential information or records obtained from the

21  office department pursuant to this subsection shall be

22  maintained as confidential and exempt from the provisions of

23  s. 119.07(1).

24         (4)(a)  Orders of courts or of administrative law

25  judges for the production of confidential records or

26  information shall provide for inspection in camera by the

27  court or the administrative law judge and, after the court or

28  administrative law judge has made a determination that the

29  documents requested are relevant or would likely lead to the

30  discovery of admissible evidence, said documents shall be

31  subject to further orders by the court or the administrative

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 1  law judge to protect the confidentiality thereof.  Any order

 2  directing the release of information shall be immediately

 3  reviewable, and a petition by the office department for review

 4  of such order shall automatically stay further proceedings in

 5  the trial court or the administrative hearing until the

 6  disposition of such petition by the reviewing court.  If any

 7  other party files such a petition for review, it will operate

 8  as a stay of such proceedings only upon order of the reviewing

 9  court.

10         (b)  Confidential records and information furnished

11  pursuant to a legislative subpoena shall be kept confidential

12  by the legislative body or committee which received the

13  records or information, except in a case involving

14  investigation of charges against a public official subject to

15  impeachment or removal, and then disclosure of such

16  information shall be only to the extent determined by the

17  legislative body or committee to be necessary.

18         (5)  Every credit union and mutual association shall

19  maintain, in the principal office where its business is

20  transacted, full and correct records of the names and

21  residences of all the members of the credit union or mutual

22  association. Such records shall be subject to the inspection

23  of all the members of the credit union or mutual association,

24  and the officers authorized to assess taxes under state

25  authority, during business hours of each business day.  A

26  current list of members shall be made available to the

27  office's department's examiners for their inspection and, upon

28  the request of the office department, shall be submitted to

29  the office department. Except as otherwise provided in this

30  subsection, the list of the members of the credit union or

31  

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 1  mutual association is confidential and exempt from the

 2  provisions of s. 119.07(1).

 3         (6)  Every bank, trust company, and stock association

 4  shall maintain, in the principal office where its business is

 5  transacted, full and complete records of the names and

 6  residences of all the shareholders of the bank, trust company,

 7  or stock association and the number of shares held by each.

 8  Such records shall be subject to the inspection of all the

 9  shareholders of the bank, trust company, or stock association,

10  and the officers authorized to assess taxes under state

11  authority, during business hours of each banking day. A

12  current list of shareholders shall be made available to the

13  office's department's examiners for their inspection and, upon

14  the request of the office department, shall be submitted to

15  the office department. Except as otherwise provided in this

16  subsection, any portion of this list which reveals the

17  identities of the shareholders is confidential and exempt from

18  the provisions of s. 119.07(1).

19         (7)  Materials supplied to the office department or to

20  employees of any financial institution by other governmental

21  agencies, federal or state, or the Florida Credit Union

22  Guaranty Corporation, Inc., shall remain the property of the

23  submitting agency or the corporation, and any document request

24  must be made to the appropriate agency.  Any confidential

25  documents supplied to the office department or to employees of

26  any financial institution by other governmental agencies,

27  federal or state, or by the Florida Credit Union Guaranty

28  Corporation, Inc., shall be confidential and exempt from the

29  provisions of s. 119.07(1).  Such information shall be made

30  public only with the consent of such agency or the

31  corporation.

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 1         (8)  Examination reports, investigatory records,

 2  applications, and related information compiled by the office

 3  department, or photographic copies thereof, shall be retained

 4  by the office department for a period of at least 10 years.

 5         (9)  A copy of any document on file with the office

 6  department which is certified by the office department as

 7  being a true copy may be introduced in evidence as if it were

 8  the original. The commission department shall establish a

 9  schedule of fees for preparing true copies of documents.

10         (10)  Any person who willfully discloses information

11  made confidential by this section is guilty of a felony of the

12  third degree, punishable as provided in s. 775.082, s.

13  775.083, or s. 775.084.

14         Section 1729.  Subsection (1) of section 655.059,

15  Florida Statutes, is amended to read:

16         655.059  Access to books and records; confidentiality;

17  penalty for disclosure.--

18         (1)  The books and records of a financial institution

19  are confidential and shall be made available for inspection

20  and examination only:

21         (a)  To the office department or its duly authorized

22  representative;

23         (b)  To any person duly authorized to act for the

24  financial institution;

25         (c)  To any federal or state instrumentality or agency

26  authorized to inspect or examine the books and records of an

27  insured financial institution;

28         (d)  With respect to an international banking

29  corporation, to the home-country supervisor of the

30  corporation, provided:

31  

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 1         1.  The supervisor provides advance notice to the

 2  office department that the supervisor intends to examine the

 3  Florida office of the corporation.

 4         2.  The supervisor confirms to the office department

 5  that the purpose of the examination is to ensure the safety

 6  and soundness of the corporation.

 7         3.  The books and records pertaining to customer

 8  deposit, investment, and custodial accounts are not disclosed

 9  to the supervisor.

10         4.  At any time during the conduct of the examination,

11  the office department reserves the right to have an examiner

12  present or to participate jointly in the examination.

13  

14  For purposes of this paragraph, "home-country supervisor"

15  means the governmental entity in the corporation's home

16  country with responsibility for the supervision and regulation

17  of the corporation;.

18         (e)  As compelled by a court of competent jurisdiction;

19         (f)  As compelled by legislative subpoena as provided

20  by law, in which case the provisions of s. 655.057 apply;

21         (g)  Pursuant to a subpoena, to any federal or state

22  law enforcement or prosecutorial instrumentality authorized to

23  investigate suspected criminal activity;

24         (h)  As authorized by the board of directors of the

25  financial institution; or

26         (i)  As provided in subsection (2).

27         Section 1730.  Section 655.061, Florida Statutes, is

28  amended to read:

29         655.061  Competitive equality with federally organized

30  or chartered financial institutions.--Subject to the prior

31  approval of the office department pursuant to commission rule

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 1  or office order of general application, state financial

 2  institutions subject to the financial institutions codes may

 3  make any loan or investment or exercise any power which they

 4  could make or exercise if incorporated or operating in this

 5  state as a federally chartered or regulated financial

 6  institution of the same type and are entitled to all

 7  privileges and protections granted federally chartered or

 8  regulated financial institutions of the same type under

 9  federal statutes and regulations.  The provisions of this

10  section take precedence over, and must be given effect over,

11  any other general or specific provisions of the financial

12  institutions codes to the contrary.  In issuing an order or

13  rule under this section, the office or commission department

14  shall consider the importance of maintaining a competitive

15  dual system of financial institutions and whether such an

16  order or rule is in the public interest.

17         Section 1731.  Section 655.071, Florida Statutes, is

18  amended to read:

19         655.071  International banking facilities; definitions;

20  notice before establishment.--

21         (1)  "International banking facility" means a set of

22  asset and liability accounts segregated on the books and

23  records of a banking organization, as that term is defined in

24  s. 199.023, that includes only international banking facility

25  deposits, borrowings, and extensions of credit, as those terms

26  shall be defined by the commission department pursuant to

27  subsection (2).

28         (2)  The commission department shall by rule define the

29  terms "deposit," "borrowing," and "extension of credit" as

30  they relate to the activities of international banking

31  facilities. These definitions shall take into account all

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 1  transactions in which international banking facilities are

 2  permitted to engage by regulations of the Board of Governors

 3  of the Federal Reserve System, as from time to time amended.

 4  When adopting promulgating such rules, the commission

 5  department shall also consider the public interest, including

 6  the need to maintain a sound and competitive banking system,

 7  as well as the purpose of this act, which is to create an

 8  environment conducive to the conduct of an international

 9  banking business in the state.

10         (3)  Before establishing an international banking

11  facility, a state-chartered or state-licensed banking

12  organization shall notify the office department in the manner

13  prescribed by rule of the commission department.

14         Section 1732.  Subsections (1) and (2) of section

15  655.411, Florida Statutes, are amended to read:

16         655.411  Conversion of charter.--

17         (1)  Any financial entity may apply to the office

18  department for permission to convert its charter without a

19  change of business form or convert its charter in order to do

20  business as another type of financial entity in accordance

21  with the following procedures:

22         (a)  The board of directors must approve a plan of

23  conversion by a vote of a majority of all the directors.  The

24  plan must include a statement of:

25         1.  The type of financial entity which would result if

26  the application were approved and the proposed name under

27  which it would do business.

28         2.  The method and schedule for terminating any

29  activities and disposing of any assets or liabilities which

30  would not conform to the requirements applicable to the

31  resulting financial entity.

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 1         3.  The competitive impact of such change, including

 2  any effect on the availability of particular financial

 3  services in the market area served by the financial entity.

 4         4.  Such financial data as may be required to determine

 5  compliance with the capital, reserve, and liquidity

 6  requirements applicable to the resulting financial entity.

 7         5.  Such other information as the commission department

 8  may by rule require.

 9         (b)  Following approval by the board of directors, the

10  conversion plan, together with a certified copy of the

11  authorizing resolution adopted by the board, must be submitted

12  to the office department for approval before being submitted

13  to the members or stockholders of the financial entity.  The

14  application for conversion must be in the such form prescribed

15  by the commission, and contain such additional information as

16  the commission or office department reasonably requires, and

17  must be accompanied by a filing fee in accordance with s.

18  657.066(4) or s. 658.73.  Additionally, the office department

19  is authorized to assess any financial entity, applying to

20  convert pursuant to this section, a nonrefundable examination

21  fee to cover the actual costs of any examination required as a

22  part of the application process.

23         (c)  The office department shall approve the plan if it

24  finds that:

25         1.  The resulting financial entity would have an

26  adequate capital structure with regard to its activities and

27  its deposit liabilities.

28         2.  The proposed conversion would not cause a

29  substantially adverse effect on the financial condition of any

30  financial entity already established in the primary service

31  area.

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 1         3.  The officers and directors have sufficient

 2  experience, ability, and standing to indicate reasonable

 3  promise for successful operation of the resulting financial

 4  entity.

 5         4.  The schedule for termination of any nonconforming

 6  activities and disposition of any nonconforming assets and

 7  liabilities is reasonably prompt, and the plan for such

 8  termination and disposition does not include any unsafe or

 9  unsound practice.

10         5.  None of the officers or directors has been

11  convicted of, or pled guilty or nolo contendere to, a

12  violation of s. 655.50, relating to the Florida Control of

13  Money Laundering in Financial Institutions Act; chapter 896,

14  relating to offenses related to financial transactions; or any

15  similar state or federal law.

16  

17  If the office department disapproves the plan, it shall state

18  its objections and give an opportunity to the parties to amend

19  the plan to overcome such objections.  The office department

20  may deny an application by any financial entity which is

21  subject to a cease and desist order or other supervisory

22  restriction or order imposed by any state or federal

23  supervisory authority, insurer, or guarantor.

24         (d)  If the office department approves the plan, it may

25  be submitted to the members or stockholders at an annual

26  meeting or at any special meeting called to consider such

27  action. Upon a favorable vote of a majority of the total

28  number of votes eligible to be cast or, in the case of a

29  credit union, a majority of the members present at the

30  meeting, the plan is adopted. Copies of the minutes of the

31  proceedings of such meeting of the members or stockholders,

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 1  verified by the affidavit of an officer, as established in the

 2  bylaws of the financial institution, must be filed with the

 3  office department within 10 days after such meeting.  Such

 4  verified copies of the proceedings of such meeting are

 5  presumptive evidence of the holding and action of such

 6  meeting.  If the members or stockholders approve the plan of

 7  conversion, the directors shall then execute new articles of

 8  incorporation or amendments to existing articles and two

 9  copies of the new bylaws. The directors shall insert in the

10  articles of incorporation the following: "This ...(bank,

11  association, etc.)... is incorporated by conversion from a

12  ...(national bank, state association, etc.)...."

13         (e)  If the members or stockholders adopt the plan of

14  conversion, the financial entity shall apply to the

15  appropriate insurer for a commitment for insurance of accounts

16  for the shares and deposits of the resulting financial entity.

17         (f)  The plan shall not take effect until the office

18  department has received notice that the commitment for

19  insurance of accounts has been given by the insurer.  Upon

20  receipt of such notice, the office department shall issue a

21  new charter to the financial entity authorizing it to transact

22  business pursuant to applicable law.

23         (2)  The commission department may provide by rule for

24  any additional procedures to be followed by any national or

25  federal financial entity seeking to convert its charter

26  pursuant to this section.

27         Section 1733.  Subsection (1) of section 655.412,

28  Florida Statutes, is amended to read:

29         655.412  Merger and consolidation.--

30         (1)  With the approval of the office department, any

31  capital stock financial institution may be merged into or

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 1  consolidated with another capital stock financial institution

 2  or a mutual financial institution.  The provisions of ss.

 3  658.41-658.45 govern any merger or consolidation pursuant to

 4  this subsection; and, for this purpose, references therein to

 5  banks and trust companies are deemed to refer to capital stock

 6  financial institutions.

 7         Section 1734.  Section 655.414, Florida Statutes. is

 8  amended to read:

 9         655.414  Acquisition of assets; assumption of

10  liabilities.--With prior approval of the office department and

11  upon such conditions as the commission department prescribes

12  by rule, any financial entity may acquire all or substantially

13  all of the assets of, or assume the liabilities of, any other

14  financial entity in accordance with the procedures and subject

15  to the following conditions and limitations:

16         (1)  ADOPTION OF A PLAN.--The board of directors of the

17  acquiring or assuming financial entity and the board of

18  directors of the transferring financial entity must adopt, by

19  a majority vote, a plan for such acquisition, assumption, or

20  sale on such terms as are mutually agreed upon. The plan must

21  include:

22         (a)  The names and types of financial entities

23  involved.

24         (b)  A statement setting forth the material terms of

25  the proposed acquisition, assumption, or sale, including the

26  plan for disposition of all assets and liabilities not subject

27  to the plan.

28         (c)  A provision for liquidation of the transferring

29  financial entity upon execution of the plan.

30         (d)  A statement that the entire transaction is subject

31  to written approval of the office department and approval of

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 1  the members or stockholders of the transferring financial

 2  entity.

 3         (e)  If a stock financial institution is the

 4  transferring financial entity and the proposed sale is not to

 5  be for cash, a clear and concise statement that dissenting

 6  stockholders of such financial entity are entitled to the

 7  rights set forth in s. 658.44(4) and (5).

 8         (f)  The proposed effective date of such acquisition,

 9  assumption, or sale and such other information and provisions

10  as may be necessary to execute the transaction or as may be

11  required by the office department.

12         (2)  APPROVAL OF OFFICE DEPARTMENT.--Following approval

13  by the board of directors of each participating financial

14  entity, the plan, together with certified copies of the

15  authorizing resolutions adopted by the boards and a completed

16  application with a nonrefundable filing fee, must be forwarded

17  to the office department for its approval or disapproval.  The

18  office department shall approve the plan of acquisition,

19  assumption, or sale if it appears that:

20         (a)  The resulting financial entity would have an

21  adequate capital structure in relation to its activities and

22  its deposit liabilities;

23         (b)  The plan is fair to all parties; and

24         (c)  The plan is not contrary to the public interest.

25  

26  If the office department disapproves the plan, it shall state

27  its objections and give an opportunity to the parties to amend

28  the plan to overcome such objections.

29         (3)  VOTE OF MEMBERS OR STOCKHOLDERS.--If the office

30  department approves the plan, it may be submitted to the

31  members or stockholders of the transferring financial entity

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 1  at an annual meeting or at any special meeting called to

 2  consider such action. Upon a favorable vote of 51 percent or

 3  more of the total number of votes eligible to be cast or, in

 4  the case of a credit union, 51 percent or more of the members

 5  present at the meeting, the plan is adopted.

 6         (4)  ADOPTED PLAN; CERTIFICATE; ABANDONMENT.--

 7         (a)  If the plan is adopted by the members or

 8  stockholders of the transferring financial entity, the

 9  president or vice president and the cashier, manager, or

10  corporate secretary of such financial entity shall submit the

11  adopted plan to the office department, together with a

12  certified copy of the resolution of the members or

13  stockholders approving it.

14         (b)  Upon receipt of the certified copies and evidence

15  that the participating financial entities have complied with

16  all applicable federal law and regulations, the office

17  department shall certify, in writing, to the participants that

18  the plan has been approved.

19         (c)  Notwithstanding approval of the members or

20  stockholders or certification by the office department, the

21  board of directors of the transferring financial entity may,

22  in its discretion, abandon such a transaction without further

23  action or approval by the members or stockholders, subject to

24  the rights of third parties under any contracts relating

25  thereto.

26         (5)  FEDERALLY CHARTERED INSTITUTION AS A

27  PARTICIPANT.--If one of the participants in a transaction

28  under this section is a federally chartered financial entity,

29  all participants must also comply with such requirements as

30  may be imposed by federal law for such an acquisition,

31  assumption, or sale and provide evidence of such compliance to

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 1  the office department as a condition precedent to the issuance

 2  of a certificate authorizing the transaction; however, if the

 3  purchasing or assuming financial entity is a federally

 4  chartered financial entity, approval of the office department

 5  is not required.

 6         (6)  STOCK INSTITUTION ACQUIRING MUTUAL INSTITUTION.--A

 7  mutual financial institution may not sell all or substantially

 8  all of its assets to a stock financial entity until it has

 9  first converted into a capital stock financial institution in

10  accordance with s. 665.033(1) and (2). For this purpose,

11  references in s. 665.033(1) and (2) to associations are deemed

12  to refer also to credit unions; but, in the case of a credit

13  union, the provision therein concerning proxy statements does

14  not apply.

15         Section 1735.  Section 655.416, Florida Statutes, is

16  amended to read:

17         655.416  Book value of assets.--Upon the effective date

18  of a merger, consolidation, conversion, or acquisition

19  pursuant to ss. 655.41-655.419, an asset may not be carried on

20  the books of the resulting financial entity at a valuation

21  higher than that at which it was carried on the books of a

22  participating or converting financial entity at the time of

23  its last examination by a state or federal examiner before the

24  effective date of such merger, consolidation, conversion, or

25  acquisition, without written approval from the office

26  department.

27         Section 1736.  Subsections (3) and (4) of section

28  655.418, Florida Statutes, are amended to read:

29         655.418  Nonconforming activities; cessation.--If, as a

30  result of a merger, consolidation, conversion, or acquisition

31  pursuant to ss. 655.41-655.419, the resulting financial entity

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 1  is to be of a different type or of a different character than

 2  any one or all of the participating or converting financial

 3  entities, such resulting financial entity will be subject to

 4  the following conditions and limitations:

 5         (3)  COMPLIANCE WITH LENDING AND INVESTMENT

 6  LIMITATIONS.--If, as a result of such merger, consolidation,

 7  conversion, or acquisition, the resulting financial entity

 8  will exceed any lending, investment, or other limitations

 9  imposed by law, the financial entity shall conform to such

10  limitations within such period of time as is established by

11  the office department.

12         (4)  DIVESTITURE.--The office department may, as a

13  condition to such merger, consolidation, conversion, or

14  acquisition, require a nonconforming activity to be divested

15  in accordance with such additional requirements as it

16  considers appropriate under the circumstances.

17         Section 1737.  Subsection (2), paragraph (f) of

18  subsection (3), paragraph (a) of subsection (4), and

19  subsections (5), (6), (7), (8), and (9) of section 655.50,

20  Florida Statutes, are amended to read:

21         655.50  Florida Control of Money Laundering in

22  Financial Institutions Act; reports of transactions involving

23  currency or monetary instruments; when required; purpose;

24  definitions; penalties.--

25         (2)  It is the purpose of this section to require

26  submission to the office department of certain reports and

27  maintenance of certain records of transactions involving

28  currency or monetary instruments when such reports and records

29  deter the use of financial institutions to conceal the

30  proceeds of criminal activity and have a high degree of

31  

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 1  usefulness in criminal, tax, or regulatory investigations or

 2  proceedings.

 3         (3)  As used in this section, the term:

 4         (f)  "Report" means a report of each deposit,

 5  withdrawal, exchange of currency, or other payments or

 6  transfer, by, through, or to that financial institution, that

 7  involves a transaction required or authorized to be reported

 8  by this section, and includes the electronic submission of

 9  such information in the manner provided for by rule of the

10  commission department.

11         (4)(a)  Every financial institution shall keep a record

12  of each financial transaction occurring in this state known to

13  it to involve currency or other monetary instrument, as the

14  commission department prescribes by rule, of a value in excess

15  of $10,000, to involve the proceeds of specified unlawful

16  activity, or to be designed to evade the reporting

17  requirements of this section, chapter 896, or any similar

18  state or federal law and shall maintain appropriate procedures

19  to ensure compliance with this section, chapter 896, and any

20  other similar state or federal law.

21         (5)(a)  Each financial institution shall file a report

22  with the office department of the record required under

23  paragraphs (4)(a) and (b) and any record maintained pursuant

24  to paragraph (4)(c).  Each record filed pursuant to subsection

25  (4) must be filed at such time and contain such information as

26  the commission department requires by rule.

27         (b)  The timely filing of the report required by 31

28  U.S.C. s. 5313 with the appropriate federal agency is deemed

29  compliance with the reporting requirements of this subsection

30  unless the reports are not regularly and comprehensively

31  transmitted by the federal agency to the office department.

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 1         (6)  Each financial institution shall maintain a record

 2  of each designation of a person granted exemption under the

 3  authority of 31 U.S.C. s. 5313, including any name, address,

 4  and taxpayer identification number of the exempt person, as

 5  well as the name and address of the financial institution and

 6  the signature of the financial institution official

 7  designating the exempt person. Such record of exemptions shall

 8  be made available to the office department for inspection and

 9  copying and shall be submitted to the office department within

10  15 days after request.

11         (7)  All reports and records filed with the office

12  department pursuant to this section are confidential and

13  exempt from s. 119.07(1).  However, the office department

14  shall provide any report filed pursuant to this section, or

15  information contained therein, to federal, state, and local

16  law enforcement and prosecutorial agencies, and any federal or

17  state agency responsible for the regulation or supervision of

18  financial institutions.

19         (8)(a)  The office department shall retain a copy of

20  all reports received under subsection (4) for a minimum of 5

21  calendar years after receipt of the report. However, if a

22  report or information contained in a report is known by the

23  office department to be the subject of an existing criminal

24  proceeding, the report shall be retained for a minimum of 10

25  calendar years after receipt of the report.

26         (b)  Each financial institution shall maintain for a

27  minimum of 5 calendar years full and complete records of all

28  financial transactions, including all records required by 31

29  C.F.R. parts 103.33 and 103.34.

30         (c)  The financial institution shall retain a copy of

31  all reports filed with the office department under subsection

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 1  (4) for a minimum of 5 calendar years after submission of the

 2  report. However, if a report or information contained in a

 3  report is known by the financial institution to be the subject

 4  of an existing criminal proceeding, the report shall be

 5  retained for a minimum of 10 calendar years after submission

 6  of the report.

 7         (d)  The financial institution shall retain a copy of

 8  all records of exemption for each designation of exempt person

 9  made pursuant to subsection (6) for a minimum of 5 calendar

10  years after termination of exempt status of such customer.

11  However, if it is known by the financial institution that the

12  customer or the transactions of the customer are the subject

13  of an existing criminal proceeding, the records shall be

14  retained for a minimum of 10 calendar years after termination

15  of exempt status of such customer.

16         (9)  In addition to any other power conferred upon it

17  to enforce and administer this chapter and the financial

18  institutions codes, the office department may:

19         (a)  Bring an action in any court of competent

20  jurisdiction to enforce or administer this section.  In such

21  action, the office department may seek award of any civil

22  penalty authorized by law and any other appropriate relief at

23  law or equity.

24         (b)  Pursuant to s. 655.033, issue and serve upon a

25  person an order requiring such person to cease and desist and

26  take corrective action whenever the office department finds

27  that such person is violating, has violated, or is about to

28  violate any provision of this section, chapter 896, or any

29  similar state or federal law; any rule or order adopted under

30  this section, chapter 896, or any similar state or federal

31  law; or any written agreement related to this section, chapter

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 1  896, or any similar state or federal law and entered into with

 2  the office department.

 3         (c)  Pursuant to s. 655.037, issue and serve upon any

 4  person an order of removal whenever the office department

 5  finds that such person is violating, has violated, or is about

 6  to violate any provision of this section, chapter 896, or any

 7  similar state or federal law; any rule or order adopted under

 8  this section, chapter 896, or any similar state or federal

 9  law; or any written agreement related to this section, chapter

10  896, or any similar state or federal law and entered into with

11  the office department.

12         (d)  Impose and collect an administrative fine against

13  any person found to have violated any provision of this

14  section, chapter 896, or any similar state or federal law; any

15  rule or order adopted under this section, chapter 896, or any

16  similar state or federal law; or any written agreement related

17  to this section, chapter 896, or any similar state or federal

18  law and entered into with the office department, in an amount

19  not exceeding $10,000 a day for each willful violation or $500

20  a day for each negligent violation.

21         Section 1738.  Section 655.60, Florida Statutes, is

22  amended to read:

23         655.60  Appraisals.--

24         (1)  The office department is authorized to cause to be

25  made appraisals of real estate or other property held by any

26  state financial institution, subsidiary, or service

27  corporation or securing the assets of the state financial

28  institution, subsidiary, or service corporation when specific

29  facts or information with respect to real estate or other

30  property held, secured loans, or lending, or when in its

31  opinion the state financial institution's policies, practices,

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 1  operating results, and trends give evidence that the state

 2  financial institution's appraisals or evaluations of ability

 3  to make payments may be excessive, that lending or investment

 4  may be of a marginal nature, that appraisal policies and loan

 5  practices may not conform with generally accepted and

 6  established professional standards, or that real estate or

 7  other property held by the state financial institution,

 8  subsidiary, or service corporation or assets secured by real

 9  estate or other property are overvalued.  In lieu of causing

10  such appraisals to be made, the office department may accept

11  any appraisal caused to be made by an appropriate state or

12  federal regulatory agency or other insuring agency or

13  corporation of a state financial institution.  Unless

14  otherwise ordered by the office department, an appraisal of

15  real estate or other property pursuant to this section must be

16  made by a licensed or certified appraiser or appraisers

17  selected by the office department, and the cost of such

18  appraisal shall be paid promptly by such state financial

19  institution, subsidiary, or service corporation directly to

20  such appraiser or appraisers upon receipt by the state

21  financial institution of a statement of such cost bearing the

22  written approval of the office department.  A copy of the

23  report of each appraisal caused to be made by the office

24  department pursuant to this section shall be furnished to the

25  state financial institution, subsidiary, or service

26  corporation within a reasonable time, not exceeding 60 days,

27  following the completion of such appraisal and may be

28  furnished to the insuring agency or corporation or federal or

29  state regulatory agency.

30         (2)  A state financial institution may not make loans

31  based on the security of real estate unless appraisal

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 1  standards and policies have been previously established by the

 2  board of directors.  Such standards must be in written form

 3  and include, without limitation, information required by rules

 4  of the commission department.

 5         (3)  If any appraisal required pursuant to this section

 6  discloses that any asset of a state financial institution,

 7  subsidiary, or service corporation is overvalued on its books,

 8  the office department may require the state financial

 9  institution, subsidiary, or service corporation to charge off

10  such asset or portion thereof pursuant to s. 655.044.

11         Section 1739.  Section 655.762, Florida Statutes, is

12  amended to read:

13         655.762  Sale of assets.--A state financial institution

14  may sell any asset in the ordinary course of business or with

15  the approval of the office department in any other

16  circumstances.

17         Section 1740.  Subsection (6) of section 655.89,

18  Florida Statutes, is amended to read:

19         655.89  Legal holidays; business days; business and

20  transactions.--

21         (6)  With prior written approval of the office

22  department, an institution may designate another day or other

23  days on which the institution may be closed and which day or

24  days will not be considered business days.

25         Section 1741.  Paragraph (a) of subsection (1) of

26  section 655.90, Florida Statutes, is amended to read:

27         655.90  Closing during emergencies and other special

28  days.--

29         (1)  DEFINITIONS.--As used in this section, the term:

30         (a)  "Commissioner" means the director of the Office of

31  Financial Institutions and Securities Regulation officer of

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 1  this state designated by law as the head of the Department of

 2  Banking and Finance and any other person lawfully exercising

 3  such powers, whether as a deputy to such officer, as a

 4  director, bureau chief, or financial administrator of or

 5  within such department, or otherwise.

 6         Section 1742.  Subsection (3) of section 655.922,

 7  Florida Statutes, is amended to read:

 8         655.922  Banking business by unauthorized persons; use

 9  of name.--

10         (3)  Any court, in a proceeding brought by the office

11  department, by any financial institution the principal place

12  of business of which is in this state, or by any other person

13  residing, or whose principal place of business is located, in

14  this state and whose interests are substantially affected

15  thereby, may enjoin any person from violating any of the

16  provisions of this section.  For the purposes of this

17  subsection, the interests of a trade organization or

18  association are deemed to be substantially affected if the

19  interests of any of its members are so affected. In addition,

20  the office department may issue and serve upon any person who

21  violates any of the provisions of this section a complaint

22  seeking a cease and desist order in accordance with the

23  procedures and in the manner prescribed by s. 655.033.

24         Section 1743.  Subsection (1) of section 655.942,

25  Florida Statutes, is amended to read:

26         655.942  Standards of conduct; institutions.--

27         (1)  A financial institution that which is licensed or

28  authorized to do business pursuant to the financial

29  institutions codes, or its officers, directors, or employees

30  may not make or grant any loan or gratuity to any employee of

31  

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 1  the office department who has authority to examine or

 2  otherwise supervise such financial institution.

 3         Section 1744.  Section 655.943, Florida Statutes, is

 4  amended to read:

 5         655.943  Applications; verification.--All information

 6  required by the financial institutions codes or rule of the

 7  commission department to be furnished in conjunction with

 8  applications to form, acquire or acquire assets of, merge, or

 9  change control of a financial institution must be verified by

10  the office department by all reasonable means available.  The

11  office department shall conduct a detailed review of all

12  financial information provided by an applicant, including a

13  review of assets totaling 5 percent or more of the applicant's

14  net worth.

15         Section 1745.  Subsection (1), paragraph (b) of

16  subsection (2), and paragraph (a) of subsection (4) of section

17  655.948, Florida Statutes, are amended to read:

18         655.948  Significant events; notice required.--

19         (1)  Unless exempted by the office department pursuant

20  to subsection (4), every financial institution shall notify

21  the office department of the occurrence of any of the events

22  listed in subsection (2) by filing with the office department

23  a disclosure in a form to be specified by the commission

24  department. The form shall include the number and caption of

25  all applicable events, along with a summary of each. Completed

26  forms shall be certified for authenticity and accuracy by the

27  chief executive officer of the financial institution.

28         (2)  Events for which disclosure forms must be filed

29  and the filing schedule for each are as follows:

30         (b)  Every financial institution shall notify the

31  office department within 30 days of the existence of any asset

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 1  which is defined as a nonaccrual asset and which is in excess

 2  of 15 percent of total assets.

 3         (4)(a)  The office department must exempt a financial

 4  institution from any of the provisions of this section if the

 5  office department determines that such financial institution

 6  is operating in a safe and sound manner pursuant to commission

 7  departmental rules relating to safe and sound operations. The

 8  commission department, prior to granting any such exemption,

 9  shall adopt rules defining the term "safe and sound" and

10  explicitly stating the criteria which shall constitute

11  operating in a safe and sound manner.

12         Section 1746.  Section 655.949, Florida Statutes, is

13  amended to read:

14         655.949  Department Personnel; qualifications.--Before

15  January 1, 1993, The office department shall establish and

16  publish educational, professional, and other appropriate

17  qualifications for each position in the office department and

18  the Office of the Comptroller authorized to participate in the

19  regulation of financial institutions, including positions with

20  the authority to overrule the actions or decisions of

21  professional examiners or legal staff in their exercise of

22  their duties under the financial institutions codes excepting

23  the position of assistant comptroller. Such qualifications

24  shall contain at a minimum sufficient experience and expertise

25  in the regulation of financial institutions as to clearly

26  justify the exercise of authority to overrule the actions or

27  decisions of professional examiners or legal staff.

28         Section 1747.  Section 655.963, Florida Statutes, is

29  amended to read:

30         655.963  Access devices.--Customers receiving access

31  devices shall be furnished by the respective issuers thereof

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 1  with such information regarding safety precautions as the

 2  commission department may require by rule. This information

 3  shall be furnished by personally delivering or mailing the

 4  information to each customer whose mailing address as to the

 5  account to which the access device relates is in this state.

 6  Such information shall be furnished with respect to access

 7  devices issued on or after October 1, 1994, at or before the

 8  time the customer is furnished with his or her access device.

 9  With respect to a customer to whom an "accepted access

10  device," as defined in Federal Reserve Board Regulation E, 12

11  C.F.R. part 205, has been issued prior to October 1, 1994, the

12  information shall be delivered on or before 6 months from

13  October 1, 1994. Only one notice need be furnished per

14  household, and if access devices are furnished to more than

15  one customer for a single account or set of accounts or on the

16  basis of a single application or other request for access

17  devices, only a single notice need be furnished in

18  satisfaction of the notification responsibilities as to those

19  customers. The information may be included with other

20  disclosures related to the access device furnished to the

21  customer, such as with any initial or periodic disclosure

22  statement furnished pursuant to the Electronic Fund Transfer

23  Act.

24         Section 1748.  Section 657.002, Florida Statutes, is

25  amended to read:

26         657.002  Definitions.--As used in this part:

27         (1)  "Capital" means shares, deposits, and equity.

28         (2)  "Central credit union" means a credit union the

29  membership of which includes, but is not limited to, other

30  credit unions, members of credit unions, credit union

31  

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 1  employees, employees of organizations serving credit unions,

 2  and the families of such members.

 3         (3)  "Corporate credit union" means any central credit

 4  union organized pursuant to any state or federal act for the

 5  purpose of serving other credit unions.

 6         (4)  "The corporation" means the Florida Credit Union

 7  Guaranty Corporation, Inc.

 8         (5)  "Correspondent" means that person designated on an

 9  application to organize a credit union as the person to whom

10  all correspondence regarding the application should be sent.

11         (6)  "Credit union" means any cooperative society

12  organized pursuant to this part.

13         (7)  "Department" means the Department of Banking and

14  Finance.

15         (7)(8)  "Deposits" means that portion of the capital

16  paid into the credit union by members on which a contractual

17  rate of interest will be paid.

18         (8)(9)  "Equity" means undivided earnings, reserves,

19  and allowance for loan losses.

20         (9)(10)  "Foreign credit union" means a credit union

21  organized and operating under the laws of another state.

22         (10)(11)  "Immediate family" means parents, children,

23  spouse, or surviving spouse of the member, or any other

24  relative by blood, marriage, or adoption.

25         (11)(12)  "Limited field of membership" means the

26  defined group of persons designated as eligible for membership

27  in the credit union who:

28         (a)  Have a similar profession, occupation, or formal

29  association with an identifiable purpose; or

30         (b)  Reside within an identifiable neighborhood,

31  community, rural district, or county; or

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 1         (c)  Are employed by a common employer; or

 2         (d)  Are employed by the credit union; and

 3  

 4  members of the immediate family of persons within such group.

 5         (12)(13)  "Shares" means that portion of the capital

 6  paid into the credit union by members on which dividends may

 7  be paid.

 8         (13)(14)  "Unimpaired capital" means capital which is

 9  not impaired by losses that exceed applicable reserves.

10         Section 1749.  Section 657.005, Florida Statutes, is

11  amended to read:

12         657.005  Notice of intent to organize; investigation by

13  department; application for authority to organize a credit

14  union.--

15         (1)  The proposed organizers of the proposed credit

16  union shall file with the office department a notice of intent

17  to organize, upon such form as the commission department may,

18  by rule, prescribe.

19         (2)  Any five or more residents of this state who

20  represent a limited field of membership may apply to the

21  office department for permission to organize a credit union.

22  The fact that individuals within the proposed limited field of

23  membership have credit union services available to them

24  through another limited field of membership shall not preclude

25  the granting of a certificate of authorization to engage in

26  the business of a credit union.

27         (3)  The application shall be submitted to the office

28  department on forms and in the manner prescribed by rules

29  adopted by the commission department and shall be accompanied

30  by a nonrefundable filing fee of $250.  Such application shall

31  include:

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 1         (a)  The proposed name and the proposed location where

 2  the proposed credit union is to have its principal place of

 3  business.

 4         (b)  Designation of the par value of each share of the

 5  credit union.

 6         (c)  Designation of at least five persons who agree to

 7  serve on the board of directors, and at least three other

 8  persons who agree to serve on the supervisory committee or

 9  audit committee, with a signed agreement to serve in these

10  capacities until the first annual meeting or until the

11  election of their successors, whichever is later, executed by

12  those who so agree.

13         (d)  Any information required by the commission or

14  office department to be submitted to the corporation or

15  insuring agency.

16         (e)  Bylaws of the credit union, which bylaws shall be

17  in the form and substance as required by the commission

18  department.

19         (4)  The office department shall have the power of

20  investigation to the extent necessary to make the finding

21  required under this section.

22         (5)  The application shall be approved if the office

23  department determines that:

24         (a)  There is a showing of sufficient interest on the

25  part of the proposed limited field of membership;

26         (b)  The qualifications of the proposed board of

27  directors and committee members are such as to indicate a

28  reasonable likelihood that the affairs of the proposed credit

29  union will be administered consistently with sound financial

30  and credit union practices;

31  

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 1         (c)  The organization of the credit union would benefit

 2  its members; and

 3         (d)  The limited field of membership is of sufficient

 4  financial viability to indicate reasonable promise of

 5  successful operation of the proposed credit union.  In

 6  determining the financial viability of the proposed limited

 7  field of membership and chances for reasonable promise of

 8  success of the proposed credit union, the office department

 9  shall consider:

10         1.  The size of the proposed limited field of

11  membership, excluding potential members based upon familial

12  relationships; and

13         2.  Any other evidence that tends to indicate the

14  reasonable promise of success of the proposed credit union.

15         (6)  If the organization of a proposed credit union

16  would result in an overlapping limited field of membership,

17  the office department may disapprove the application if it

18  finds that the formation of the proposed credit union will

19  result in a substantial, adverse financial impact to an

20  existing credit union having the same or substantially the

21  same limited field of membership.

22         (7)  Concurrently with submission of the application to

23  the office department, the applicant shall apply for insurance

24  of accounts with the National Credit Union Administration.

25         (8)  The applicant shall not accept any payments for

26  credit to share or deposit accounts, or commence business

27  operations as a credit union, until the certificate of

28  authorization and the insurance certificate have been

29  delivered to the credit union.

30         (9)  The office department shall perform a preopening

31  examination to verify good faith compliance with all the

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 1  requirements of law.  If the office department finds that such

 2  requirements have been met, it shall issue and deliver the

 3  certificate of authorization to transact business.  Any credit

 4  union which fails to open for business within 6 months after

 5  the issuance of such certificate will forfeit its existence as

 6  a credit union, and the certificate of authorization shall be

 7  revoked.  For good cause shown, the office department may

 8  extend the opening date for an additional 6 months on its own

 9  motion or at the request of the credit union.  Amounts

10  credited on share accounts, less expenditures authorized by

11  law, shall be returned pro rata to the respective account

12  holders.

13         (10)  All preopening costs and expenses in connection

14  with the organization of the credit union and preparation for

15  opening for business may be paid only from funds provided by

16  the organizers or a sponsor and may be reimbursed by the

17  credit union only out of undivided earnings, after provision

18  has been made for reserves and dividends.  However, the credit

19  union may reimburse, as an operating expense, for forms and

20  supplies, insurance, rent, and other expenses applicable to or

21  consumed in the period after opening in accordance with rules

22  adopted by the commission department.

23         (11)  The commission shall adopt and the office

24  department shall provide a form certificate of authorization

25  and bylaws consistent with this chapter which shall be used by

26  applicants for credit unions.

27         Section 1750.  Section 657.0061, Florida Statutes, is

28  amended to read:

29         657.0061  Amendments to bylaws.--

30         (1)  All bylaw amendments must be submitted to the

31  office department.  The office department shall approve or

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 1  disapprove bylaw amendments within 60 days after receipt.  The

 2  office department shall approve the proposed bylaw amendment

 3  unless it finds that the amendment:

 4         (a)  Is not in the best interest of the membership;

 5         (b)  Is not in accord with sound credit union

 6  practices; or

 7         (c)  Exposes the assets of the credit union to

 8  unnecessary risks.

 9         (2)  The commission department may, by rule, allow

10  certain bylaw amendments that are ministerial in nature to

11  become effective immediately upon filing with the office

12  department.

13         Section 1751.  Paragraph (a) of subsection (2) and

14  subsections (5) and (6) of section 657.008, Florida Statutes,

15  are amended to read:

16         657.008  Place of doing business.--

17         (2)(a)  With 30 days' days prior written notification

18  to the office department, a credit union may maintain branches

19  at locations other than its main office or relocate branches

20  previously established if the maintenance of such branches is

21  determined by the board of directors to be reasonably

22  necessary to furnish service to its members.

23         (5)  A credit union may change its principal place of

24  business within this state upon approval by the office

25  department.

26         (6)(a)  The office department may authorize foreign

27  credit unions to establish branches in Florida if all of the

28  following criteria are met:

29         1.  The state in which the foreign credit union's home

30  office is located permits Florida credit unions to do business

31  in the state under restrictions that are no greater than those

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 1  placed upon a domestic credit union doing business in that

 2  state.  For this purpose, such restrictions shall include, but

 3  are not limited to, any fees, bonds, or other charges levied

 4  on domestic credit unions doing business in that state.

 5         2.  The deposits of such foreign credit union and its

 6  proposed Florida branch will be insured or guaranteed by an

 7  insurer or guarantor acceptable to the office department.

 8  Insurance or guarantee of accounts comparable to that provided

 9  by the Florida Credit Union Guaranty Corporation is deemed to

10  be acceptable; however, acceptance of insurance or guarantee

11  of accounts by any insuring or guaranteeing agencies or

12  companies shall be subject to a determination by the office

13  department that the insuring or guaranteeing agency or company

14  is in sound financial condition and that its reserves with

15  respect to its insured or guaranteed accounts are no less than

16  those of the Florida Credit Union Guaranty Corporation.

17         3.  The credit union's field of membership is so

18  limited as to be within that meaning of that term as defined

19  in s. 657.002.

20         (b)  Every foreign credit union operating in Florida

21  shall keep the office department informed of every location at

22  which it is operating.

23         (c)  If the office department has reason to believe

24  that a foreign credit union is operating a branch in this

25  state in an unsafe and unsound manner, it shall have the right

26  to examine such branch. If, upon examination, the office

27  department finds that such branch is operating in an unsafe

28  and unsound manner, it shall require the branch office to make

29  appropriate modifications to bring such branch operations into

30  compliance with generally accepted credit union operation in

31  this state. Such foreign credit union shall reimburse the

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 1  office department for the full cost of this examination. Costs

 2  shall include examiner salaries, per diem, and travel

 3  expenses.

 4         (d)  Any foreign credit union operating in this state

 5  shall in any connection therewith be subject to suit in the

 6  courts of this state, by this state and the citizens of this

 7  state.

 8         Section 1752.  Subsection (3) and paragraphs (a) and

 9  (e) of subsection (7) of section 657.021, Florida Statutes,

10  are amended to read:

11         657.021  Board of directors; executive committee.--

12         (3)  Each director, upon assuming office, shall

13  acknowledge that he or she is familiar with his or her

14  responsibilities as a director and that he or she will

15  diligently and honestly administer the affairs of such credit

16  union and will not knowingly violate, or willfully permit to

17  be violated, any of the provisions of the financial

18  institution's codes or pertinent rules of the commission

19  department. The signed copy of such oath shall be filed with

20  the office department within 30 days after election.

21         (7)  The board of directors must exercise the following

22  duties which are nondelegable:

23         (a)  Require any officer or employee who has custody of

24  or handles funds to give bond with good and sufficient surety

25  in an amount and character determined by the board of

26  directors in compliance with rules adopted by the commission

27  department.

28         (e)  Adequately provide for reserves as required by

29  this part or by rules or order of the commission or office

30  department or as otherwise determined necessary by the board.

31  

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 1         Section 1753.  Subsections (3) and (4) of section

 2  657.026, Florida Statutes, are amended to read:

 3         657.026  Supervisory or audit committee.--

 4         (3)  The supervisory or audit committee shall:

 5         (a)  Make or cause to be made a comprehensive annual

 6  audit of the credit union, in accordance with the rules of the

 7  commission department.

 8         (b)  Make or cause to be made such supplementary audits

 9  or examinations as it deems necessary or as are requested by

10  the board of directors or the office department.

11         (c)  Submit a report of every required audit or

12  examination within a reasonable time to the board of directors

13  with a copy to the office department and, depending upon which

14  organization is applicable, a copy to the corporation or the

15  National Credit Union Administration.

16         (d)  Make a summary report, to the membership at the

17  annual meeting, of any audits or examinations conducted during

18  the preceding year.

19         (4)  The supervisory or audit committee shall notify

20  the board of directors, the office department, and, as

21  applicable, either the corporation or the National Credit

22  Union Administration of any violation of this part, any

23  violation of the certificate of authorization or bylaws of the

24  credit union, or any practice of the credit union deemed by

25  the supervisory or audit committee to be unsafe, unsound, or

26  unauthorized.

27  

28  For the purposes of this subsection, two-thirds of the members

29  of the supervisory or audit committee constitutes a quorum.

30         Section 1754.  Subsections (3) and (6) of section

31  657.028, Florida Statutes, are amended to read:

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 1         657.028  Activities of directors, officers, committee

 2  members, employees, and agents.--

 3         (3)  A person may not serve as an officer, director, or

 4  committee member of a credit union if she or he:

 5         (a)  Has been convicted of a felony or of an offense

 6  involving dishonesty, a breach of trust, a violation of this

 7  chapter, or fraud, except with the prior approval of the

 8  office department upon a showing of rehabilitation;

 9         (b)  Has been adjudicated bankrupt within the previous

10  7 years;

11         (c)  Has been removed by any regulatory agency as a

12  director, officer, committee member, or employee of any

13  financial institution, except with the prior approval of the

14  office department upon a showing of rehabilitation and upon

15  showing of ability to be bondable;

16         (d)  Has performed acts of fraud or dishonesty, or has

17  failed to perform duties, resulting in a loss which was

18  subject to a paid claim under a fidelity bond, except with the

19  prior approval of the office department upon a showing of

20  rehabilitation and upon showing of ability to be bondable; or

21         (e)  Has been found guilty of a violation of s. 655.50,

22  relating to the Florida Control of Money Laundering in

23  Financial Institutions Act; chapter 896, relating to offenses

24  related to financial transactions; or any similar state or

25  federal law.

26         (6)  Within 30 days after election or appointment, a

27  record of the names and addresses of the members of the board,

28  members of committees, and all officers of the credit union

29  shall be filed with the office department on forms prescribed

30  by the commission department.

31  

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 1         Section 1755.  Subsections (19), (26), (27), and (29)

 2  of section 657.031, Florida Statutes, are amended to read:

 3         657.031  Powers.--A credit union shall have the power

 4  to:

 5         (19)  Perform tasks and render any services requested

 6  by the Federal Government or by this state or any agency,

 7  political subdivision, or municipality thereof, if approved by

 8  the office department.

 9         (26)  Participate in systems which allow the transfer,

10  withdrawal, or deposit of funds of credit unions or credit

11  union members by automated or electronic means and hold

12  membership in entities established to promote and effectuate

13  these systems, provided such participation is not inconsistent

14  with those rules of the commission department adopted to

15  further service to the members and to protect members' funds

16  against unreasonable risks.

17         (27)  Issue credit cards and debit cards to allow

18  members to obtain access to their shares, deposits, and

19  extensions of credit, provided such issuance is not

20  inconsistent with the rules of the commission department.  The

21  commission department may, by rule, allow the use of devices

22  similar to credit cards and debit cards to allow members to

23  obtain access to their shares, deposits, and extensions of

24  credit.

25         (29)  Exercise such incidental powers as are necessary

26  or requisite to effectively carry out the purposes for which

27  it is organized, provided such exercise is approved by rule or

28  order of the commission or office department.

29         Section 1756.  Subsection (3) of section 657.033,

30  Florida Statutes, is amended to read:

31         657.033  Accounts.--

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 1         (3)  A credit union may receive deposits from its

 2  members and contract to pay interest thereon, subject to

 3  conditions the board of directors establishes and subject to

 4  rules of the commission department.

 5         Section 1757.  Section 657.0335, Florida Statutes, is

 6  amended to read:

 7         657.0335  Additional power to restrict withdrawals.--In

 8  extraordinary circumstances external to the operations of the

 9  credit union which threaten the continued existence and

10  operation of the credit union, the office department may

11  restrict withdrawals for a period not to exceed 60 days.

12         Section 1758.  Subsections (6) and (12) of section

13  657.038, Florida Statutes, are amended to read:

14         657.038  Loan powers.--

15         (6)  Loans secured by mortgages on real property must

16  be made in accordance with written policies of the board of

17  directors and rules of the commission department.

18         (12)  The commission department may adopt rules to

19  provide for minimum documentation and safe lending procedures

20  necessary to protect the members' funds.

21         Section 1759.  Paragraph (i) of subsection (1),

22  paragraph (a) of subsection (2), paragraph (b) of subsection

23  (5), and subsections (6) and (7) of section 657.042, Florida

24  Statutes, are amended to read:

25         657.042  Investment powers and limitations.--A credit

26  union may invest its funds subject to the following

27  definitions, restrictions, and limitations:

28         (1)  INVESTMENTS NOT SUBJECT TO LIMITATIONS.--There is

29  no limitation with respect to the capital of the investing

30  credit union on the following investments:

31  

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 1         (i)  Stock of the Federal National Mortgage

 2  Association, or any other similar entity designated by the

 3  office department, designed to promote investment in

 4  residential mortgages, which may be purchased and retained as

 5  required in connection with mortgage transactions with the

 6  association or entity.

 7         (2)  INVESTMENTS SUBJECT TO LIMITATION OF 25 PERCENT OF

 8  CAPITAL OF THE CREDIT UNION.--Up to 25 percent of the capital

 9  of the credit union may be invested in:

10         (a)  The shares or deposit accounts in any one

11  corporate credit union or other insured financial depository

12  institution. The credit union may exceed the 25-percent

13  investment limitation in the corporate credit union, subject

14  to the prior written approval of the office department.

15         (5)  INVESTMENTS IN REAL ESTATE AND EQUIPMENT FOR THE

16  CREDIT UNION.--

17         (b)  The limitations provided by this subsection may be

18  exceeded with the prior written approval of the office

19  department. The office department shall grant such approval if

20  it is satisfied that:

21         1.  The proposed investment is necessary.

22         2.  The amount thereof is commensurate with the size

23  and needs of the credit union.

24         3.  The investment will be beneficial to the members.

25         (6)  INVESTMENTS SUBJECT TO DEPARTMENT APPROVAL.--A

26  credit union may invest its funds in such other investments,

27  including the capital stock of other financial institutions,

28  as the commission or office department approves by rule or

29  order.

30         (7)  SPECIAL PROVISIONS.--

31  

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 1         (a)  None of the bonds or other obligations described

 2  in this section shall be eligible for investment by credit

 3  unions in any amount unless current as to all payments of

 4  principal and interest and unless rated in one of the four

 5  highest classifications, or, in the case of commercial paper,

 6  unless it is of prime quality and of the highest letter and

 7  numerical rating, as established by a nationally recognized

 8  investment rating service, or any comparable rating as

 9  determined by the office department.

10         (b)  With prior approval of the office department, any

11  investment permitted in this section may also be made

12  indirectly by investment in a trust or mutual, the investments

13  of which are limited as set forth in this section, provided

14  that the credit union must maintain a current file on each

15  investment which contains sufficient information to determine

16  whether the investment complies with the requirements of this

17  section.  If the investment fails to comply with the

18  requirements of this section, the credit union must divest

19  itself of its investment, unless otherwise approved by the

20  office department.

21         Section 1760.  Subsections (1), (2), (3), (5), (6),

22  (7), and (8) of section 657.043, Florida Statutes, are amended

23  to read:

24         657.043  Reserves.--

25         (1)  TRANSFERS TO REGULAR RESERVE.--Immediately before

26  paying each dividend, the total of all income for the period

27  shall be determined.  From this amount, there shall be set

28  aside sums as a regular reserve in accordance with the

29  following schedule:

30         (a)  A credit union shall set aside:

31  

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 1         1.  Five percent of the total of all income for the

 2  period, until the regular reserve equals 6 percent of the risk

 3  assets, then,

 4         2.  Two percent of the total of all income for the

 5  period, until the regular reserve equals 8 percent of the risk

 6  assets.

 7         (b)  Whenever the ratio of regular reserves to risk

 8  assets falls below the stated percent, it shall be replenished

 9  by regular contributions as provided in paragraph (a).

10         (c)  The office department may decrease the reserve

11  requirements set forth in this subsection when in its opinion

12  such a decrease is necessary to preserve the fiscal soundness

13  of the credit union.

14         (2)  ALLOWANCE FOR LOAN LOSSES ACCOUNT.--The credit

15  union shall maintain an account for loan losses.  The amount

16  in the account must equal the board's estimate of losses in

17  the loan portfolio and be consistent with the rules of the

18  commission department.  The account must be provided for,

19  before paying a dividend, in the manner provided by rule. This

20  account constitutes part of the regular reserve for the

21  purpose of determining the ratio of regular reserves to risk

22  assets.

23         (3)  USE OF REGULAR RESERVE.--The regular reserve shall

24  belong to the credit union and shall be used to meet losses.

25  In the event of a decrease, the office department may require

26  additional transfers to the regular reserve above the amount

27  required by subsection (1) until the decrease has been

28  restored. The regular reserve may not be decreased without the

29  prior written approval of the office department or as provided

30  by rule of the commission.

31  

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 1         (5)  ALLOWANCE FOR INVESTMENT LOSSES.--The credit union

 2  may maintain a contra asset account to provide an allowance

 3  for investment losses, which will not be included in the

 4  determination of equity.  The account must be maintained

 5  consistent with the rules of the commission department.

 6         (6)  SPECIAL RESERVES.--In addition to such regular

 7  reserve, special reserves shall be established:

 8         (a)  To protect members against losses resulting from

 9  credit extended or from risk assets when required by rule, or

10  when found by the office department, in any special case, to

11  be necessary for that purpose; or

12         (b)  As authorized by the board of directors.

13         (7)  RESERVE FOR CONTINGENCIES.--The board of directors

14  may, after the regular reserve required by this section and

15  rules of the commission department has been set aside,

16  transfer a portion of undivided earnings to an auxiliary

17  reserve account to provide for additional possible losses and

18  expenses.

19         (8)  RESERVES.--The ratio of equity to total assets for

20  each credit union must be maintained at not less than 5

21  percent.  At the end of the calendar quarter when this ratio

22  is determined to be less than 5 percent, the credit union

23  shall, within 60 days thereafter, prepare and file with the

24  office department for approval a plan to achieve the minimum

25  ratio within 4 years, or such longer period of time approved

26  by the office department.  Once achieved, each credit union

27  must maintain a ratio of equity to total assets of not less

28  than 5 percent, unless otherwise authorized by the office

29  department.  The commission department, by rule, shall

30  prescribe the information, types of restrictions and

31  limitations on operations, reporting requirements, and other

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 1  criteria that are required to be included in an acceptable

 2  plan.  An acceptable plan must recognize the unique

 3  characteristics and risk differences for the individual credit

 4  union.

 5         Section 1761.  Section 657.053, Florida Statutes, is

 6  amended to read:

 7         657.053  Assessments; state credit unions.--Each state

 8  credit union shall pay to the office department a semiannual

 9  assessment equal to $500 plus 15 cents for each $1,000 of

10  total assets.  The amounts of all assessments provided for in

11  this section shall be deemed to be maximum amounts.  The

12  commission department has the authority to establish, by rule,

13  and from time to time to change, assessments in amounts less

14  than the maximum amounts stated in this section.

15         Section 1762.  Section 657.062, Florida Statutes, is

16  amended to read:

17         657.062  Assumption of control by guarantor or

18  insurer.--

19         (1)  The office department may direct the corporation

20  or the National Credit Union Administration, whichever is

21  applicable, to assume control of the property, assets, and

22  business of its member credit union and to operate it subject

23  to the directions of the office department:

24         (a)  Whenever the office department finds that the

25  credit union:

26         1.  Is engaging or has engaged in an unsafe or unsound

27  practice;

28         2.  Is violating or has violated any provision of this

29  chapter; or

30  

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 1         3.  Is violating or has violated any commission

 2  department rule, office department order, or written agreement

 3  entered into with the office department,

 4  

 5  in such a manner that the credit union is threatened with

 6  imminent insolvency.

 7         (b)  Whenever a majority of the members of the board of

 8  directors of the credit union have been removed by the office

 9  department or shall have resigned.

10         (2)  Except when prohibited by federal or state law, in

11  the event of assumption of control, the guarantor or insurer

12  may elect the board of directors and the operating committees

13  and may, without penalty or liability, prepay any deposit

14  accounts; terminate any contracts or agreements with

15  employees, independent contractors, or consultants; terminate

16  any contract or agreement with any person to provide goods,

17  products, or services if the performance of such contract

18  would adversely affect the safety or soundness of the credit

19  unions or if such contract was entered into in violation of s.

20  657.0315(1); and terminate or assign any lease for property.

21  The authority of the guarantor or insurer to continue

22  operation of a credit union shall continue for a period not to

23  exceed 180 days, unless extended by the office department for

24  an additional period not to exceed 180 days at the request of

25  the guarantor or insurer, or unless involuntary liquidation

26  proceedings have been initiated by the office department.  In

27  the event that the guarantor or insurer does assume control

28  pursuant to the direction of the office department, a meeting

29  of the credit union shall be called within 180 days, or within

30  the period of extension as approved by the office department,

31  for the specific purpose of electing a new board of directors,

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 1  who shall take office when the guarantor or insurer surrenders

 2  control, or considering such other recommendations as the

 3  guarantor or insurer and the office department may make.

 4         Section 1763.  Section 657.063, Florida Statutes, is

 5  amended to read:

 6         657.063  Involuntary liquidation.--

 7         (1)  If the office department finds that any credit

 8  union is bankrupt or insolvent, or is transacting its business

 9  in an unsound, unsafe, or unauthorized manner such that it is

10  threatened with imminent insolvency, and liquidation is in the

11  best interest of the members, the office department may, in

12  its discretion, order the credit union placed in involuntary

13  liquidation and designate and appoint a liquidator to take

14  charge of the assets and affairs of the credit union.  The

15  order shall set forth the specific findings and reasons for

16  the action taken.

17         (2)  The liquidator must be appointed by the office

18  department. The corporation or the National Credit Union

19  Administration, whichever is applicable, must be given the

20  right of first refusal. The office department may appoint

21  another entity if refused by the primary guarantor or insurer.

22         (3)  Upon appointment and in accordance with the

23  directions of the office department, the liquidator shall take

24  possession and charge of all of the assets, books, and records

25  of the credit union and shall take charge of the affairs,

26  business, and operations of the credit union and shall have

27  all of the powers of the board of directors, credit committee,

28  credit manager, and supervisory committee of the credit union.

29  The liquidator shall continue the business operation of the

30  credit union for a period not to exceed 180 days, subject to

31  the direction of the office department. The liquidator shall

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 1  have full authority to make loans and investments and to

 2  permit deposits to or withdrawals from accounts by members,

 3  except that during the period of such operation by the

 4  liquidator, no withdrawal from any account or accounts which

 5  are not fully insured or guaranteed shall be permitted.

 6  Except when prohibited by federal or state law, the liquidator

 7  may, without penalty or liability, prepay any deposit

 8  accounts; terminate any contracts or agreements with

 9  employees, independent contractors, or consultants; terminate

10  any contract or agreement that was entered into in violation

11  of s. 657.0315(1) or s. 657.062(2); and terminate or assign

12  any lease for property.  The liquidator shall proceed with a

13  liquidation of assets by sale or transfer of assets and

14  conversion of assets into cash or liquid investments in

15  preparation for distribution to members on account of shares

16  and deposits. The liquidator shall have specific authority to

17  sell loan assets. The liquidator may enter into agreements for

18  the sale or transfer of loans and other assets with the

19  assumption of outstanding share and deposit accounts, which

20  assumption constitutes full and complete distribution to

21  members on account of shares and deposits.

22         (4)  On the completion of the liquidation and

23  certification by the liquidator that the distribution of the

24  assets of the credit union has been completed, the office

25  department shall cancel the certificate of authorization of

26  the credit union. The office department may designate a

27  custodian to maintain the books and records of the liquidated

28  credit union.

29         (5)  When the liquidating agent of the credit union has

30  been appointed, the office department may waive or deem

31  inapplicable the fees required by this chapter and the

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 1  examination required by s. 655.045(1)(a), provided the

 2  liquidating agent submits periodic reports to the office

 3  department on the status of the liquidation.

 4         Section 1764.  Subsections (1), (5), (8), and (9) of

 5  section 657.064, Florida Statutes, are amended to read:

 6         657.064  Voluntary liquidation.--A credit union may

 7  elect to dissolve voluntarily and liquidate its affairs in the

 8  following manner:

 9         (1)  Before considering any resolution pertaining to

10  voluntary liquidation by the board of directors, the credit

11  union must inform the office department and the corporation or

12  the National Credit Union Administration, whichever is

13  applicable, of the time and place of the meeting of the board

14  of directors.  The notification must be transmitted at least 5

15  days before the board of directors meets.

16         (5)  The notice required by subsection (3) shall also

17  be mailed to the office department within 5 days after the

18  action of the board of directors.  Within 10 days after the

19  meeting of the membership, the board of directors shall notify

20  the office department and the corporation or the National

21  Credit Union Administration, whichever is applicable, in

22  writing of the action taken by the members.

23         (8)  When the liquidating agent of the credit union has

24  been appointed, the office department may waive or hold

25  inapplicable the fees required by this chapter and the

26  examination required by s. 655.045(1)(a), provided the

27  liquidating agent submits periodic reports to the office

28  department on the status of the liquidation.

29         (9)  Whenever the board of directors or liquidator

30  determines that all assets from which there is a reasonable

31  expectancy of realization have been liquidated and distributed

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 1  to the members, a certificate of dissolution on forms

 2  prescribed by the commission department shall be prepared and

 3  filed with the office department together with all pertinent

 4  books and records of the credit union, and thereupon the

 5  credit union shall be dissolved and its certificate of

 6  authorization canceled.  The office department may designate a

 7  custodian to maintain the books and records of the liquidated

 8  credit union.

 9         Section 1765.  Subsections (2), (4), (5), (6), and (7)

10  of section 657.065, Florida Statutes, are amended to read:

11         657.065  Merger.--

12         (2)  The office department shall approve a merger as

13  provided in this section if it finds upon the written and

14  verified application filed by each board of directors that:

15         (a)  Notice of intent to merge was given to the members

16  of the surviving credit union;

17         (b)  Notice of the meeting called to consider the

18  merger was given to the members entitled to vote upon the

19  question;

20         (c)  Such notice disclosed the purpose of the meeting

21  and properly informed the membership of the merging credit

22  union that approval of a merger was under consideration;

23         (d)  A majority of the votes cast upon the question by

24  the members of the merging credit union were in favor of the

25  merger; and

26         (e)  The merger will not seriously impair the ongoing

27  viability of the surviving credit union.

28         (4)  The plan of merger shall be transmitted to the

29  office department for its approval.

30  

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 1         (5)  A merger application shall be accompanied by a

 2  nonrefundable fee of $500.  The fee may be waived by the

 3  office department for a merger pursuant to subsection (6).

 4         (6)  Notwithstanding any other provisions of this

 5  chapter or of chapter 120, a credit union may merge without a

 6  vote of the membership when the office department determines

 7  that the credit union is in danger of insolvency and that the

 8  merger will enable the credit union to avoid liquidation.

 9         (7)  A merger with a resulting state credit union may

10  not take place or be effective unless the office department

11  issues a certificate of merger.  Upon consummation of the

12  merger, the certificate of authorization of the merged credit

13  union shall be returned to the proper authority to be

14  canceled.  Also at consummation, all property and property

15  rights of, and members' interests in, the merged credit union

16  vest in the surviving credit union without deed, endorsement,

17  or other instrument of transfer, and all debts, obligations,

18  and liabilities of the merged credit union must be assumed by

19  the surviving credit union under the certificate of

20  authorization under which the merger was effected. All members

21  of the surviving credit union have the same rights,

22  privileges, and responsibilities after the merger is

23  completed. The certificate of merger must be recorded in the

24  public records of all counties in which the merging credit

25  union owned any real property at the effective date of the

26  merger.

27         Section 1766.  Subsection (4) of section 657.066,

28  Florida Statutes, is amended to read:

29         657.066  Conversion from state credit union to federal

30  credit union and conversely.--Any credit union organized under

31  this part may convert into a federal credit union and any

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 1  federal credit union may convert into a credit union organized

 2  pursuant to this part upon approval of the authority under the

 3  supervision of which the converted credit union will operate

 4  and upon compliance with applicable laws.

 5         (4)  Upon the written approval of the authority under

 6  the supervision of which the converting credit union is to

 7  operate, the converting credit union shall become a credit

 8  union under this chapter or under the laws of the United

 9  States, as the case may be, and thereupon all assets shall

10  become the property of the converted credit union, subject to

11  all existing liabilities against the credit union.  All shares

12  and deposits shall remain intact. Any federal credit union

13  seeking to convert to a state-chartered credit union shall pay

14  a nonrefundable filing fee of $500.  The office department may

15  conduct an examination of any converting federal credit union

16  before approving the conversion and the converting credit

17  union shall pay a nonrefundable examination fee as provided in

18  s. 655.411(1)(b).

19         Section 1767.  Subsection (2) of section 657.068,

20  Florida Statutes, is amended to read:

21         657.068  Central credit unions.--

22         (2)  Membership in a central credit union shall be

23  limited to:

24         (a)  Credit unions organized and operating under this

25  part or any other credit union act;

26         (b)  Officers, directors, committee members, and

27  employees of such credit unions, and officials and employees

28  of any association of credit unions;

29         (c)  Organizations and associations of those persons or

30  organizations set forth in paragraph (a) or paragraph (b);

31  

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 1         (d)  Residents of this state having a limited field of

 2  membership who have applied to the office department to

 3  organize a credit union and have been denied on grounds other

 4  than those set forth in s. 657.005(6);

 5         (e)  Residents of this state having a limited field of

 6  membership, if their application for membership is approved by

 7  the board of directors of the central credit union and by the

 8  office department;

 9         (f)  Persons in the field of membership of liquidated

10  credit unions or of credit unions which have entered into or

11  are about to enter into voluntary or involuntary liquidation

12  proceedings; and

13         (g)  Members of the immediate families of all members

14  qualified above.

15         Section 1768.  Subsection (6) of section 658.12,

16  Florida Statutes, is amended to read:

17         658.12  Definitions.--Subject to other definitions

18  contained in the financial institutions codes and unless the

19  context otherwise requires:

20         (6)  "Community" means an incorporated city, town, or

21  village or, where not within any of the foregoing or if the

22  office department determines that the area within the

23  corporate limits of any of the foregoing is inappropriate

24  under specific circumstances, such trade area or other area,

25  determined by the office department to be appropriate under

26  the circumstances, in which are located persons having

27  generally similar interests, including residential, social, or

28  business interests or combinations thereof.

29         Section 1769.  Section 658.16, Florida Statutes, is

30  amended to read:

31  

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 1         658.16  Creation of banking or trust corporation.--When

 2  authorized by the office department, as provided herein, a

 3  corporation may be formed under the laws of this state for the

 4  purpose of becoming a state bank or a state trust company and

 5  conducting a general banking or trust business.

 6         Section 1770.  Section 658.165, Florida Statutes, is

 7  amended to read:

 8         658.165  Banker's banks; formation; applicability of

 9  financial institutions codes; exceptions.--

10         (1)  When authorized by the office department, a

11  corporation may be formed under the laws of this state for the

12  purpose of becoming a banker's bank.  An application for

13  authority to organize a banker's bank is subject to the

14  provisions of ss. 658.19, 658.20, and 658.21, except that the

15  provisions of ss. 658.20(1)(b) and (c) and 658.21(2) do not

16  apply.

17         (2)  A banker's bank chartered pursuant to subsection

18  (1) shall be subject to the provisions of the financial

19  institutions codes and rules adopted thereunder; and, except

20  as otherwise specifically provided herein or by rule or order

21  of the commission or office department, a banker's bank shall

22  be vested with or subject to the same rights, privileges,

23  duties, restrictions, penalties, liabilities, conditions, and

24  limitations that would apply to a state bank.

25         (3)  Notwithstanding any other provision of this

26  chapter, a banker's bank may repurchase, for its own account,

27  shares of its own capital stock; however, the outstanding

28  capital stock may not be reduced below the minimum required by

29  this chapter without the prior approval of the office

30  department.

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 1         (4)  A banker's bank may provide services at the

 2  request of financial institutions in organizations that have:

 3         (a)  Received conditional regulatory approval from the

 4  office department in the case of a state bank or preliminary

 5  approval from the Office of the Comptroller of the Currency in

 6  the case of a national bank.

 7         (b)  Filed articles of incorporation pursuant to s.

 8  658.23 in the case of a state bank, or filed acceptable

 9  articles of incorporation and an organization certificate in

10  the case of a national bank.

11         (c)  Received capital funds in an amount not less than

12  the minimum capitalization required in any notice of or order

13  granting conditional regulatory approval.

14         (5)  A banker's bank may provide services to the

15  organizers of a proposed financial institution that has not

16  received conditional regulatory approval provided that such

17  services are limited to the financing of the expenses of

18  organizing such financial institution and expenses relating to

19  the acquisition or construction of the institution's proposed

20  operating facilities and associated fixtures and equipment.

21         (6)  If the commission or office department finds that

22  any provision of this chapter is inconsistent with the purpose

23  for which a banker's bank is organized and that the welfare of

24  the public or any financial institution would not be

25  jeopardized thereby, the commission, it may by rule, or the

26  office, by order, may exempt a banker's bank from such

27  provision or limit the application thereof.

28         Section 1771.  Section 658.19, Florida Statutes, is

29  amended to read:

30         658.19  Application for authority to organize a bank or

31  trust company.--

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 1         (1)  A written application for authority to organize a

 2  banking corporation or a trust company shall be filed with the

 3  office department by the proposed directors and shall include:

 4         (a)  The name, residence, and occupation of each

 5  proposed director.

 6         (b)  The proposed corporate name.

 7         (c)  The total initial capital, the number of shares of

 8  each class of the capital stock to be authorized, and the par

 9  value of the shares of each class.

10         (d)  The community, including the street and number, if

11  available, or, if not available, the area within the

12  community, where the principal office of the proposed bank or

13  proposed trust company is to be located.

14         (e)  If known, the name and residence of the proposed

15  president, the proposed chief executive officer if other than

16  the proposed president and, if the application is for

17  organization of a trust company or a bank with trust powers,

18  the name and address of the proposed trust officer.

19         (f)  Such detailed financial, business, and

20  biographical information as the commission or office

21  department may reasonably require for each proposed director,

22  president, chief executive officer (if other than the

23  president), and trust officer (if applicable).

24         (g)  A request for trust powers if desired in

25  connection with an application to organize a bank.

26         (2)  The application shall be in such form as the

27  commission prescribes and contain such additional information

28  as the commission or office department may reasonably requires

29  require and shall be accompanied by the required fee, which

30  shall not be refundable.

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 1         (3)  Notwithstanding chapter 120, an application may be

 2  returned to the applicant, on a one-time basis, for correction

 3  of substantial deficiencies and may be resubmitted without

 4  payment of an additional fee if such resubmission takes place

 5  within 60 days after the date the office department returns

 6  the application.

 7         Section 1772.  Section 658.20, Florida Statutes, is

 8  amended to read:

 9         658.20  Investigation by office department.--

10         (1)  Upon the filing of an application, the office

11  department shall make an investigation of:

12         (a)  The character, reputation, financial standing,

13  business experience, and business qualifications of the

14  proposed officers and directors.

15         (b)  The need for bank or trust facilities or

16  additional bank or trust facilities, as the case may be, in

17  the primary service area where the proposed bank or trust

18  company is to be located.

19         (c)  The ability of the primary service area to support

20  the proposed bank or trust company and all other existing bank

21  or trust facilities in the primary service area.

22         (2)  The office department is authorized to obtain

23  criminal record information from the National Crime

24  Information Center or from the Department of Law Enforcement

25  as a part of its investigation pursuant to this section.

26         (3)  The office department may accept an application

27  for prior approval of individuals who may become directors and

28  executive officers of a failing bank, association, or trust

29  company.  Such applications are governed by the application

30  criteria set forth in paragraph (1)(a) and ss. 658.21(4) and

31  658.28.  The application must be in the form prescribed by the

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 1  commission and must contain additional information prescribed

 2  by the commission or office department, and must be

 3  accompanied by a nonrefundable, nontransferable filing fee of

 4  $7,500.

 5         Section 1773.  Section 658.21, Florida Statutes, is

 6  amended to read:

 7         658.21  Approval of application; findings

 8  required.--The office department shall approve the application

 9  if it finds that:

10         (1)  Local conditions indicate reasonable promise of

11  successful operation for the proposed state bank or trust

12  company.  In determining whether an applicant meets the

13  requirements of this subsection, the office department shall

14  consider all materially relevant factors, including:

15         (a)  The purpose, objectives, and business philosophy

16  of the proposed state bank or trust company.

17         (b)  The projected financial performance of the

18  proposed bank or trust company.

19         (c)  The feasibility of the proposed bank or trust

20  company, as stated in the business plan, particularly with

21  respect to asset and liability growth and management.

22         (2)  The proposed capitalization is in such amount as

23  the office department deems adequate, but in no case may the

24  total capital accounts at opening for a bank be less than $6

25  million if the proposed bank is to be located in any county

26  which is included in a metropolitan statistical area, or $4

27  million if the proposed bank is to be located in any other

28  county.  The total capital accounts at opening for a trust

29  company may not be less than $2 million. Of total capital

30  accounts at opening, as noted in the application or amendments

31  or changes to the application, at least 25 percent of the

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 1  capital shall be directly owned or controlled by the

 2  organizing directors of the bank. Directors of banks owned by

 3  single-bank holding companies shall have direct ownership or

 4  control of at least 25 percent of the bank holding company's

 5  capital accounts. The office department may disallow illegally

 6  obtained currency, monetary instruments, funds, or other

 7  financial resources from the capitalization requirements of

 8  this section.

 9         (3)  The proposed capital structure is in such form as

10  the office department may require, but, at a minimum, every

11  state bank or trust company hereafter organized shall

12  establish paid-in capital equal in amount to not less than 50

13  percent of its total capital accounts and a paid-in surplus

14  equal in amount to not less than 20 percent of its paid-in

15  capital.

16         (4)  The proposed officers have sufficient financial

17  institution experience, ability, standing, and reputation and

18  the proposed directors have sufficient business experience,

19  ability, standing, and reputation to indicate reasonable

20  promise of successful operation, and none of the proposed

21  officers or directors has been convicted of, or pled guilty or

22  nolo contendere to, any violation of s. 655.50, relating to

23  the Florida Control of Money Laundering in Financial

24  Institutions Act; chapter 896, relating to offenses related to

25  financial institutions; or any similar state or federal law.

26  At least two of the proposed directors who are not also

27  proposed officers shall have had at least 1 year direct

28  experience as an executive officer, regulator, or director of

29  a financial institution within 3 years of the date of the

30  application. However, if the applicant demonstrates that at

31  least one of the proposed directors has very substantial

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 1  experience as an executive officer, director, or regulator of

 2  a financial institution more than 3 years before the date of

 3  the application, the office department may modify the

 4  requirement and allow only one director to have direct

 5  financial institution experience within the last 3 years. The

 6  proposed president or chief executive officer shall have had

 7  at least 1 year of direct experience as an executive officer,

 8  director, or regulator of a financial institution within the

 9  last 3 years.

10         (5)  The corporate name of the proposed state bank or

11  trust company is approved by the office department.

12         (6)  Provision has been made for suitable quarters at

13  the location in the application.

14         Section 1774.  Section 658.22, Florida Statutes, is

15  amended to read:

16         658.22  Coordination with federal agencies.--Upon

17  approval by the office department of the application for

18  authority to organize a state bank, the office department

19  shall forward a copy of its final order to the appropriate

20  federal regulatory agencies.  The failure of an applicant to

21  apply for membership in the Federal Reserve System or apply

22  for the insurance of accounts by the Federal Deposit Insurance

23  Corporation within 3 months after approval by the office

24  department or a final order by the Federal Deposit Insurance

25  Corporation denying an applicant's application for insurance

26  of accounts, terminates and revokes the final order issued by

27  the office department approving the application.

28         Section 1775.  Section 658.23, Florida Statutes, is

29  amended to read:

30  

31  

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 1         658.23  Submission of articles of incorporation;

 2  contents; form; approval; filing; commencement of corporate

 3  existence; bylaws.--

 4         (1)  Within 3 months after approval by the office

 5  department and the appropriate federal regulatory agency, the

 6  applicant shall submit its duly executed articles of

 7  incorporation to the office department, together with the

 8  filing fee due the Department of State under s. 607.0122.

 9         (2)  The articles of incorporation shall contain:

10         (a)  The name of the proposed bank or trust company.

11         (b)  The general nature of the business to be

12  transacted or a statement that the corporation may engage in

13  any activity or business permitted by law.  Such statement

14  shall authorize all such activities and business by the

15  corporation.

16         (c)  The amount of capital stock authorized, showing

17  the maximum number of shares of par value common stock and of

18  preferred stock, and of every kind, class, or series of each,

19  together with the distinguishing characteristics and the par

20  value of all shares.

21         (d)  The amount of capital with which the corporation

22  will begin business, which shall not be less than the amount

23  required by the office department pursuant to s. 658.21.

24         (e)  A provision that the corporation is to have

25  perpetual existence unless existence is terminated pursuant to

26  the financial institutions codes.

27         (f)  The initial street address of the main office of

28  the corporation, which shall be in this state.

29         (g)  The number of directors, which shall be five or

30  more, and the names and street addresses of the members of the

31  initial board of directors.

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 1         (h)  A provision for preemptive rights, if applicable.

 2         (i)  A provision authorizing the board of directors to

 3  appoint additional directors, pursuant to s. 658.33, if

 4  applicable.

 5  

 6  The office department shall provide to the proposed directors

 7  form articles of incorporation which shall include only those

 8  provisions required by this section or by chapter 607.  The

 9  form articles shall be acknowledged by the proposed directors

10  and returned to the office department for filing with the

11  Department of State.

12         (3)  Within 30 days of receipt of the executed articles

13  of incorporation in the form previously approved, and the

14  required filing fees, the office department shall place the

15  following legend upon the articles of incorporation and affix

16  the seal of the office of the Comptroller of Florida thereto.

17  The legend shall in substance read:  "Approved by the Office

18  of Financial Institutions and Securities Regulation Department

19  of Banking and Finance this .... day of .... ...(herein the

20  name and signature of the director head of the office

21  department)...."  Thereafter, the articles of incorporation

22  shall be filed with the Department of State.

23         (4)  The corporate existence of a banking corporation

24  or a trust company corporation shall commence on the date the

25  approved articles of incorporation are filed with the

26  Department of State, unless otherwise provided in the articles

27  of incorporation pursuant to s. 607.0203. Thereafter, a

28  banking corporation or trust company corporation may perform

29  all acts necessary to perfect its organization, obtain and

30  equip a place of business, and otherwise prepare to conduct a

31  general banking business or trust business. However, no

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 1  banking corporation or trust company corporation shall become

 2  a state bank or a state trust company or transact any banking

 3  business or trust business until it has received a certificate

 4  of authority to transact business as provided in s. 658.25.

 5         (5)  Unless the articles of incorporation provide

 6  otherwise, the board of directors shall have authority to

 7  adopt or amend bylaws that do not conflict with bylaws that

 8  may have been adopted by the stockholders.  The bylaws shall

 9  be for the government of the bank or trust company,

10  subordinate only to the articles of incorporation and the laws

11  of the United States and of this state. A current copy of the

12  bylaws shall be filed with the office department at all times.

13         (6)  A bank or trust company may not amend its articles

14  of incorporation without the prior written approval of the

15  office department.

16         Section 1776.  Section 658.235, Florida Statutes, is

17  amended to read:

18         658.235  Subscriptions for stock; approval of major

19  shareholders.--

20         (1)  Within 6 months after commencement of corporate

21  existence, and at least 30 days prior to opening, the

22  directors shall have completed the stock offering and shall

23  file with the office department a final list of subscribers to

24  all of the capital stock of the proposed bank or trust company

25  showing the name and residence of each subscriber and the

26  amount of stock of every class subscribed for by each.

27         (2)  The directors shall also provide such detailed

28  financial, business, and biographical information as the

29  commission or office department may reasonably require for

30  each person who, together with related interests, subscribes

31  to 10 percent or more of the voting stock or nonvoting stock

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 1  which is convertible into voting stock of the proposed bank or

 2  trust company.  The office department shall make an

 3  investigation of the character, financial responsibility, and

 4  financial standing of each such person in order to determine

 5  whether he or she is likely to control the bank or trust

 6  company in a manner which would jeopardize the interests of

 7  the depositors and creditors of the bank or trust company, the

 8  other stockholders, or the general public.  This investigation

 9  shall include a determination of whether any such person has

10  been convicted of, or pled guilty or nolo contendere to, a

11  violation of s. 655.50, relating to the Florida Control of

12  Money Laundering in Financial Institutions Act; chapter 896,

13  relating to offenses related to financial transactions; or any

14  similar state or federal law.

15         (3)  At the time the shares are issued, the corporation

16  shall furnish to the office department a final list of

17  shareholders and an affidavit from the corporation that the

18  entire capital accounts have been fully and unconditionally

19  paid in cash and that valid assets representing such total

20  capital accounts are held by the bank, trust company, or

21  escrow agent.

22         Section 1777.  Section 658.24, Florida Statutes, is

23  amended to read:

24         658.24  Organizational procedures.--After the corporate

25  existence of a bank or trust company corporation has commenced

26  and the stock has been issued, but no less than 30 days prior

27  to the intended opening date, a shareholders' meeting shall be

28  held to elect directors already approved by the office

29  department, to approve organizational expenses, and to conduct

30  such other business relating to the corporation as may be

31  appropriate. Immediately after the board of directors has been

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 1  elected by the shareholders, the board shall meet to adopt

 2  bylaws, elect officers, and conduct such other business

 3  relating to the corporation as may be appropriate.  Within 10

 4  days after the shareholders' and directors' meetings, the

 5  corporation shall file with the office department a copy of

 6  the minutes of the meetings together with a copy of the bylaws

 7  that were adopted, a list showing the names and residence

 8  addresses of the officers elected and the title of each, and a

 9  detailed accounting of the organization expenses approved by

10  the shareholders.

11         Section 1778.  Subsections (2) and (3) of section

12  658.25, Florida Statutes, are amended to read:

13         658.25  Opening for business.--

14         (2)  At least 30 days prior to its intended opening

15  date, the corporation shall notify the office department of

16  its proposed opening date and confirm its compliance with all

17  conditions imposed in the order or orders issued by the office

18  department relating to its organization.

19         (3)  The office department shall perform a preopening

20  examination to verify good faith compliance with all the

21  requirements of law and that the bank or trust company

22  corporation is ready to engage in a general commercial bank or

23  trust business. If the office department finds that such

24  requirements have been met, it shall issue a certificate of

25  authorization to transact a general commercial bank or trust

26  business.  Upon the issuance of the certificate of

27  authorization, the bank or trust company corporation shall

28  become a state bank or a state trust company and the

29  certificate shall constitute its charter.

30         Section 1779.  Subsections (2), (3), and (4) of section

31  658.26, Florida Statutes, are amended to read:

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 1         658.26  Places of transacting business; branches;

 2  facilities.--

 3         (2)(a)  In addition, with the approval of the office

 4  department and upon such conditions as the commission or

 5  office department prescribes, any bank or trust company may

 6  establish branches within or outside the state. With the

 7  approval of the office department upon a determination that

 8  the resulting bank or trust company will be of sound financial

 9  condition, any bank or trust company incorporated pursuant to

10  this chapter may establish branches by merger with any other

11  bank or trust company.

12         (b)  An application for a branch by a bank that does

13  not meet the requirements for the branch notification process

14  shall be in writing in such form as the commission department

15  prescribes and be supported by such information, data, and

16  records as the commission or office department may require to

17  make findings necessary for approval. Applications filed

18  pursuant to this subsection shall not be published in the

19  Florida Administrative Weekly but shall otherwise be subject

20  to the provisions of chapter 120.  Upon the filing of an

21  application and a nonrefundable filing fee for the

22  establishment of any branch permitted by paragraph (a), the

23  office department shall make an investigation with respect to

24  compliance with the requirements of paragraph (a) and shall

25  investigate and consider all factors relevant to such

26  requirements, including the following:

27         1.  The sufficiency of capital accounts in relation to

28  the deposit liabilities of the bank, or in relation to the

29  number and valuation of fiduciary accounts of the trust

30  company, including the proposed branch, and the additional

31  fixed assets, if any, which are proposed for the branch and

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 1  its operations, without undue risk to the bank or its

 2  depositors, or undue risk to the trust company or its

 3  fiduciary accounts;

 4         2.  The sufficiency of earnings and earning prospects

 5  of the bank or trust company to support the anticipated

 6  expenses and any anticipated operating losses of the branch

 7  during its formative or initial years;

 8         3.  The sufficiency and quality of management available

 9  to operate the branch;

10         4.  The name of the proposed branch to determine if it

11  reasonably identifies the branch as a branch of the main

12  office and is not likely to unduly confuse the public; and

13         5.  Substantial compliance by the applicants with

14  applicable law governing their operations.

15         (c)  As provided by commission departmental rule, a

16  financial institution operating in a safe and sound manner may

17  establish a branch by filing a written notice with the office

18  department at least 30 days before opening that branch. In

19  such case, the financial institution need not file a branch

20  application or pay a branch application fee.

21         (3)(a)  An office in this state may be relocated with

22  prior written approval of the office department. An

23  application for relocation shall be in writing in such form as

24  the commission department prescribes and shall be supported by

25  such information, data, and records as the commission or

26  office department may require to make findings necessary for

27  approval.

28         (b)  Applications filed pursuant to this subsection

29  shall not be published in the Florida Administrative Weekly

30  but shall otherwise be subject to the provisions of chapter

31  120. Upon the filing of a relocation application and a

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 1  nonrefundable filing fee, the office department shall

 2  investigate to determine substantial compliance by the

 3  financial institution with applicable law governing its

 4  operations. Additional investments in land, buildings, leases,

 5  and leasehold improvements resulting from such relocation

 6  shall comply with the limitations imposed by s. 658.67(7)(a).

 7  A main office may not be moved outside this state unless

 8  expressly authorized by the financial institutions codes or by

 9  federal law.

10         (c)  A relocation application filed by a state bank or

11  trust company that is operating in a safe and sound manner

12  which is not denied within 10 working days after receipt shall

13  be deemed approved unless the office department notifies the

14  financial institution in writing that the application was not

15  complete.

16         (d)  In addition to the application required by

17  paragraph (a), a financial institution whose main office in

18  this state has been in operation less than 24 months must

19  provide evidence that the criteria of s. 658.21(1) will be

20  met.

21         (e)  A branch office may be closed with 30 days' prior

22  written notice to the office department. The notice shall

23  include any information the commission prescribes department

24  may prescribe by rule.

25         (4)  With prior written notification to the office

26  department, any bank may operate facilities which are not

27  physically connected to the main or branch office of the bank,

28  provided that the facilities are situated on the property of

29  the main or branch office or property contiguous thereto.

30  Property which is separated from the main or branch office of

31  a bank by only a street, and one or more walkways and

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 1  alleyways are determined to be, for purposes of this

 2  subsection, contiguous to the property of the main or branch

 3  office.

 4         Section 1780.  Subsections (1), (2), (4), and (5) of

 5  section 658.27, Florida Statutes, are amended to read:

 6         658.27  Control of bank or trust company; definitions

 7  and related provisions.--

 8         (1)  In ss. 658.27-658.29, unless the context clearly

 9  requires otherwise:

10         (a)  "Bank holding company" means any business

11  organization which has or acquires control over any bank or

12  trust company or over any business organization that is or

13  becomes a bank holding company by virtue of ss. 658.27-658.29.

14         (b)  "Business organization" means a corporation,

15  association, partnership, or business trust and includes any

16  similar organization (including a trust company and including

17  a bank, whether or not authorized to engage in trust business,

18  but only if such bank is, or by virtue of ss. 658.27-658.29

19  becomes, a bank holding company), whether created, organized,

20  or existing under the laws of the United States; this state or

21  any other state of the United States; or any other country,

22  government, or jurisdiction.  "Business organization" does not

23  include any corporation the majority of the shares of which

24  are owned by the United States or by this state.  "Business

25  organization" also includes any other trust, unless by its

26  terms it must terminate within 25 years or not later than 21

27  years and 10 months after the death of individuals living on

28  the effective date of the trust, unless the office department

29  determines, after notice and opportunity for hearing, that a

30  purpose for the creation of such trust was the evasion of the

31  provisions of ss. 658.27-658.29.

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 1         (c)  "Edge Act corporation" means a corporation

 2  organized and existing under the provisions of s. 25(a) of the

 3  Federal Reserve Act, 12 U.S.C. ss. 611-632.

 4         (d)  "Subsidiary," with respect to a specified bank,

 5  trust company, or bank holding company, means:

 6         1.  Any business organization 25 percent or more of the

 7  voting shares of which, excluding shares owned by the United

 8  States or by any business organization wholly owned by the

 9  United States, are directly or indirectly owned or controlled

10  by such bank, trust company, or bank holding company or are

11  held by such bank, trust company, or bank holding company with

12  power to vote;

13         2.  Any business organization the election of a

14  majority of the directors of which is controlled in any manner

15  by such bank, trust company, or bank holding company; or

16         3.  Any business organization with respect to the

17  management or policies of which such bank, trust company, or

18  bank holding company has the power, directly or indirectly, to

19  exercise a controlling influence, as determined by the office

20  department after notice and opportunity for hearing.

21         (e)  "Successor," with respect to a specified bank

22  holding company, means any business organization which

23  acquires directly or indirectly from the bank holding company

24  shares of any bank or trust company, when and if the

25  relationship between such business organization and the bank

26  holding company is such that the transaction effects no

27  substantial change in the control of the bank or trust company

28  or beneficial ownership of such shares of such bank or trust

29  company. The commission department may, by rule, further

30  define the term "successor" to the extent necessary to prevent

31  evasion of the purposes of ss. 658.27-658.29.  For the

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 1  purposes of ss. 658.27-658.29, any successor to a bank holding

 2  company shall be deemed to have been a bank holding company

 3  from the date on which the predecessor business organization

 4  became a bank holding company.

 5         (2)  A business organization has control over a bank or

 6  over any other business organization if:

 7         (a)  The business organization directly or indirectly

 8  or acting through one or more other persons owns, controls, or

 9  has power to vote 25 percent or more of any class of voting

10  securities of the bank or other business organization;

11         (b)  The business organization controls in any manner

12  the election of a majority of the directors, trustees, or

13  other governing body of the bank or other business

14  organization;

15         (c)  The business organization owns, controls, or has

16  power to vote 10 percent or more of any class of voting

17  securities of the bank or other business organization and

18  exercises a controlling influence over the management or

19  policies of the bank or other business organization; or

20         (d)  The office department determines, after notice and

21  opportunity for hearing, that the business organization

22  directly or indirectly exercises a controlling influence over

23  the management or policies of the bank or other business

24  organization.

25         (4)  Shares of any kind or class of voting securities,

26  and assets, of a bank or business organization which, after

27  March 28, 1972, the effective date of former s. 659.141(2)(g),

28  are transferred by any bank holding company, or by any bank or

29  any business organization which, but for such transfer, would

30  be a bank holding company, directly or indirectly to any

31  transferee that is indebted to the transferor, or has one or

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 1  more officers, directors, trustees, or beneficiaries in common

 2  with or subject to control by the transferor, shall be deemed

 3  to be indirectly owned or controlled by the transferor unless

 4  the office department, after opportunity for hearing,

 5  determines that the transferor is not in fact capable of

 6  controlling the transferee.

 7         (5)  Notwithstanding any other provision of this

 8  section, no bank and no business organization shall be deemed

 9  to own or control voting shares or assets of another bank or

10  another business organization if:

11         (a)  The ownership or control of such shares or assets

12  is in a fiduciary capacity, except as provided in paragraph

13  (3)(b) and subsection (4).  For the purposes of the preceding

14  sentence, shares of a bank or a business organization shall

15  not be deemed to have been acquired in a fiduciary capacity if

16  the acquiring bank or business organization has sole

17  discretionary authority to exercise voting rights with respect

18  thereto, except that this limitation is applicable in the case

19  of a bank or business organization acquiring such shares prior

20  to March 28, 1972, the effective date of former s.

21  659.141(3)(a), only if the bank or business organization has

22  the right, consistent with its obligations under the

23  instrument, agreement, or other arrangement establishing the

24  fiduciary relationship, to divest itself of such voting rights

25  and fails to exercise that right to divest within 1 year after

26  that date;

27         (b)  The shares are acquired in connection with the

28  underwriting of securities by a business organization, in good

29  faith and without any intent or purpose to evade the purposes

30  of ss. 658.27-658.29, and if such shares are held only for

31  such period of time, not exceeding 3 months from date of

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 1  acquisition, as will permit the sale thereof on a reasonable

 2  basis; however, upon application by the underwriting business

 3  organization, and after notice and opportunity for hearing, if

 4  the office department finds that the sale of such shares

 5  within that period of time would create an unreasonable

 6  hardship on the underwriting business organization, that there

 7  is no intent or purpose to evade the purposes of ss.

 8  658.27-658.29 by the continued ownership or control of such

 9  shares by such underwriting business organization, and that an

10  extension of such period of time would not be detrimental to

11  the public interest, the office department is authorized to

12  extend, from time to time, for not more than 1 month at a

13  time, the 3-month period, but the aggregate of such extensions

14  shall not exceed 3 months;

15         (c)  Control of voting rights of such shares is

16  acquired in good faith, and without any purpose or intent to

17  evade the purposes of ss. 658.27-658.29, in the course of

18  participating in a proxy solicitation by a business

19  organization formed in good faith, and without any purpose or

20  intent to evade the purposes of ss. 658.27-658.29, for the

21  sole purpose of participating in such proxy solicitation, and

22  such control of voting rights terminates immediately upon the

23  conclusion of the sole purpose for which such business

24  organization was formed; or

25         (d)  The ownership or control of such shares or assets

26  is acquired in securing or collecting a debt previously

27  contracted in good faith, unless the office department, after

28  notice and opportunity for hearing, finds that a purpose of

29  any part of any transaction was an evasion of the purposes of

30  ss. 658.27-658.29 and if the ownership or control of such

31  shares or assets is held only for such reasonable period of

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 1  time, not exceeding 2 years after the date of acquisition, as

 2  will permit the divestiture thereof on a reasonable basis.

 3  Upon application by the bank or business organization which

 4  acquired such ownership or control in accordance with the

 5  preceding provisions of this paragraph, and after notice and

 6  opportunity for hearing, if the office department finds that

 7  the bank or business organization has made reasonable and good

 8  faith efforts to divest itself of such ownership or control on

 9  a reasonable basis within the 2-year period but has been

10  unable to do so, that immediate divestiture of such ownership

11  or control would create an unreasonable hardship on such bank

12  or business organization, that continuation of such ownership

13  or control involves no purpose or intent to evade the purposes

14  of ss. 658.27-658.29, and that an extension of the 2-year

15  period would not be detrimental to the public interest, the

16  office department is authorized to extend, from time to time

17  and for not more than 1 year at a time, the 2-year period, but

18  the aggregate of all such extensions shall not exceed 3 years.

19         Section 1781.  Subsections (1), (2), and (3) of section

20  658.28, Florida Statutes, are amended to read:

21         658.28  Acquisition of control of a bank or trust

22  company.--

23         (1)  In any case in which a person or a group of

24  persons, directly or indirectly or acting by or through one or

25  more persons, proposes to purchase or acquire a controlling

26  interest in any state bank or state trust company, and thereby

27  to change the control of that bank or trust company, each

28  person or group of persons shall first make application to the

29  office department for a certificate of approval of such

30  proposed change of control of the bank or trust company.  The

31  application shall contain the name and address, and such other

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 1  relevant information as the commission or office requires

 2  department may require, including information relating to

 3  other and former addresses and the reputation, character,

 4  responsibility, and business affiliations, of the proposed new

 5  owner or each of the proposed new owners of the controlling

 6  interest.  The office department shall issue a certificate of

 7  approval only after it has made an investigation and

 8  determined that the proposed new owner or owners of the

 9  interest are qualified by reputation, character, experience,

10  and financial responsibility to control and operate the bank

11  or trust company in a legal and proper manner and that the

12  interests of the other stockholders, if any, and the

13  depositors and creditors of the bank or trust company and the

14  interests of the public generally will not be jeopardized by

15  the proposed change in ownership, controlling interest, or

16  management.  No person who has been convicted of, or pled

17  guilty or nolo contendere to, a violation of s. 655.50,

18  relating to the Florida Control of Money Laundering in

19  Financial Institutions Act; chapter 896, relating to offenses

20  related to financial transactions; or any similar state or

21  federal law shall be given a certificate of approval by the

22  office department.

23         (2)  For the purposes of this section, the standards,

24  criteria, and exceptions contained in s. 658.27(2), (3), (4),

25  and (5) relating to control by a business organization of a

26  bank or another business organization apply to the persons

27  mentioned in this section and constitute the standards,

28  criteria, and exceptions which determine whether any person or

29  group of persons shall be deemed to be purchasing or

30  acquiring, or to have purchased or acquired, directly or

31  indirectly a "controlling interest" in a state bank or a state

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 1  trust company; but the office department is not limited to

 2  those standards or criteria in determining whether any such

 3  person shall be deemed to be acting by or through one or more

 4  other persons.

 5         (3)  In any case in which a proposed purchase or

 6  acquisition of voting securities of a state bank or trust

 7  company would give rise to the presumption created under s.

 8  658.27(2)(c), the person or group of persons who propose to

 9  purchase or acquire the voting securities shall first give

10  written notice of the proposal to the office department.  Such

11  notice may present information that the proposed purchase or

12  acquisition will not result in control.  The office department

13  shall afford the person seeking to rebut the presumption an

14  opportunity to present views in writing or orally before its

15  designated representatives at an informal conference.  If the

16  office department determines, pursuant to the informal

17  conference, that the person or group of persons seeking to

18  rebut the presumption exercises a controlling influence over

19  the bank, an application for change of control must be filed

20  pursuant to this section.

21         Section 1782.  Section 658.285, Florida Statutes, is

22  amended to read:

23         658.285  Acquisition or ownership of state banks by

24  international banking corporations.--An international banking

25  corporation may, with the approval of the office department

26  pursuant to s. 658.28, acquire control over or organize a

27  state bank organized under the laws of this state. For the

28  purposes of this section, the word "bank" shall have the

29  meaning given in s. 2(c) of the Bank Holding Company Act of

30  1956, 12 U.S.C. s. 1841(c).

31  

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 1         Section 1783.  Subsections (2), (4), (5), (6), (7),

 2  (9), and (10) of section 658.295, Florida Statutes, are

 3  amended to read:

 4         658.295  Interstate banking.--

 5         (2)  DEFINITIONS.--For purposes of this section, the

 6  term:

 7         (a)  "Acquire," with respect to a company, means to:

 8         1.  Merge or consolidate with a bank holding company;

 9         2.  Assume direct or indirect ownership or control of:

10         a.  More than 25 percent of any class of voting shares

11  of a bank holding company or a bank, if the acquiring company

12  was not a bank holding company prior to such acquisition;

13         b.  More than 5 percent of any class of voting shares

14  of a bank holding company or a bank, if the acquiring company

15  was a bank holding company prior to such acquisition; or

16         c.  All or substantially all of the assets of a bank

17  holding company or bank, if the acquiring company was a bank

18  holding company prior to such acquisition; or

19         3.  Take any other action that results in the direct or

20  indirect acquisition of control by a company of a bank holding

21  company, if the acquiring company was a bank holding company

22  prior to such acquisition.

23         (b)  "Affiliate" has the meaning set forth in s. 2(k)

24  of the Bank Holding Company Act.

25         (c)  "Bank" means an institution as defined in s. 2(c)

26  of the Bank Holding Company Act.

27         (d)  "Bank holding company" has the meaning set forth

28  in s. 2(a) of the Bank Holding Company Act, and unless the

29  context requires otherwise, includes any Florida bank holding

30  company, any out-of-state bank holding company, or any

31  international banking company.

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 1         (e)  "Banking office" means any bank, branch of a bank,

 2  or other office at which a bank accepts deposits, provided the

 3  term does not include any:

 4         1.  Unmanned automatic teller machine, point-of-sale

 5  terminal, or other similar unmanned electronic banking

 6  facility at which deposits may be accepted;

 7         2.  Office located outside the United States; or

 8         3.  Loan production office, representative office, or

 9  other office at which deposits are not accepted.

10         (f)  "Bank Holding Company Act" means the federal Bank

11  Holding Company Act of 1956, as amended, 12 U.S.C. ss. 1841 et

12  seq.

13         (g)  "Bank regulatory agency" means:

14         1.  Any agency of another state with primary

15  responsibility for chartering and regulating banks;

16         2.  The Office of the Comptroller of the Currency, the

17  Federal Deposit Insurance Corporation, the Board of Governors

18  of the Federal Reserve System, and any successor to these

19  agencies; or

20         3.  An agency of a country other than the United States

21  with primary responsibility for chartering and regulating

22  banks and bank holding companies in such country.

23         (h)  "Branch" has the meaning set forth in s. 658.12.

24         (i)  "Company" has the meaning set forth in s. 2(b) of

25  the Bank Holding Company Act, and includes a bank holding

26  company.

27         (j)  "Control" has the meaning set forth in s. 2(a)(2)

28  of the Bank Holding Company Act.

29         (k)  "Department" means the Department of Banking and

30  Finance.

31  

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 1         (k)(l)  "Deposits" means all demand, time, and savings

 2  deposits of individuals, partnerships, corporations, the

 3  United States, and states and political subdivisions in the

 4  United States, as set forth in 12 U.S.C. s. 1813.  However,

 5  the term "deposits" does not include deposits of banks or

 6  foreign governments or institutions or deposits held by

 7  foreign banking offices or corporations organized pursuant to

 8  s. 25 or s. 25(a) of the Federal Reserve Act, as amended, 12

 9  U.S.C. ss. 601-604a or 12 U.S.C. ss. 611-631. Pursuant to

10  rules established by the commission department, determinations

11  of deposits shall be made by reference to the most recently

12  available consolidated report of condition or similar reports

13  filed by banks with state or federal regulatory agencies.

14         (l)(m)  "Depository institution" means any institution

15  included for any purpose within the definitions of "insured

16  depository institution" as set forth in 12 U.S.C. s.

17  1813(c)(2) and (3).

18         (m)(n)  "Florida bank" means a bank whose home state is

19  this state.

20         (n)(o)  "Florida bank holding company" means a bank

21  holding company that:

22         1.  Had its principal place of business in this state

23  on July 1, 1966, or the date on which it became a bank holding

24  company, whichever is later.

25         2.  Is not controlled by an out-of-state bank holding

26  company.

27         (o)(p)  "Home state" means:

28         1.  With respect to a state bank, the state by which

29  the bank is chartered.

30         2.  With respect to a national bank, the state in which

31  the main office of the bank is located.

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 1         3.  With respect to a foreign bank, the state

 2  determined to be the home state of such foreign bank under 12

 3  U.S.C. s. 3103(c).

 4         (p)(q)  "Home state regulator" means, with respect to

 5  an out-of-state bank holding company, the bank regulatory

 6  agency of the state in which such company maintains its

 7  principal place of business.

 8         (q)(r)  "International banking corporation" means an

 9  entity as defined in s. 663.01(6).

10         (r)(s)  "State bank" means a bank chartered under the

11  laws of this state.

12         (s)(t)  "Principal place of business," of a bank

13  holding company, means the state in which the total deposits

14  of its subsidiaries were the greatest on July 1, 1966, or on

15  the date on which the company became a bank holding company,

16  whichever is later.

17         (t)(u)  "Out-of-state bank holding company" means a

18  bank holding company that has its principal place of business

19  in a state other than this state or the District of Columbia

20  and, unless the context requires otherwise, includes an

21  international banking corporation.

22         (u)(v)  "State" means any state, territory, or other

23  possession of the United States, including the District of

24  Columbia.

25         (v)(w)  "Subsidiary" has the meaning set forth in s.

26  2(d) of the Bank Holding Company Act.

27         (4)  APPLICABLE LAW.--Any out-of-state bank holding

28  company that controls a Florida bank or a Florida bank holding

29  company is subject to the laws of this state, and the rules of

30  the commission department, relating to the acquisition,

31  ownership, and operation of banks and bank holding companies

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 1  located in this state which are applicable to Florida bank

 2  holding companies.

 3         (5)  AUTHORITY TO ENTER INTO COOPERATIVE AGREEMENTS;

 4  FEES.--In order to carry out the purposes of this section, the

 5  office department may:

 6         (a)  Enter into cooperative, coordinating, or

 7  information-sharing agreements with other bank regulatory

 8  agencies or any organization affiliated with or representing

 9  one or more bank regulatory agencies to facilitate the

10  regulation of banks and bank holding companies doing business

11  in this state.

12         (b)  Accept reports of examinations or investigations

13  or other records from other bank regulatory agencies having

14  concurrent jurisdiction over a state bank or a bank holding

15  company that controls a state bank in lieu of conducting its

16  own examinations or investigations.

17         (c)  Take any action jointly with other bank regulatory

18  agencies having concurrent jurisdiction over banks and bank

19  holding companies doing business in this state, or take such

20  action independently, to carry out its responsibilities.

21         (d)  Assess supervisory fees that shall be payable by

22  Florida banks and Florida bank holding companies in connection

23  with the office's department's performance of its duties.

24  Such fees may be shared with other bank regulatory agencies or

25  any organizations affiliated with or representing one or more

26  bank regulatory agencies in accordance with agreements between

27  them and the office department.

28         (6)  PERMITTED ACQUISITIONS.--

29         (a)  Except as otherwise expressly permitted by s. 1841

30  of the Bank Holding Company Act, no bank holding company may

31  

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 1  acquire a Florida bank holding company or a Florida bank

 2  without the prior approval of the office department.

 3         (b)  Notwithstanding paragraph (a), prior office

 4  department approval is not required and the standards for

 5  approval in subsection (8) shall be waived by the office

 6  department if the acquisition is made:

 7         1.  In a transaction arranged by the office department

 8  or another bank regulatory agency to prevent insolvency or the

 9  appointment of a liquidator or receiver of the acquired bank;

10  or

11         2.  In a transaction in which a bank forms its own bank

12  holding company, if the ownership rights of the former bank

13  shareholders are substantially similar to those of the

14  shareholders of the new bank holding company.

15         (c)  The prohibition in paragraph (a) does not apply if

16  the acquisition is made solely for the purpose of facilitating

17  an acquisition of a successor institution as defined in s.

18  658.40(4).

19         (d)  Notwithstanding paragraph (a), to the extent

20  prohibited or preempted by federal law, or to the extent the

21  determination of compliance with the conditions imposed in

22  subsection (8) duplicates a determination made or to be made

23  by the responsible federal regulatory agency as part of the

24  federal approval process, prior office department approval of

25  any application filed by an out-of-state bank or out-of-state

26  bank holding company to acquire a Florida bank or a Florida

27  bank holding company is not required when such Florida bank or

28  all bank subsidiaries of such Florida bank holding company are

29  national banks.

30         (7)  REQUIRED APPLICATION.--

31  

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 1         (a)  A company that proposes to make an acquisition

 2  under this section shall:

 3         1.  File with the office department a copy of the

 4  application that such company has filed with the responsible

 5  federal bank regulatory agency, together with such additional

 6  information as the commission or office requires department

 7  may prescribe.

 8         2.  Pay to the office department the required

 9  application fee, pursuant to s. 658.73.

10         (b)  To the extent consistent with the effective

11  discharge of the office's department's responsibilities, the

12  forms established under this section for application and

13  reporting shall conform to those established by the Board of

14  Governors of the Federal Reserve System under the Bank Holding

15  Company Act.

16         (c)  In connection with an application received under

17  this section, the office department shall:

18         1.  Require that prior notice of the application be

19  published once in a daily newspaper of general circulation in

20  the county in which the bank to be acquired has its principal

21  place of business or that a notice of intent have been mailed

22  via certified mail to each person owning stock in the bank to

23  be acquired and provide an opportunity for public comment.

24         2.  Make the application available for public

25  inspection to the extent required or permitted under

26  applicable state or federal law.

27         (d)  If the applicant is an out-of-state bank holding

28  company that is not incorporated under the laws of this state,

29  it shall submit with the application proof that the applicant

30  has complied with applicable requirements of chapter 607,

31  

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 1  together with the filing fee due the Department of State under

 2  s. 607.0122.

 3         (9)  REPORTS; EXAMINATIONS.--To the extent required

 4  prescribed by the commission or office department, each bank

 5  holding company that directly or indirectly controls a state

 6  bank shall submit to the office department financial reports

 7  filed by such company with any bank regulatory agency

 8  concerning state banks located in this state within 15 days

 9  after the filing thereof with such agency. However, any report

10  prohibited by applicable federal or state law is not required

11  to be submitted to the office department.

12         (10)  PENALTIES.--The office department may enforce the

13  provisions of this section pursuant to the financial

14  institutions' codes.  The office department shall promptly

15  give notice to the home state regulator of any enforcement

16  action initiated against an out-of-state bank holding company

17  and, to the extent practicable, shall consult and cooperate

18  with the home state regulator in pursuing and resolving said

19  enforcement action.  In the case of an out-of-state holding

20  company, the office department shall recognize the exclusive

21  authority of the home state regulator over corporate

22  governance matters and the primary responsibility of the home

23  state regulator with respect to safety and soundness matters.

24         Section 1784.  Paragraph (g) of subsection (3), and

25  subsections (4), (6), (8), (9), (11), (12), and (13) of

26  section 658.2953, Florida Statutes, are amended to read:

27         658.2953  Interstate branching.--

28         (3)  LEGISLATIVE INTENT.--The Legislature finds it is

29  in the interest of the citizens of this state, and declares it

30  to be the intent of this section, to:

31  

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 1         (g)  Provide the commission and office department

 2  sufficient powers and responsibilities to carry out such

 3  purposes.

 4         (4)  DEFINITIONS.--As used in this section, unless a

 5  different meaning is required by the context:

 6         (a)  "Bank" has the meaning set forth in 12 U.S.C. s.

 7  1813(h), provided the term "bank" does not include any

 8  "foreign bank" as defined in 12 U.S.C. s. 3101(7), except such

 9  term includes any foreign bank organized under the laws of a

10  territory of the United States, Puerto Rico, Guam, American

11  Samoa, or the Virgin Islands, the deposits of which are

12  insured by the Federal Deposit Insurance Corporation.

13         (b)  "Bank holding company" has the meaning set forth

14  in 12 U.S.C. s. 1841(a)(1).

15         (c)  "Bank regulatory agency" means:

16         1.  Any agency of another state with primary

17  responsibility for chartering and regulating banks.

18         2.  The Office of the Comptroller of the Currency, the

19  Federal Deposit Insurance Corporation, the Board of Governors

20  of the Federal Reserve System, and any successor to such

21  agencies.

22         (d)  "Branch" has the meaning set forth in s. 658.12.

23         (e)  "Department" means the Department of Banking and

24  Finance.

25         (e)(f)  "De novo branch" means a branch of a bank

26  located in a host state which:

27         1.  Is originally established by the bank as a branch.

28         2.  Does not become a branch of the bank as a result

29  of:

30         a.  The acquisition of another bank or a branch of

31  another bank; or

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 1         b.  The merger, consolidation, or conversion involving

 2  any such bank or branch.

 3         (f)(g)  "Control" shall be construed consistently with

 4  the provisions of 12 U.S.C. s. 1841(a)(2).

 5         (g)(h)  "Failing financial entity" means an

 6  out-of-state state bank that has been determined by its home

 7  state regulator or the appropriate federal regulatory agency

 8  to be imminently insolvent or to require immediate action to

 9  prevent its probable failure.

10         (h)(i)  "Home state" means:

11         1.  With respect to a state bank, the state by which

12  the bank is chartered.

13         2.  With respect to a national bank, the state in which

14  the main office of the bank is located.

15         3.  With respect to a foreign bank, the state

16  determined to be the home state of such foreign bank under 12

17  U.S.C. s. 3103(c).

18         (i)(j)  "Home state regulator" means, with respect to

19  an out-of-state state bank, the bank's regulatory agency of

20  the state in which such bank is chartered.

21         (j)(k)  "Host state" means a state, other than the home

22  state of a bank, in which the bank maintains or seeks to

23  establish and maintain a branch.

24         (k)(l)  "Insured depository institution" has the

25  meaning set forth in 12 U.S.C. s. 1813(c)(2) and (3).

26         (l)(m)  "Interstate merger transaction" means the

27  merger or consolidation of banks with different home states,

28  and the conversion of branches of any bank involved in the

29  merger or consolidation into branches of the resulting bank.

30         (m)(n)  "Out-of-state bank" means a bank whose home

31  state is a state other than this state.

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 1         (n)(o)  "Out-of-state state bank" means a bank

 2  chartered under the laws of any state other than this state.

 3         (o)(p)  "Resulting bank" means a bank that has resulted

 4  from an interstate merger transaction under this section.

 5         (p)(q)  "State" means any state of the United States,

 6  the District of Columbia, any territory of the United States,

 7  Puerto Rico, Guam, American Samoa, the Trust Territory of the

 8  Pacific Islands, the Virgin Islands, and the Northern Mariana

 9  Marian Islands.

10         (q)(r)  "Florida bank" means a bank whose home state is

11  this state.

12         (r)(s)  "State bank" means a bank chartered under the

13  laws of this state.

14         (6)  AUTHORITY OF STATE BANKS TO ESTABLISH INTERSTATE

15  BRANCHES BY MERGER.--Beginning May 31, 1997, With the prior

16  written approval of the office department, a state bank may

17  establish, maintain, and operate one or more branches in a

18  state other than this state pursuant to an interstate merger

19  transaction in which the state bank is the resulting bank.  No

20  later than the date on which the required application for the

21  interstate merger transaction is filed with the responsible

22  federal bank regulatory agency, the applicant state bank shall

23  file an application on a form prescribed by the commission

24  department accompanied by the required fee pursuant to s.

25  658.73. The applicant shall also comply with the provisions of

26  ss. 658.40-658.45.

27         (8)  NOTICE AND FILING REQUIREMENTS.--Any out-of-state

28  bank that will be the resulting bank pursuant to an interstate

29  merger transaction involving a Florida bank shall notify the

30  office department of the proposed merger within 15 days after

31  the date on which it files an application for an interstate

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 1  merger transaction with the appropriate federal regulatory

 2  agency.

 3         (9)  EXAMINATIONS; PERIODIC REPORTS; COOPERATIVE

 4  AGREEMENTS; ASSESSMENT OF FEES.--

 5         (a)  The office department may examine any Florida

 6  branch of an out-of-state state bank which the office

 7  department deems necessary for the purpose of determining

 8  whether the branch is being operated in compliance with the

 9  laws of this state and in accordance with safe and sound

10  banking practices.

11         (b)  The office department may enter into cooperative,

12  coordinating or information-sharing agreements with other bank

13  regulatory agencies or any organization affiliated with or

14  representing one or more bank regulatory agencies to

15  facilitate the regulation of out-of-state state branches doing

16  business in this state.

17         (c)  The office department may accept reports of

18  examinations or investigations, or other records from other

19  regulatory agencies having concurrent jurisdiction over a

20  state bank or a bank holding company that controls

21  out-of-state state banks that operate branches in this state

22  in lieu of conducting its own examinations or investigations.

23         (d)  The office department may assess supervisory and

24  examination fees that shall be payable by state banks and

25  out-of-state state bank holding companies doing business in

26  this state in connection with the office's department's

27  performance of its duties under this section and as prescribed

28  by the commission department.  Such fees may be shared with

29  other bank regulatory agencies or any organizations affiliated

30  with or representing one or more bank regulatory agencies in

31  

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 1  accordance with agreements between them and the office

 2  department.

 3         (11)  ENFORCEMENT.--

 4         (a)  If the office department determines that a branch

 5  maintained by an out-of-state state bank in this state is

 6  being operated in violation of any provision of law of this

 7  state, or that such branch is being operated in an unsafe and

 8  unsound manner, the office department may take all such

 9  enforcement actions as it would be empowered to take if the

10  branch were a state bank, provided that the office department

11  shall promptly give notice to the home state regulator of each

12  enforcement action taken against an out-of-state state bank

13  and, to the extent practicable, shall consult and cooperate

14  with the home state regulator in pursuing and resolving said

15  enforcement action.

16         (b)  The office department may take any action jointly

17  with other regulatory agencies having concurrent jurisdiction

18  over out-of-state banks and bank holding companies that

19  operate branches in this state, or take such action

20  independently, to carry out its responsibilities.

21         (12)  NOTICE OF SUBSEQUENT MERGER.--

22         (a)  Each out-of-state state bank that has established

23  and maintains a branch in this state pursuant to this section

24  shall give at least 30 days' prior written notice to the

25  office department of any merger, consolidation, or other

26  transaction that would cause a change of control pursuant to

27  home state or federal law with respect to such bank or any

28  bank holding company that controls such bank.

29         (b)  Notwithstanding any other provisions of the

30  financial institutions' codes or of chapter 120, in the case

31  of a failing financial entity, the office department shall

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 1  have the power, with the concurrence of the appropriate

 2  regulatory agency, to issue an emergency order authorizing:

 3         1.  The merger or interstate merger transaction of any

 4  such failing financial entity with a state bank or bank

 5  holding company that controls a state bank;

 6         2.  Any bank to acquire assets and assume liabilities

 7  of the Florida branches of any such failing financial entity;

 8         3.  The conversion of any such failing financial entity

 9  into a state bank or trust company;

10         4.  The chartering of a new state bank to acquire the

11  Florida branches of any such failing financial entity; or

12         5.  The chartering of a new state trust company to

13  acquire assets and assume liabilities and rights, powers, and

14  responsibilities as fiduciary of such failing financial

15  entity.

16         (13)  DE NOVO INTERSTATE BRANCHING BY STATE BANKS.--

17         (a)  With the prior approval of the office department,

18  any state bank may establish and maintain a de novo branch or

19  acquire a branch in a state other than this state.

20         (b)  A state bank desiring to establish and maintain a

21  branch in another state pursuant to s. 658.26 shall pay the

22  branch application fee set forth in s. 658.73.  In acting on

23  the application, the office department shall consider the

24  views of the appropriate bank regulatory agencies.

25         Section 1785.  Paragraph (d) of subsection (1) and

26  subsection (4) of section 658.296, Florida Statutes, are

27  amended to read:

28         658.296  Control of deposit-taking institutions.--

29         (1)  As used in this section, unless the context

30  clearly requires otherwise:

31  

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 1         (d)  "Control" has the meaning set forth in s. 2(a)(2)

 2  and (3) of the federal Bank Holding Company Act of 1956, as

 3  amended, 12 U.S.C. s. 1841(a)(2) and (3), except that the

 4  reference therein to "the Board" shall be deemed to refer to

 5  the office department.

 6         (4)  The office department shall have the power to

 7  enforce the prohibitions of this section by seeking to enjoin

 8  any violation, by issuing cease and desist orders, by imposing

 9  administrative fines, or by any other remedies that are

10  provided by law.

11         Section 1786.  Section 658.32, Florida Statutes, is

12  amended to read:

13         658.32  Annual meetings.--Unless otherwise approved by

14  the office department, the annual meeting of stockholders of a

15  state bank or trust company shall be held on such day in the

16  first 4 months of each year as is specified therefor in the

17  articles of incorporation or in the bylaws of the corporation;

18  however, when the day fixed in the articles of incorporation

19  or in the bylaws for the regular annual meeting of the

20  stockholders falls on a legal holiday, the annual meeting of

21  stockholders shall be held on the next following day which is

22  not a legal holiday.

23         Section 1787.  Subsections (3), (4), and (5) of section

24  658.33, Florida Statutes, are amended to read:

25         658.33  Directors, number, qualifications; officers.--

26         (3)  Within 30 days following the annual meeting or any

27  other meeting at which directors or officers are elected, the

28  bank or trust company must submit to the office department the

29  names and residence addresses of those persons on a form

30  adopted by the commission and provided by the office

31  department.

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 1         (4)  Each director, upon assuming office, must

 2  acknowledge that he or she is familiar with his or her

 3  responsibilities as a director and that he or she will

 4  diligently and honestly administer the affairs of the bank or

 5  trust company and will not knowingly violate, or willfully

 6  permit to be violated, any of the provisions of the financial

 7  institutions codes or pertinent rules of the commission

 8  department.  The signed copy of such oath must be filed with

 9  the office department within 30 days after election.

10         (5)  The president or chief executive officer of a bank

11  or trust company must have had at least 1 year of direct

12  experience as an executive officer, director, or regulator of

13  a financial institution within the last 3 years. This

14  requirement may be waived by the office department after

15  considering the overall experience and expertise of the

16  proposed officer.

17         Section 1788.  Subsections (3) and (4) of section

18  658.34, Florida Statutes, are amended to read:

19         658.34  Shares of capital stock.--

20         (3)  With the approval of the office department, a bank

21  or trust company may issue preferred stock of one or more

22  classes in an amount and with a par value as approved by the

23  office department.

24         (4)  With the approval of the office department, a bank

25  or trust company may issue less than all the number of shares

26  of any of its capital stock authorized by its articles of

27  incorporation. Such authorized but unissued shares may be

28  issued only for the following purposes:

29         (a)  To provide for stock options as provided in s.

30  658.35.

31  

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 1         (b)  To declare or pay a stock dividend; however, any

 2  such stock dividend must comply with the provisions of this

 3  section and s. 658.37.

 4         (c)  To increase the capital of the bank or trust

 5  company, with the approval of the office department.

 6         Section 1789.  Subsection (1) of section 658.35,

 7  Florida Statutes, is amended to read:

 8         658.35  Share options; warrants.--

 9         (1)  After obtaining the approval of the majority of

10  the board of directors, the majority of the holders of common

11  stock of the bank, and the office department and after

12  complying with the provisions of s. 607.0624, any bank or

13  trust company may, for the purpose of providing share options

14  for or issuing warrants to one or more of its directors,

15  officers, or employees, hold authorized but unissued, or

16  purchase or otherwise acquire and hold, shares of its own

17  capital stock in an amount not to exceed 20 percent of the

18  total number of shares outstanding.

19         Section 1790.  Section 658.36, Florida Statutes, is

20  amended to read:

21         658.36  Changes in capital.--

22         (1)  No state bank or trust company shall reduce its

23  outstanding capital stock without first obtaining the approval

24  of the office department, and such approval shall be withheld

25  if the reduction will cause the outstanding capital stock to

26  be less than the minimum required pursuant to the financial

27  institutions codes.

28         (2)  Any state bank or trust company may, with the

29  approval of the office department, provide for an increase in

30  its capital stock.

31  

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 1         Section 1791.  Section 658.37, Florida Statutes, is

 2  amended to read:

 3         658.37  Dividends and surplus.--The directors of any

 4  bank or trust company, after charging off bad debts,

 5  depreciation, and other worthless assets if any, and making

 6  provision for reasonably anticipated future losses on loans

 7  and other assets, may quarterly, semiannually, or annually

 8  declare a dividend of so much of the aggregate of the net

 9  profits of that period combined with its retained net profits

10  of the preceding 2 years as they shall judge expedient, and,

11  with the approval of the office department, any bank or trust

12  company may declare a dividend from retained net profits which

13  accrued prior to the preceding 2 years, but each bank or trust

14  company shall, before the declaration of a dividend on its

15  common stock, carry 20 percent of its net profits for such

16  preceding period as is covered by the dividend to its surplus

17  fund, until the same shall at least equal the amount of its

18  common and preferred stock then issued and outstanding.  No

19  bank or trust company shall declare any dividend at any time

20  at which its net income from the current year combined with

21  the retained net income from the preceding 2 years is a loss

22  or which would cause the capital accounts of the bank or trust

23  company to fall below the minimum amount required by law,

24  regulation, order, or any written agreement with the office

25  department or a state or federal regulatory agency.  A bank or

26  trust company may, however, split up or divide the issued

27  shares of capital stock into a greater number of shares

28  without increasing or decreasing the capital accounts of the

29  bank or trust company, and such shall not be construed to be a

30  dividend within the meaning of this section.

31  

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 1         Section 1792.  Section 658.39, Florida Statutes, is

 2  amended to read:

 3         658.39  Stockholders; examination of records.--No bank,

 4  trust company, or financial institution-affiliated party shall

 5  permit any stockholder, other than a qualified director,

 6  officer, or employee thereof, to have access to, or to examine

 7  or inspect, any of the books or records of such bank or trust

 8  company other than its general statement of condition of its

 9  general assets and liabilities, the quarterly reports of

10  condition and quarterly reports of income required to be

11  submitted to the office department pursuant to s. 655.045, and

12  a list of shareholders as provided in s. 655.057.

13         Section 1793.  Subsection (4) of section 658.40,

14  Florida Statutes, is amended to read:

15         658.40  Definitions for merger and consolidation.--As

16  used in the provisions of this code relating to the merger and

17  consolidation of banks and trust companies, unless the context

18  requires otherwise:

19         (4)  "Successor institution" means a banking

20  corporation or a trust company organized under the laws of

21  this state to which the office department has not issued a

22  certificate of authorization, as provided in s. 658.25, to

23  conduct a banking business or trust business, the sole purpose

24  of the organization of which is to facilitate a plan of

25  merger, reorganization, or consolidation.

26         Section 1794.  Subsection (1) of section 658.41,

27  Florida Statutes, is amended to read:

28         658.41  Merger; resulting state or national bank.--

29         (1)  Upon filing of an application with the office

30  department by the constituent banks or trust companies, and

31  upon approval by the office department, banks and state trust

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 1  companies may be merged with a resulting state bank or state

 2  trust company, as prescribed in this code, except that the

 3  action by a constituent national bank shall be taken in the

 4  manner prescribed by, and shall be subject to, any limitations

 5  or requirements imposed by any law of the United States

 6  applicable thereto, which shall also govern the rights of its

 7  dissenting shareholders; and the terms and provisions of the

 8  plan of merger and merger agreement required by s. 658.42, as

 9  they relate to a constituent national bank, shall conform with

10  such federal laws.  The application shall be accompanied by a

11  plan of merger and merger agreement as provided in s. 658.42.

12         Section 1795.  Paragraphs (d) and (f) of subsection (1)

13  and subsection (2) of section 658.42, Florida Statutes, are

14  amended to read:

15         658.42  Plan of merger and merger agreement.--

16         (1)  If the resulting bank or trust company will be a

17  state bank or a state trust company, the constituent banks or

18  trust companies shall adopt a plan of merger and merger

19  agreement stating the method, terms, and conditions of the

20  merger, including the rights of the stockholders of each

21  constituent bank or trust company and all agreements

22  concerning the merger.  The board of directors of each

23  constituent bank or trust company shall, by a majority of the

24  entire board, approve the plan of merger and merger agreement

25  which shall contain:

26         (d)  A statement that the plan and agreement are

27  subject to approval by the office department and by the

28  stockholders of each constituent bank or trust company.

29         (f)  Such additional provisions not contrary to law as

30  may be agreed upon by the constituent banks and trust

31  companies and such other provisions as the office department

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 1  requires to enable it to discharge its duties with respect to

 2  the merger.

 3         (2)  In connection with the organization of a successor

 4  institution, a showing and finding of public convenience and

 5  advantage for the organization of a new state bank or state

 6  trust company is not required; and the commission department

 7  shall adopt special rules relating to the formation,

 8  organization, approval, and chartering of successor

 9  institutions which omit or waive such of the provisions of ss.

10  658.16-658.26 as are not essential to safeguard the public

11  interest and the safety and soundness of state banks and state

12  trust companies, but no certificate of authorization to

13  conduct a banking business or trust business shall be issued

14  to a successor institution unless a certificate of merger, as

15  provided in s. 658.45, is issued pursuant to the plan of

16  merger and merger agreement.  However, nothing in this

17  subsection shall be construed as waiving or otherwise

18  impairing the public-interest requirement in s. 658.43(3)(d).

19         Section 1796.  Section 658.43, Florida Statutes, is

20  amended to read:

21         658.43  Approval by office department; valuation of

22  assets; emergency action.--

23         (1)  After approval by the board of directors of each

24  constituent bank or trust company, the plan of merger and

25  merger agreement shall be submitted to the office department

26  for approval, together with a certified copy of the

27  authorizing resolutions of the board of directors of each

28  constituent state bank or state trust company showing approval

29  by a majority of the entire board of directors of each such

30  state bank or state trust company, and evidence of proper

31  

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 1  action by the board of directors of any constituent national

 2  bank.

 3         (2)  Without approval by the office department, no

 4  asset shall be carried on the books of the resulting state

 5  bank or state trust company at a valuation higher than that on

 6  the books of the constituent bank or trust company at the time

 7  of the last examination by a state or national bank or trust

 8  company examiner before the effective date of the merger.

 9         (3)  The office department shall approve the plan of

10  merger and merger agreement if it appears that:

11         (a)  The resulting state bank or state trust company

12  meets all the requirements of state law as to the formation of

13  a new state bank or state trust company, except that this

14  provision shall not apply to the establishment of branches by

15  merger as provided in s. 658.26.

16         (b)  The agreement provides an adequate capital

17  structure, including surplus, of the resulting state bank or

18  state trust company in relation to its activities which are to

19  continue or are to be undertaken, and also in relation to its

20  deposit liabilities in the case of a resulting state bank.

21         (c)  The valuation is fair.

22         (d)  The merger is not contrary to the public interest.

23  

24  If the office department disapproves a plan of merger or

25  merger agreement, it shall state its objections and, the

26  provisions of chapter 120 notwithstanding, give an opportunity

27  to the constituent banks, trust companies, or banks and trust

28  companies to amend the plan of merger and merger agreement to

29  obviate such objections.

30         (4)  If the resulting state bank is not to have trust

31  powers, the office department shall not approve a merger until

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 1  adequate provision has been made for successors to fiduciary

 2  positions held by any constituent trust company or any

 3  constituent bank.

 4         (5)  Approval by the office department, by final order

 5  or otherwise, of a plan of merger or merger agreement shall be

 6  deemed subject to approval of the plan of merger and merger

 7  agreement by the stockholders of each constituent bank or

 8  trust company as provided in s. 658.44(1) and shall also be

 9  deemed subject to approval of the merger and the plan of

10  merger and merger agreement by each appropriate federal

11  regulatory agency. Unless all such approvals have been

12  obtained and proper evidence thereof submitted to the office

13  department within 6 months after the approval by the office

14  department, the approval by the office department of the plan

15  of merger and merger agreement shall be deemed to be revoked

16  and terminated; however, the office department on its own

17  motion, or at the request of the constituent banks or trust

18  companies for good cause shown, may extend the time for a

19  period not exceeding 6 months.

20         (6)  No merger with a resulting state bank or trust

21  company shall take place or be effective without the issuance

22  by the office department of a certificate of merger.

23         (7)  Notwithstanding any other provisions of the

24  financial institutions codes or of chapter 120, if the office

25  department or the appropriate federal regulatory agency finds

26  that immediate action is necessary in order to prevent the

27  probable failure of one or more banks, associations, or trust

28  companies, which in this subsection may be referred to as a

29  "failing financial entity," the office department shall have

30  the power, with the concurrence of the appropriate federal

31  regulatory agency in the case of any bank or association the

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 1  deposits of which are insured by the Federal Deposit Insurance

 2  Corporation, to issue an emergency order authorizing:

 3         (a)  The merger of any such failing financial entity

 4  with a state bank;

 5         (b)  The merger of any such failing financial entity

 6  with a state trust company;

 7         (c)  Any state bank to acquire assets and assume

 8  liabilities of any such failing financial entity, including

 9  all rights, powers, and responsibilities as fiduciary in

10  instances where the failing financial institution is actively

11  engaged in the exercise of trust powers;

12         (d)  Any state trust company to acquire assets and

13  assume liabilities of any such failing trust company and

14  rights, powers, and responsibilities as fiduciary of such

15  failing trust company;

16         (e)  The conversion of any such failing financial

17  entity into a state bank or trust company;

18         (f)  The chartering of a new state bank or state

19  association to acquire assets and assume liabilities of any

20  such failing financial entity and to assume rights, powers,

21  and responsibilities as fiduciary in cases where such failing

22  financial entity is engaged in the exercise of trust powers;

23  or

24         (g)  The chartering of a new state trust company to

25  acquire assets and assume liabilities and rights, powers, and

26  responsibilities as fiduciary of such failing trust company.

27  

28  Any such finding by the office department shall be based upon

29  reports furnished to it by a state bank, association, or trust

30  company examiner or by a federal bank or association examiner

31  or upon other evidence from which it is reasonable to conclude

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 1  that any such bank, association, or trust company is insolvent

 2  or is threatened with imminent insolvency.  The office

 3  department may disallow illegally obtained currency, monetary

 4  instruments, funds, or other financial resources from the

 5  capitalization requirements of this section. The stockholders

 6  of a failing bank, association, or trust company that is

 7  acquired by another bank or trust company pursuant to this

 8  subsection shall be entitled to the same procedural rights and

 9  to compensation for the remaining value of their shares as is

10  provided for dissenters in s. 658.44, except that they shall

11  have no right to vote against the transaction. Any transaction

12  authorized by this subsection may be accomplished through the

13  organization of a successor institution.

14         Section 1797.  Subsections (1), (5), and (9) of section

15  658.44, Florida Statutes, are amended to read:

16         658.44  Approval by stockholders; rights of dissenters;

17  preemptive rights.--

18         (1)  The office department shall not issue a

19  certificate of merger to a resulting state bank or trust

20  company unless the plan of merger and merger agreement, as

21  adopted by a majority of the entire board of directors of each

22  constituent bank or trust company, and as approved by each

23  appropriate federal regulatory agency and by the office

24  department, has been approved:

25         (a)  By the stockholders of each constituent national

26  bank as provided by, and in accordance with the procedures

27  required by, the laws of the United States applicable thereto,

28  and

29         (b)  After notice as hereinafter provided, by the

30  affirmative vote or written consent of the holders of at least

31  a majority of the shares entitled to vote thereon of each

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 1  constituent state bank or state trust company, unless any

 2  class of shares of any constituent state bank or state trust

 3  company is entitled to vote thereon as a class, in which event

 4  as to such constituent state bank or state trust company the

 5  plan of merger and merger agreement shall be approved by the

 6  stockholders upon receiving the affirmative vote or written

 7  consent of the holders of a majority of the shares of each

 8  class of shares entitled to vote thereon as a class and of the

 9  total shares entitled to vote thereon.  Such vote of

10  stockholders of a constituent state bank or state trust

11  company shall be at an annual or special meeting of

12  stockholders or by written consent of the stockholders without

13  a meeting as provided in s. 607.0704.

14  

15  Approval by the stockholders of a constituent bank or trust

16  company of a plan of merger and merger agreement shall

17  constitute the adoption by the stockholders of the articles of

18  incorporation of the resulting state bank or state trust

19  company as set forth in the plan of merger and merger

20  agreement.

21         (5)  The value of dissenting shares of each constituent

22  state bank or state trust company, the owners of which have

23  not accepted an offer for such shares made pursuant to

24  subsection (3), shall be determined as of the effective date

25  of the merger by three appraisers, one to be selected by the

26  owners of at least two-thirds of such dissenting shares, one

27  to be selected by the board of directors of the resulting

28  state bank, and the third to be selected by the two so chosen.

29  The value agreed upon by any two of the appraisers shall

30  control and be final and binding on all parties.  If, within

31  90 days from the effective date of the merger, for any reason

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 1  one or more of the appraisers is not selected as herein

 2  provided, or the appraisers fail to determine the value of

 3  such dissenting shares, the office department shall cause an

 4  appraisal of such dissenting shares to be made which will be

 5  final and binding on all parties.  The expenses of appraisal

 6  shall be paid by the resulting state bank or trust company.

 7         (9)  After approval of the plan of merger and merger

 8  agreement by the stockholders as provided in subsection (1),

 9  there shall be filed with the office department, within 30

10  days after the time limit in s. 658.43(5), a fully executed

11  counterpart of the plan of merger and merger agreement as so

12  approved if it differs in any respect from any fully executed

13  counterpart thereof theretofore filed with the office

14  department, and copies of the resolutions approving the same

15  by the stockholders of each constituent bank or trust company,

16  certified by the president, or chief executive officer if

17  other than the president, and the cashier or corporate

18  secretary of each constituent bank or trust company,

19  respectively, with the corporate seal impressed thereon.

20         Section 1798.  Subsections (1) and (4) of section

21  658.45, Florida Statutes, are amended to read:

22         658.45  Certificate of merger and effective date;

23  effect on charters and powers.--

24         (1)  Promptly upon compliance with the provisions of s.

25  658.44(9), the office department shall issue to the resulting

26  bank a certificate of merger setting forth the name of each

27  constituent bank and trust company, the name of the resulting

28  bank or trust company, and the effective date of the merger

29  which, unless the office department for good cause determines

30  otherwise, shall be the date requested by the resulting bank

31  if such request was made at the time of compliance with the

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 1  requirements of s. 658.44(9), but not later than 3 months

 2  after the date of such compliance.  On the effective date of

 3  the merger, the charters and franchises of the constituent

 4  banks and trust companies, other than the resulting bank or

 5  trust company, shall be deemed terminated and surrendered. The

 6  certificate of merger shall be conclusive evidence of the

 7  merger and of the correctness of all proceedings therefor in

 8  all courts and places and may be recorded in any office for

 9  the recording of deeds.

10         (4)(a)  If the resulting state bank is to have trust

11  powers and if one or more of the parties to the merger is a

12  state trust company or a bank having an existing trust

13  department operating pursuant to trust powers theretofore

14  granted by the office department, in the case of a constituent

15  state bank, or by the appropriate federal regulatory

16  authority, in the case of a constituent national bank, such

17  trust powers shall pass to the resulting state bank; and it

18  shall have and may exercise trust powers in the same manner

19  and to the same extent as the constituent banks or trust

20  companies to which such trust powers were originally issued,

21  and no application to have or to continue to have or exercise

22  trust powers shall be required.  However, if the name of the

23  resulting state bank differs from that of a constituent state

24  trust company or a constituent bank having trust powers, the

25  office department shall issue a certificate to the resulting

26  state bank showing its right to exercise the trust powers

27  theretofore granted to the constituent banks or trust

28  companies. All fiduciary relationships and capacities of all

29  the constituent banks and trust companies shall, by operation

30  of law, pass to and be assumed by the resulting bank having

31  trust powers, in the same manner and to the same extent as

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 1  such fiduciary capacities and relationships were held by any

 2  constituent bank or trust company.

 3         (b)  Upon the merger of two or more state trust

 4  companies, the resulting state trust company shall continue to

 5  have and exercise the trust powers of the constituent trust

 6  companies, and no application to have or to continue to

 7  exercise trust powers shall be required.  However, if the name

 8  of the resulting state trust company differs from that of any

 9  of the constituent trust companies, the office department

10  shall issue a certificate to the resulting state trust company

11  showing its right to exercise the trust powers theretofore

12  granted to the constituent trust companies.  All fiduciary

13  relationships and capacities of the constituent state trust

14  companies shall pass to and be assumed by the resulting state

15  trust company by operation of law.

16         Section 1799.  Paragraph (b) of subsection (1),

17  paragraph (e) of subsection (5), and subsection (9) of section

18  658.48, Florida Statutes, are amended to read:

19         658.48  Loans.--A state bank may make loans and

20  extensions of credit, with or without security, subject to the

21  following limitations and provisions:

22         (1)  LOANS; GENERAL LIMITATIONS.--

23         (b)  The commission department may provide by rule for

24  securities margin requirements.

25         (5)  SPECIAL PROVISIONS.--

26         (e)  Loans based upon the security of real estate

27  mortgages shall be documented as first liens, except that

28  liens other than first liens may be taken:

29         1.  To protect a loan previously made in good faith;

30         2.  To further secure a loan otherwise amply and

31  entirely secured;

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 1         3.  As additional security for Federal Housing

 2  Administration Title 1 loans or loans made with participation

 3  or guaranty by the Small Business Administration;

 4         4.  To secure a loan not in excess of 15 percent of the

 5  capital accounts of the bank; or

 6         5.  As provided by rules of the commission department.

 7         (9)  When a bank's capital has been diminished by

 8  losses so that its ability to honor legally binding written

 9  loan commitments is impaired, the office department may

10  approve limited expansion of the lending limitations set forth

11  in this section.

12         Section 1800.  Subsection (2) and paragraph (i) of

13  subsection (3) of section 658.53, Florida Statutes, are

14  amended to read:

15         658.53  Borrowing; limits of indebtedness.--

16         (2)  A state bank may at any time, pursuant to action

17  taken by its board of directors, and after obtaining the

18  written approval of the office department and the approval of

19  stockholders holding not less than two-thirds of the

20  outstanding stock of the bank entitled to vote, evidenced

21  either in a writing signed by the stockholders or by vote at a

22  legally called and held meeting of the stockholders, issue and

23  sell convertible and nonconvertible capital notes and

24  convertible and nonconvertible capital debentures having a

25  final maturity of not more than 25 years from the date of

26  issue, in such amounts and under such terms and conditions as

27  shall be approved by the office department. If deemed

28  necessary by the office department, reasonable provisions for

29  the amortization of the principal amount thereof may be

30  required.  The principal amount of the capital notes and

31  capital debentures is subject to the limitations imposed by

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 1  this chapter on indebtedness of state banks and trust

 2  companies.  Capital notes and capital debentures issued

 3  pursuant to the provisions of this subsection, and the claims

 4  of holders thereof, shall be subordinate to the claims of

 5  depositors and all other creditors of the issuing state bank,

 6  regardless of whether the claims of, or the liability of the

 7  issuing bank to, the depositors arose before or after the

 8  issuance of such capital notes or debentures, but shall be

 9  superior to the claims of shareholders for dividends, reserve

10  profits, or other claims on account of shares of capital stock

11  held by them.  The holders of the capital notes and the

12  holders of the capital debentures shall not be held

13  individually responsible as such holders for any debts,

14  contracts, or engagements of the issuing state bank and shall

15  not be liable for assessments.

16         (3)  No state bank or trust company shall at any time

17  be indebted, or in any way liable, to an amount exceeding the

18  amount of its unimpaired capital stock plus 50 percent of the

19  amount of its unimpaired surplus fund and unimpaired undivided

20  profits fund, except on account of demands of the nature

21  following:

22         (i)  Liabilities incurred for moneys borrowed from a

23  bank when such borrowing is made with the express written

24  approval of the office department.

25         Section 1801.  Subsections (6), (7), and (8), paragraph

26  (c) of subsection (9), paragraph (a) of subsection (10), and

27  subsection (11) of section 658.67, Florida Statutes, are

28  amended to read:

29         658.67  Investment powers and limitations.--A bank may

30  invest its funds, and a trust company may invest its corporate

31  

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 1  funds, subject to the following definitions, restrictions, and

 2  limitations:

 3         (6)  INVESTMENTS IN CORPORATIONS.--Up to an aggregate

 4  of 10 percent of the total assets of a bank may be invested in

 5  the stock, obligations, or other securities of subsidiary

 6  corporations or other corporations or entities, except that

 7  during the first 3 years of existence of a bank, such

 8  investments are limited to 5 percent of the total assets. Any

 9  bank whose aggregate investment on June 30, 1992, exceeds the

10  limitation in this subsection has 5 years within which to

11  achieve compliance; additional time may be approved by the

12  office department if the office department finds that

13  compliance with this subsection will result in more than a

14  minimal loss to the bank.  The commission department may, by

15  rule, further limit any type of investment made pursuant to

16  this subsection if it finds that such investment would

17  constitute an unsafe or unsound practice.

18         (7)  INVESTMENTS IN REAL ESTATE AND EQUIPMENT.--A bank

19  or trust company may invest in real estate and equipment to

20  the extent hereinafter defined:

21         (a)1.  Up to 60 percent of the capital accounts of the

22  bank or trust company may be invested in the direct ownership

23  of, or in leasehold interests in, land and buildings utilized

24  or to be utilized by the bank or trust company in the

25  transaction of its business.  This limitation applies to

26  assets subject to a lease agreement which is required to be

27  capitalized under criteria issued by the Financial Accounting

28  Standards Board.  In lieu of such investment in real estate,

29  with the prior written approval of the office department, up

30  to 60 percent of the capital accounts of the bank or trust

31  company may be invested in the stock of a corporation which

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 1  owns the land and buildings within which the business of the

 2  bank or trust company is or will be transacted.

 3         2.  The real estate investment limitations provided by

 4  this subsection may not be exceeded except with the prior

 5  written approval of the office department.

 6         (b)  A bank or trust company may own or lease

 7  furniture, fixtures, machinery, and equipment such as may be

 8  necessary to the transaction of its business.

 9         (8)  INVESTMENTS IN PERSONAL PROPERTY.--A bank or trust

10  company may own or lease personal property acquired upon the

11  specific request and for the use of a customer and may incur

12  such additional obligations as may be incident to becoming an

13  owner and lessor of such property.  In addition, a bank or

14  trust company may purchase leases as provided by rules of the

15  commission department.

16         (9)  ACQUISITIONS OF PROPERTY AS SECURITY.--A bank or

17  trust company may acquire property of any kind to secure,

18  protect, or satisfy a loan or investment previously made in

19  good faith, and such property shall be entered on the books of

20  the bank or trust company and held and disposed of subject to

21  the following conditions and limitations:

22         (c)  Unless an extension of time is approved in writing

23  by the office department, real estate shall be sold or charged

24  off within 5 years of the date of acquisition, and personal

25  property shall be sold or charged off within 6 months of the

26  date of acquisition.

27         (10)  SPECIAL PROVISIONS.--

28         (a)  None of the bonds or other obligations described

29  in this section shall be eligible for investment in any amount

30  unless current as to all payments of principal and interest

31  and unless rated in one of the four highest classifications,

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 1  or, in the case of commercial paper, unless it is of prime

 2  quality and of the highest letter and numerical rating, as

 3  established by a nationally recognized rating service or any

 4  comparable rating as determined by the office department.

 5  Bonds or other obligations which are unrated shall not be

 6  eligible for investment unless otherwise supported as to

 7  investment quality and marketability by a credit rating file

 8  compiled and maintained in current status by the purchasing

 9  bank or trust company.

10         (11)  OTHER INVESTMENTS; SUBJECT TO DEPARTMENTAL

11  APPROVAL.--A bank or trust company may make such other

12  investments as the commission department approves by rule.

13         Section 1802.  Section 658.68, Florida Statutes, is

14  amended to read:

15         658.68  Liquidity.--

16         (1)  A state bank must maintain a daily liquidity

17  position equal to at least 15 percent of its total transaction

18  accounts and 8 percent of its total nontransaction accounts,

19  less those deposits of public funds for which security has

20  been pledged as provided by law.  Bank assets eligible to meet

21  the liquidity requirement are cash on hand, demand deposits

22  due from correspondent banks, and other investments and

23  short-term marketable securities as determined by rule of the

24  commission department.

25         (2)  Whenever a state bank fails to demonstrate

26  compliance with subsection (1), the bank shall not further

27  diminish its liquidity by making any new loans or discounts

28  otherwise than by discounting or purchasing bills of exchange

29  payable at sight, nor by paying any dividends of its profits

30  until compliance with the liquidity requirement of either has

31  been met.  The office department may notify any bank whose

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 1  liquidity is below the amount required to be maintained to

 2  make good such liquidity, and if the bank fails within 30 days

 3  thereafter to achieve its liquidity requirement, the office

 4  department may determine the bank insolvent and may appoint a

 5  liquidator to wind up the business as provided in ss.

 6  658.79-658.96.

 7         Section 1803.  Section 658.73, Florida Statutes, is

 8  amended to read:

 9         658.73  Fees and assessments.--

10         (1)  Each state bank and state trust company shall pay

11  to the office department examination fees and assessments as

12  follows:

13         (a)  A semiannual fee of $2,500; and

14         (b)  A semiannual assessment, each in such amount as

15  may be determined by the commission department, by rule, but

16  not exceeding 15 cents for each $1,000 of total assets as

17  shown on the statement of condition of the bank or trust

18  company as of the last business day in June and the last

19  business day in December in each year.  In its determination,

20  the commission department may consider examination fees and

21  application fees received from banks and trust companies in

22  setting the semiannual assessment for purposes of meeting the

23  cost of regulation of banks and trust companies subject to

24  this chapter.

25         (2)  Applications filed with the office department

26  shall be accompanied by payment of the following nonrefundable

27  fees:

28         (a)  Fifteen thousand dollars for each application for

29  authority to organize a new state bank or state trust company.

30  

31  

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 1         (b)  Two thousand five hundred dollars for each

 2  application by an existing bank or association for trust

 3  powers.

 4         (c)  Seven thousand five hundred dollars for each

 5  application for authority to acquire a controlling interest in

 6  a state bank or state trust company; however, if more than one

 7  bank or trust company is being acquired in any such

 8  application, the fee shall be increased by $3,500 for each

 9  additional bank or trust company.  However, in no event shall

10  the fee exceed $15,000.

11         (d)  Seven thousand five hundred dollars for each

12  application for conversion of a national bank to a state bank.

13         (e)  One thousand five hundred dollars for each

14  application to establish a branch by any other state bank or

15  state trust company that does not qualify for the branch

16  notification process.

17         (f)  One thousand five hundred dollars for each

18  application for authority to establish a trust service office

19  of a state trust company or of a trust department of a state

20  bank or association, and a like amount for each application by

21  a bank or association with trust powers which is not a state

22  bank or state association for authority to establish a trust

23  service office at a state bank, state association, or state

24  credit union.

25         (g)  Seven thousand five hundred dollars for each

26  application for a merger or consolidation; however, if three

27  or more banks or trust companies are involved in any such

28  application, the fee shall be $3,500 for each involved

29  institution.  However, in no event shall the fee exceed

30  $15,000.

31  

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 1         (h)  Two thousand five hundred dollars to establish a

 2  successor institution.

 3         (i)  Seven hundred fifty dollars for each application

 4  by a state bank or trust company not operating in a safe and

 5  sound manner for relocation of its main office.

 6         (j)  Two thousand five hundred dollars for each

 7  application for the purchase of assets and the assumption of

 8  liabilities.

 9         (3)  If, as a result of any application filed with the

10  office department, the office department determines that an

11  examination is necessary to assess the financial condition of

12  any financial institution, the applying financial institution

13  shall pay to the office department a nonrefundable examination

14  fee, pursuant to s. 655.045(1).

15         (4)  Each state bank and state trust company shall pay

16  to the office department $25 for each "certificate of good

17  standing" certifying that a state-chartered financial

18  institution is licensed to conduct business in this state

19  under the financial institutions codes. All such requests

20  shall be in writing. The office department shall waive this

21  fee when the request is by a state or federal regulatory

22  agency or law enforcement agency.

23         (5)  The amounts of all fees and assessments provided

24  for in this section shall be deemed to be maximum amounts; and

25  the commission department has the authority to establish, by

26  rule, and from time to time to change, fees and assessments in

27  amounts less than the maximum amounts stated in this section.

28         Section 1804.  Section 658.79, Florida Statutes, is

29  amended to read:

30         658.79  Taking possession of insolvent state banks or

31  trust companies.--Whenever the office department has reason to

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 1  conclude, based upon the reports furnished to it by a state

 2  bank or trust company examiner or upon other satisfactory

 3  evidence, that any state bank or trust company:

 4         (1)  Is insolvent or imminently insolvent; or

 5         (2)  Is transacting its business in an unsound, unsafe,

 6  or unauthorized manner such that it is threatened with

 7  imminent insolvency,

 8  

 9  the office department may, in its discretion, forthwith

10  designate and appoint a liquidator or receiver to take charge

11  of the assets and affairs of such bank or trust company and

12  require of him or her such bond and security as the office

13  department deems proper, not exceeding double the amount that

14  may come into his or her hands.  The office department may

15  enlist the services of any state or local law enforcement

16  agency in taking possession and securing the assets of the

17  bank or trust company.

18         Section 1805.  Section 658.80, Florida Statutes, is

19  amended to read:

20         658.80  Appointment of receiver or liquidator.--

21         (1)  Upon taking possession of a state bank or trust

22  company pursuant to s. 658.79, the office department shall

23  appoint either a receiver to conserve the assets of the

24  institution or a liquidator to liquidate the assets of the

25  institution and wind up its affairs.

26         (2)  The Federal Deposit Insurance Corporation or any

27  appropriate federal agency shall be appointed by the office

28  department as receiver or liquidator of any state bank, the

29  deposits of which are to any extent insured by the

30  corporation, and which shall have been closed by the office

31  department.  Upon appointment, the corporation may act without

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 1  bond as receiver or liquidator and shall have and possess all

 2  the powers and privileges provided by the laws of this state

 3  with respect to a receiver or liquidator, respectively, of

 4  such institution, its depositors and other creditors.  If the

 5  corporation declines to accept the tendered appointment, the

 6  office department may appoint and thereafter dismiss or

 7  replace such other receiver or liquidator as deemed necessary

 8  or advisable.

 9         Section 1806.  Section 658.81, Florida Statutes, is

10  amended to read:

11         658.81  Office Department action; notice and court

12  confirmation.--The office department, immediately upon

13  appointing such liquidator or receiver, shall serve notice

14  upon any other person having the charge or management of any

15  such bank or trust company, informing him or her of its action

16  in appointing such liquidator or receiver and notifying him or

17  her that the office department will apply on a date named

18  therein, not to exceed 10 days from the date of service of

19  such notice, to a circuit judge in the court circuit in which

20  the principal office of such bank or trust company is located

21  for an order confirming its action.  A copy of such

22  application together with a notice of hearing thereon shall be

23  served on the person receiving the above notice prior to the

24  time set for such hearing. Such proceedings shall be given

25  precedence over other cases pending in such court and shall in

26  every way be expedited.  Upon the office's department's

27  showing at the hearing on such application that such bank or

28  trust company is insolvent or threatened with imminent

29  insolvency, the court shall enter an order confirming the

30  action of the office department and the appointment of such

31  liquidator or receiver; otherwise, the court shall enter an

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 1  order dismissing the liquidator or receiver, and such

 2  liquidator or receiver shall relinquish his or her control

 3  over the assets and affairs of such bank or trust company.

 4         Section 1807.  Subsections (2) and (3) of section

 5  658.82, Florida Statutes, are amended to read:

 6         658.82  Receiver; powers and duties.--

 7         (2)  Any other receiver appointed pursuant to s. 658.80

 8  shall be subject to the supervision of the office department

 9  and shall have the power to:

10         (a)  Take possession of the books, records, and assets

11  of every description of the bank or trust company and sue for

12  and collect all debts, dues, and claims belonging to the bank

13  or trust company;

14         (b)  Operate the business of the bank or trust company

15  pursuant to the authority granted by its articles of

16  incorporation and the laws of this state in an effort to

17  manage and conserve the assets of the bank or trust company

18  and place such bank or trust company in a sound, safe, and

19  solvent condition;

20         (c)  Sue for and defend, compromise, and settle all

21  claims involving the bank or trust company;

22         (d)  Subject to approval by the circuit court, sell any

23  or all real and personal property of the bank or trust company

24  and sell or compound all bad or doubtful debts;

25         (e)  Pay all expenses of the receivership, which

26  expenses shall be a first charge against the assets of the

27  bank or trust company;

28         (f)  Borrow such sum of money as may be necessary or

29  expedient to protect and conserve the assets and business of

30  the bank or trust company and, in connection therewith, to

31  

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 1  secure such borrowings by the pledge, hypothecation, or

 2  mortgage of the assets of the bank or trust company; and

 3         (g)  If necessary to pay the debts of such bank or

 4  trust company, sue for and enforce the individual liability of

 5  the stockholders.

 6         (3)  Within 30 days of her or his appointment, the

 7  receiver shall file a statement of condition of the bank or

 8  trust company with the office department, in addition to such

 9  other interim reports as the office department may require.

10  Upon receipt of the report of condition, the office department

11  may:

12         (a)  Upon a finding that the bank or trust company is

13  in a safe, sound, and solvent condition, surrender possession

14  of such bank or trust company bank to its directors for the

15  purpose of permitting the bank or trust company to resume

16  business on such terms and conditions as the office department

17  shall prescribe;

18         (b)  Appoint a liquidator to immediately liquidate the

19  assets of the bank or trust company and wind up its affairs;

20         (c)  Grant a further period of time to the receiver to

21  rehabilitate the affairs of the bank or trust company; or

22         (d)  Appoint a new receiver.

23         Section 1808.  Subsections (2) and (3) of section

24  658.83, Florida Statutes, are amended to read:

25         658.83  Liquidator; powers and duties.--

26         (2)  Any other liquidator appointed pursuant to s.

27  658.80 shall, subject to the supervision of the office

28  department, have the power to:

29         (a)  Take possession of the books, records, and assets

30  of every description of the bank or trust company and sue for

31  

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 1  and collect all debts, dues, and claims belonging to the bank

 2  or trust company;

 3         (b)  Sue for and defend, compromise, and settle all

 4  claims involving the bank or trust company;

 5         (c)  Subject to approval by the circuit court, sell any

 6  or all of the real and personal property of the bank or trust

 7  company and sell or compound all bad or doubtful debts;

 8         (d)  Pay all expenses incurred in the liquidation

 9  process, which expenses shall be a first charge against the

10  assets of the bank or trust company and shall be fully paid

11  before any final distribution or payment of dividends to

12  creditors, shareholders, or stockholders;

13         (e)  Borrow such sum of money as may be necessary or

14  expedient in aiding in the liquidation of the bank or trust

15  company and, in connection therewith, to secure such

16  borrowings by the pledge, hypothecation, or mortgage of the

17  assets of the bank or trust company; and

18         (f)  If necessary to pay the debts of such bank or

19  trust company, sue for and enforce the individual liability of

20  the stockholders.

21         (3)  Such liquidator shall pay all moneys received to

22  the Chief Financial Officer Treasurer to be held as a special

23  deposit for the use and benefit of the creditors subject to

24  the order of the office department and also shall make reports

25  quarterly, or when called upon, to the office department of

26  all her or his acts and proceedings.

27         Section 1809.  Subsection (3) of section 658.84,

28  Florida Statutes, is amended to read:

29         658.84  Transfers by banks and other acts in

30  contemplation of insolvency.--

31  

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 1         (3)  Except in any action brought by the office

 2  department, no attachment, injunction, or execution shall be

 3  enforced against such financial institution or any of its

 4  property before final judgment in any suit, action, or

 5  proceeding in any state or federal court.

 6         Section 1810.  Section 658.90, Florida Statutes, is

 7  amended to read:

 8         658.90  Receivers or liquidators under supervision of

 9  office department.--The provisions of ss. 658.79-658.96 shall

10  apply to all receivers or liquidators of any bank or trust

11  company heretofore appointed by the order of any circuit

12  court, and all such receivers or liquidators, both those

13  hereunder and those hereafter appointed by the circuit court,

14  shall at all times be under the supervision and control of the

15  office department and subject at all times to summary

16  discharge and dismissal by it. Any vacancy in such

17  receivership may be filled by the office department at any

18  time.

19         Section 1811.  Section 658.94, Florida Statutes, is

20  amended to read:

21         658.94  Prima facie evidence.--The general ledger, list

22  of claimants, examiner's final report made at the time of the

23  failure of the bank or trust company, and such other records

24  of the office's department's office relating to any closed

25  bank or trust company, or any duly authenticated copy thereof,

26  shall be prima facie evidence of the subject matter therein

27  set forth.

28         Section 1812.  Section 658.95, Florida Statutes, is

29  amended to read:

30         658.95  Voluntary liquidation.--Any bank or trust

31  company may go into liquidation and be closed by a vote of its

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 1  stockholders owning two-thirds of its stock.  Whenever a vote

 2  is taken to go into liquidation, the board of directors shall

 3  cause this fact to be certified to the office department and

 4  publication thereof to be made for a period of 2 months in a

 5  newspaper of general circulation located in the county in

 6  which the bank or trust company is closing up its affairs and

 7  notifying its creditors to present their claims against the

 8  bank or trust company for payment.

 9         Section 1813.  Section 658.96, Florida Statutes, is

10  amended to read:

11         658.96  Procedure in voluntary liquidation.--When a

12  bank or trust company decides to go into voluntary

13  liquidation, the president and cashier, or other appropriate

14  officers, shall, before beginning publication of the notice

15  required by law, furnish the office department with a full and

16  complete detailed statement of the affairs of the bank or

17  trust company and shall thereafter forward to the office

18  department on the first Monday in each month a like detailed

19  statement until all of the liabilities of the bank or trust

20  company shall have been settled in full, provided that, if the

21  office department is not satisfied with the report of any bank

22  or trust company intending to go into voluntary liquidation,

23  or if at any time it is not satisfied with the progress of

24  such liquidation, it shall have full authority to proceed

25  under s. 658.80, or otherwise, as the law directs.

26         Section 1814.  Subsections (3), (5), and (6) of section

27  658.995, Florida Statutes, are amended to read:

28         658.995  Credit Card Bank Act.--

29         (3)  Subject to the provisions of this section and to

30  the approval of the office department, any domestic lender,

31  foreign lender, or business organization may organize, own,

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 1  and control a credit card bank on the terms and conditions

 2  provided in this section:

 3         (a)  If the credit card bank is to be organized under

 4  the laws of this state, such bank shall be organized as

 5  provided in this section;

 6         (b)  In connection with the application to organize or

 7  to control a credit card bank, the applicant shall pay to the

 8  office department a filing fee as provided in s. 658.73 for

 9  the formation of a bank or trust company;

10         (c)  The shares of a credit card bank shall be owned

11  solely by a domestic lender, a foreign lender, or a business

12  organization;

13         (d)  The credit card bank shall accept deposits only at

14  a single location in this state;

15         (e)  The credit card bank shall at all times maintain

16  capital stock and paid-in surplus as required by regulatory

17  policies of the commission and office department but in no

18  event less than $4 million;

19         (f)  The credit card bank may engage only in the

20  business of soliciting, processing, and making loans pursuant

21  to credit card accounts and conducting such other activities

22  as may be necessarily incident thereto;

23         (g)  The credit card bank may not accept demand

24  deposits or deposits that the depositor has the ability to

25  withdraw by check or similar means for payment to third

26  parties or others;

27         (h)  The credit card bank may accept savings or time

28  deposits of only $100,000 or more;

29         (i)  The credit card bank must, prior to opening,

30  obtain and thereafter maintain insurance of its deposits by

31  the Federal Deposit Insurance Corporation; and

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 1         (j)  The credit card bank may not engage in the

 2  business of making commercial loans.

 3         (5)  All credit card banks organized under the laws of

 4  this state shall be subject to the supervision, regulation,

 5  and examination of the office department, and the office

 6  department shall have all enforcement powers with respect

 7  thereto as are provided in the financial institutions codes.

 8         (6)  The commission may adopt department shall have the

 9  power to promulgate rules and regulations implementing the

10  provisions of this section.

11         Section 1815.  Section 660.26, Florida Statutes, is

12  amended to read:

13         660.26  Trust department licensing.--

14         (1)  When authorized by the office department as

15  provided in this section, a state bank or association may

16  establish a trust department for the purpose of conducting

17  trust business.

18         (2)  A written application for trust powers shall be

19  filed with the office department in such form as the

20  commission prescribes and containing such information as the

21  commission and office department may reasonably require.  The

22  application shall be accompanied by the required nonrefundable

23  fee.

24         (3)  Upon the filing of an application, the office

25  department shall investigate and consider:

26         (a)  The general character and management ability of

27  the principal executive officers of the applicant bank or

28  association.

29         (b)  The quality of the supervision to be given to the

30  fiduciary activities, including the qualifications,

31  

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 1  experience, and character of the proposed principal officers

 2  of the trust department.

 3         (c)  The general condition of the applicant bank or

 4  association, and the sufficiency of earnings and earning

 5  prospects of the applicant bank or association, including the

 6  proposed trust department, to support the anticipated expenses

 7  and any anticipated operating losses of the trust department

 8  during its formative or initial years.

 9         (d)  Any other matters relevant to the application and

10  the establishment and operation of the proposed trust

11  department.

12         (4)  Expenses necessarily incurred by the office

13  department in the conduct of investigations required by this

14  section shall, in the case of applications which require

15  investigations by the office department outside the state, be

16  assessed against the applicant bank or association on an

17  actual-cost-incurred basis and shall be in addition to other

18  fees required by law.  Failure to promptly reimburse the

19  office department upon its demand shall be grounds for denial

20  of such application or revocation of any approval thereof.

21         (5)  The office department shall approve the

22  application if it finds that:

23         (a)  The general condition of the applicant bank or

24  association is sufficient to support the proposed trust

25  department.

26         (b)  The earnings and earning prospects of the

27  applicant bank or association, including the earning prospects

28  of the proposed trust department, are sufficient to support

29  the anticipated expenses and any anticipated operating losses

30  of the trust department during its formative or initial years.

31  

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 1         (c)  The capital structure of the bank or association

 2  is adequate to support the trust department.

 3         (d)  The proposed trust officers have or will be

 4  supplied with sufficient trust and related investment,

 5  financial, and managerial experience, ability, and standing to

 6  operate the trust department.

 7         (e)  Provision has been made for the trust department

 8  to occupy suitable quarters at the location specified in the

 9  application.

10         (6)  If applicable federal law requires the approval of

11  a federal regulatory agency for the establishment of a trust

12  department by the applicant bank or association, approval by

13  the office department, by final order or otherwise, shall be

14  deemed subject to approval by such federal regulatory agency,

15  and a final order of denial by such federal regulatory agency

16  will terminate and revoke the final or other order issued by

17  the office department approving the application.

18         (7)  Upon approval of an application by the office

19  department and such federal regulatory agency, if required,

20  the office department shall issue and deliver to the applicant

21  a certificate or other document granting trust powers to the

22  applicant and authorizing it to establish a trust department

23  and engage in trust business.

24         Section 1816.  Section 660.265, Florida Statutes, is

25  amended to read:

26         660.265  Examination fees.--Each state trust company

27  and each state bank or association exercising trust powers

28  shall pay to the office department, within 30 days after an a

29  departmental examination pursuant to s. 655.045, a fee for the

30  costs of the examination by the office department pursuant to

31  s. 655.045.  For the purposes of this section, the term

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 1  "costs" means the salary and travel expenses of field staff

 2  which are directly attributable to its examination of the

 3  financial institution and the travel expenses of any

 4  supervisory or support staff required as a result of

 5  examination findings.

 6         Section 1817.  Section 660.27, Florida Statutes, is

 7  amended to read:

 8         660.27  Deposit of securities with Chief Financial

 9  Officer Treasurer.--

10         (1)  Before transacting any trust business in this

11  state, every trust company and every state or national bank or

12  state or federal association having trust powers shall give

13  satisfactory security by the deposit or pledge of security of

14  the kind or type provided in this section having at all times

15  a market value in an amount equal to 25 percent of the issued

16  and outstanding capital stock of such trust company, bank, or

17  state or federal stock association or, in the case of a

18  federal mutual association, an equivalent amount determined by

19  the office department, or the sum of $25,000, whichever is

20  greater.  However, the value of the security deposited or

21  pledged pursuant to the provisions of this section shall not

22  be required to exceed $500,000.  Any notes, mortgages, bonds,

23  or other securities, other than shares of stock, eligible for

24  investment by a state bank, state association, or state trust

25  company, or eligible for investment by fiduciaries, shall be

26  accepted as satisfactory security for the purposes of this

27  section.

28         (2)  The trust company, bank, or association shall

29  provide to the Chief Financial Officer Treasurer the

30  following:

31  

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 1         (a)  Written information which includes full legal

 2  name; federal employer identification number; principal place

 3  of business; amount of capital stock; and amount of required

 4  collateral.

 5         (b)  The required information listed in paragraph (a)

 6  shall be provided annually as of September 30 and shall be due

 7  November 15.

 8         (3)  The Chief Financial Officer Treasurer shall

 9  determine whether the security deposited or pledged pursuant

10  to this section, or tendered for such deposit or pledge, is of

11  the kind or type permitted, and has a market value in the

12  amount required, by subsection (1).  The security required by

13  this section shall be deposited with or to the credit of, or

14  pledged to, the Chief Financial Officer Treasurer for the

15  account of each state or national bank, state or federal

16  association, or trust company depositing or pledging the same

17  and shall be used, if at all, by the liquidator of such bank,

18  association, or trust company with first priority being given

19  to claims on account of the trust business or fiduciary

20  functions of such bank, association, or trust company or,

21  prior to liquidation, for the payment of any judgment or

22  decree which may be rendered against such bank, association,

23  or trust company in connection with its trust business or its

24  fiduciary functions if such judgment or decree is not

25  otherwise paid by, or out of other assets of, such bank,

26  association, or trust company.

27         (4)  Any security of any kind which has been deposited

28  or pledged as provided in this section may at any time, by or

29  upon the direction of such bank, association, or trust company

30  which deposited or pledged such security, be withdrawn and

31  released from such pledge provided that simultaneously

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 1  therewith satisfactory security as provided in this section,

 2  in such amount, if any, as may be necessary in order to comply

 3  with the requirements of this section, is substituted for the

 4  security so withdrawn and released.

 5         (5)  With the approval of the Chief Financial Officer

 6  Treasurer, each trust company, bank, or association as pledgor

 7  may deposit eligible collateral with a custodian. This

 8  custodian shall not be affiliated or related to the trust

 9  company, bank, or association. Collateral must be deposited

10  using the collateral agreements and provisions as set forth in

11  s. 280.041(2) and (3).

12         Section 1818.  Section 660.28, Florida Statutes, is

13  amended to read:

14         660.28  Exemption from bond and other security as

15  fiduciary.--A trust company or trust department maintaining

16  security with the Chief Financial Officer Treasurer as

17  required by s. 660.27 shall not be required by the state or

18  any of its political subdivisions or by a court of this state

19  to furnish any bond or other security as a condition of, or in

20  connection with, acting in any fiduciary capacity which such

21  trust company or trust department is lawfully permitted to

22  accept or assume.

23         Section 1819.  Section 660.33, Florida Statutes, is

24  amended to read:

25         660.33  Trust service offices.--

26         (1)  In addition to its principal office and any branch

27  trust company authorized under s. 660.32, a trust company or a

28  trust department with its principal place of doing business in

29  this state may maintain one or more trust service offices at

30  the location of any bank, association, or credit union which

31  is organized under the laws of this state or under the laws of

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 1  the United States with its principal place of doing business

 2  in this state.  However, a trust service office may be

 3  established only after the trust company or the trust

 4  department has secured the consent of a majority of the

 5  stockholders or members entitled to vote on such proposal at a

 6  meeting of stockholders or members, and of a majority of the

 7  board of directors, of the bank, association, or credit union

 8  at which a trust service office is proposed to be maintained,

 9  and after a certificate of authorization has been issued to

10  the trust company or the trust department by the office

11  department.

12         (2)(a)  An application for approval to establish a

13  trust service office shall be in such form as the commission

14  prescribes and contain such information as the commission or

15  office department may reasonably requires require and be

16  accompanied by the required nonrefundable fee.

17         (b)  The office department shall issue a certificate

18  approving the establishment of a trust service office by a

19  trust company or a trust department if the office department

20  determines that:

21         1.  The trust company or trust department has complied

22  with the applicable capital requirements;

23         2.  Provision has been made for suitable quarters and

24  staffing for the trust service office; and

25         3.  If the trust service office is to be established at

26  a bank or association without existing trust powers or at a

27  credit union, the establishment of the proposed trust service

28  office will not unduly injure any existing trust companies or

29  trust departments in the community where the trust service

30  office is to be located.

31  

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 1         (3)  The trust company or trust department shall have

 2  the power to conduct any trust business at a trust service

 3  office which it is permitted to conduct at its principal

 4  office unless limited by the provisions of any agreement

 5  between the bank, association, or credit union and the trust

 6  company or trust department.

 7         (4)(a)  Unless an election has been made pursuant to

 8  paragraph (b), when a trust service office is established by a

 9  trust company or a trust department at the location of a bank

10  or association which has trust powers, the bank or association

11  may retain and continue to exercise its trust powers following

12  the establishment of the trust service office.

13         (b)  If the bank or association and the trust company

14  or trust department so elect in the application for approval

15  to establish a trust service office at the location of a bank

16  or association that has trust powers, and if the office

17  department is satisfied that the interests of beneficiaries of

18  the estates, trusts, and other fiduciary relationships being

19  serviced will be adequately protected, the office department

20  shall issue an order authorizing the following:

21         1.  The trust company or trust department, upon

22  complying with all applicable requirements of law, shall be

23  substituted for, succeed to, and replace the bank or

24  association as fiduciary.  The trust company or trust

25  department, as the successor fiduciary, shall thereupon

26  succeed to all the powers, rights, duties, and privileges of

27  the bank or association as fiduciary of all such estates,

28  trusts, guardianships, and other fiduciary relationships in

29  which the bank or association is serving to which the trust

30  company or trust department shall have been lawfully

31  substituted.

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 1         2.  During the time the trust company or trust

 2  department maintains a trust service office at the location of

 3  the bank or association, the trust company or trust department

 4  shall be deemed to be named the fiduciary in all instruments

 5  in which the bank or association is named the fiduciary, even

 6  if the bank or association is not serving as fiduciary at the

 7  time the trust service office is established, in the manner,

 8  to the extent, and with the same effect as though there had

 9  been a merger of the bank and the trust company or trust

10  department.

11         3.  Upon complying with all requirements of law with

12  respect thereto, the bank or association shall be relieved

13  from all of its fiduciary duties in connection with all

14  fiduciary accounts and relationships with respect to which the

15  trust company or trust department has been substituted as

16  fiduciary or with respect to which it has resigned and been

17  relieved as provided by law, and, upon being so relieved of

18  all its fiduciary duties, the bank or association, although

19  retaining its trust powers in an inactive status unless it

20  surrenders them as provided by law, shall not thereafter

21  exercise its trust powers so long as there is a trust service

22  office transacting business at the bank or association. The

23  substitution of the trust company or trust department for the

24  bank or association as fiduciary shall occur and be effective

25  on the day the trust company or trust department opens the

26  trust service office for business, or on such later date as

27  may be specified by court order, or by any written consent or

28  agreement, which lawfully effectuates the designation, by

29  substitution or otherwise, of the trust company or trust

30  department as the fiduciary with respect to any particular

31  fiduciary account.

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 1         (c)1.  Anything in this section or any other law to the

 2  contrary notwithstanding and subject to compliance with this

 3  subsection, an affiliated trust company or an affiliated

 4  bank's trust department, if authorized to exercise trust

 5  powers in this state, shall be deemed substituted as fiduciary

 6  without further authorization where the successor has an

 7  established trust service office in the predecessor's

 8  principal place of business or any branch of the predecessor

 9  located in this state.  The successor may conduct therein any

10  trust business incidental thereto that it is otherwise

11  permitted to conduct in this state, but it may not accept

12  deposits at the offices of the predecessor bank except as

13  incidental to the trust business.

14         2.  To effect the substitution referred to in

15  subparagraph 1., a predecessor shall enter into an agreement

16  with the successor that sets forth the fiduciary powers,

17  rights, privileges, duties, and liabilities of the parties

18  and, more specifically, those to which the successor will

19  succeed, including, but not limited to, those described in

20  subparagraph 7.  The agreement will be approved by the boards

21  of directors of the predecessor, successor, and parent

22  corporations. The agreement shall then be filed with the

23  office department.  The effective date of the agreement shall

24  be the date on which the office department approves the

25  agreement under subparagraph 6. unless another, later date is

26  specified in the agreement, which other date shall be no later

27  than 75 days after the date on which the agreement is filed

28  with the office department under this subparagraph; however,

29  no such agreement may take effect without approval by the

30  office department.

31  

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 1         3.a.  Not sooner than 30 days before or later than 30

 2  days after the date on which the agreement is filed with the

 3  office department under subparagraph 2., the predecessor and

 4  successor shall cause notice of the filing of such agreement

 5  with the office department, along with the procedure for

 6  objection thereto as hereinafter provided, to be published in

 7  a newspaper of general circulation in the county in which the

 8  predecessor's principal place of business is located and file

 9  a copy of such written notice in any applicable

10  court-administered fiduciary proceeding, including, but not

11  limited to, probate and guardianship proceedings, and

12  additionally, they shall serve written notice upon the

13  following:

14         (I)  Each cofiduciary that serves with the predecessor;

15         (II)  Each surviving grantor of a revocable trust;

16         (III)  Each person who alone or in conjunction with

17  others has the power to remove the predecessor;

18         (IV)  Each principal for whom the predecessor serves as

19  agent or custodian;

20         (V)  Each guardian of the person for whom the

21  predecessor serves as guardian of the property for their ward;

22         (VI)  Each beneficiary or the beneficiary's legal or

23  natural guardian, when applicable, currently receiving or

24  entitled as a matter of right to receive a current mandatory

25  or discretionary distribution, as opposed to a remainder

26  distribution, of principal or income from a trust, estate, or

27  other fund with respect to which a substitution of fiduciary

28  under this subsection is to be effected. However, when

29  applicable and in lieu thereof, such service will be made upon

30  the sole holder or a majority of the coholders of a general or

31  limited power of appointment, including one in the form of a

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 1  power of amendment, or revocation, in which case they shall be

 2  deemed to act for any beneficiary who may take by virtue of

 3  the exercise or failure to exercise the power;

 4         (VII)  Upon any other person or entity required by the

 5  court in any referenced court-administered fiduciary

 6  proceeding; and

 7         (VIII)  In the case of a trust described in the

 8  Internal Revenue Code of 1986 s. 401(a) as it may from time to

 9  time hereafter be amended, upon the employer or employee

10  organization or both responsible for the maintenance of such

11  trust.

12         b.  Service of such written notice will not be required

13  upon the persons or entities listed in sub-subparagraph a.

14  when the documents or other writings that created the

15  fiduciary relationship permit a substitution of fiduciaries.

16         c.  Service of written notice shall be made upon the

17  persons or entities listed in sub-subparagraph a. in the

18  manner provided for the service of formal notice under the

19  applicable Florida Probate Rules. Service of written notice by

20  mail shall be completed upon receipt or refusal of the notice

21  by the persons or entities listed in sub-subparagraph a.  If

22  such written notice is made by mail or delivery, proof of

23  mailing or delivery shall be by verified statement of the

24  person mailing or delivering the written notice, and there

25  shall be attached to the verified statement the signed

26  receipt, appropriate affidavit of delivery by the person

27  effecting such delivery, or other evidence satisfactory to the

28  office department or to a court of competent jurisdiction that

29  notice was given properly to or refused by the addressee or

30  agent of the addressee.  The original of such proof shall be

31  filed with the office department with copies to the file or

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 1  the account maintained by the predecessor or successor and to

 2  the court in any court-administered fiduciary administration.

 3         4.  Within 60 days after the date on which newspaper

 4  notice is published under subparagraph 3., after any date of a

 5  signed or refused receipt pertaining to the written notice by

 6  mail under subparagraph 3., after any date of delivery as set

 7  forth in the affidavit referenced in subparagraph 3., or after

 8  the date on which service is otherwise accomplished, the

 9  latest date being operative, but not thereafter, the persons

10  or entities listed in subparagraph 3. or the court in a

11  court-administered fiduciary proceeding on its own motion may

12  object to such substitution of fiduciaries by serving written

13  notice, executed by the persons, entities, or court, upon the

14  predecessor, successor, and office department.  Such notice

15  shall be served in the same manner as provided for service of

16  the original notice upon interested persons or entities in

17  subparagraph 3.  Execution of such notice shall be in the same

18  manner as is required for the execution and recordation of

19  deeds to real property in this state except that notice by a

20  court may be signed by the judge.  If such notice of objection

21  is executed by all of the cofiduciaries that serve with the

22  predecessor, by each surviving grantor of a revocable trust,

23  by all of the persons that have the power to remove the

24  predecessor as fiduciary, by all of the principals for whom

25  the predecessor serves as agent or custodian, by the guardian

26  of the person for whom the predecessor serves as guardian of

27  the property for their ward, by all of the beneficiaries

28  currently receiving or entitled as a matter of right to

29  receive a current mandatory or discretionary distribution, as

30  opposed to a remainder distribution, of principal or income,

31  or by the sole holder or a majority of the coholders of a

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 1  general or limited power of appointment including one in the

 2  form of a power of amendment or revocation, the successor will

 3  not be substituted for the predecessor and the predecessor

 4  will remain or be reinstated as fiduciary but only as to the

 5  fiduciary relationship that is the subject of such objection.

 6  Reinstatement shall take effect immediately upon receipt of

 7  such notice by the predecessor, successor, and office

 8  department.  If the notice of objection is executed by less

 9  than all of the persons or entities of any category specified

10  in this subparagraph, or if entered by the court of a

11  court-administered fiduciary proceeding on its own motion,

12  then, with regard to the fiduciary relationship that is the

13  subject of such notice of objection, the predecessor and

14  successor may elect to do either of the following:

15         a.  File a subsequent agreement with the office

16  department, with copies of such agreement to be mailed to all

17  of the specified persons or entities, which states that the

18  successor will not be substituted for the predecessor as to

19  that fiduciary relationship, and such agreement shall cause

20  the predecessor to remain or be reinstated, instanter, as

21  fiduciary in that fiduciary relationship. The filing of such

22  subsequent agreement with the office department does not

23  prejudice the predecessor or the successor from filing another

24  agreement that affects such fiduciary relationship under

25  subparagraph 2.; or

26         b.  File a petition with the court having jurisdiction

27  of any court-administered fiduciary proceeding or commence a

28  civil action in a court of competent jurisdiction as to any

29  other applicable fiduciary relationship. The court shall then

30  determine whether such substitution is appropriate and whether

31  it is in the best interest of those specifically interested in

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 1  the premises. The court shall then enter judgment accordingly

 2  and specify the party to serve thereafter as the fiduciary.

 3  The predecessor, the successor, the office department, and

 4  those for whom the fiduciary relationship is the subject of

 5  the civil action and upon whom service of written notice was

 6  required under subparagraph 3. shall be necessary parties in

 7  any civil action that concerns an objection to the

 8  substitution.  Any such petition or separate civil action must

 9  be filed within 60 days after service of the notice of

10  objection. Failure to do so will be deemed to be an agreement

11  pursuant to sub-subparagraph a., and the alternative provided

12  in sub-subparagraph a. will be deemed to have been selected

13  automatically.

14         5.  At any time while a civil action is pending

15  pursuant to sub-subparagraph 4.b., the predecessor and

16  successor may file a subsequent agreement with the office

17  department in the same manner set forth under alternative

18  sub-subparagraph 4.a. and file a copy of the same along with a

19  withdrawal of the petition or a voluntary dismissal with the

20  court in which the petition was filed or the civil action is

21  pending. Such filing will have the same force and effect as

22  set forth under sub-subparagraph 4.a.; however, it shall be

23  without prejudice to the right of the predecessor or successor

24  to file another agreement that affects such fiduciary

25  relationship under subparagraph 2.

26         6.  Within 30 days after the date on which a fiduciary

27  agreement is filed with the office department under

28  subparagraph 2., the office department shall approve the

29  agreement if it finds both that the successor is:

30         a.  Legally authorized to exercise trust powers in this

31  state; and

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 1         b.  Has otherwise met the requirements for the

 2  establishment of a trust service office at the predecessor's

 3  principal place of business or branch.

 4         7.  Upon the effective date of an agreement filed under

 5  subparagraph 2. and regardless of any petition filed or any

 6  civil action pending pursuant to subparagraph 4., the

 7  successor will be deemed substituted for the predecessor as

 8  fiduciary without further authorization of any kind such that

 9  the successor shall succeed to and be substituted for the

10  predecessor as to all fiduciary powers, rights, privileges,

11  duties, and liabilities of the predecessor in its capacity as

12  fiduciary for all estate, trust, guardianship, agency, and

13  custodial accounts and any other fiduciary relationship for

14  which the predecessor is then, or but for such agreement would

15  be, serving as fiduciary, except as may be otherwise specified

16  in such agreement and in any subsequent agreement filed with

17  the office department under subparagraph 4. or subparagraph 5.

18  The successor shall also be deemed the fiduciary in all

19  writings, including, but not limited to, wills, trusts, deeds,

20  policies of insurance, stock certificates, court orders, and

21  similar documents and instruments which name or have named the

22  predecessor as fiduciary and which were signed before or after

23  the effective date of such agreement except as may be

24  otherwise specified in such agreement and any subsequent

25  agreement filed with the office department under subparagraph

26  4. or subparagraph 5. This section does not absolve or

27  discharge any predecessor exercising trust powers from

28  liability arising out of any breach of its fiduciary duties or

29  obligations which occurred before the effective date of such

30  agreement.

31         8.  As used herein:

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 1         a.  Trust companies, banks, or associations are

 2  "affiliated" if they are connected through stock ownership

 3  with a common parent corporation that is a registered

 4  multibank or multiassociation holding company and such parent

 5  owns directly stock that possesses at least 80 percent of the

 6  total voting power of the stock of such trust company, bank,

 7  or association and has a value equal to at least 80 percent of

 8  the total value of the stock of such trust company, bank, or

 9  association.

10         b.  The term "predecessor" refers to an affiliated

11  trust company or affiliated bank's or affiliated association's

12  trust department for the position of which in its trust

13  relations the successor is substituted.

14         c.  The term "successor" refers to an affiliated trust

15  company or affiliated bank's or affiliated association's trust

16  department which is substituted for a predecessor in the

17  predecessor's trust relationships including all powers,

18  duties, and responsibilities associated therewith.

19         (d)  When a trust service office is established at a

20  bank or association that has retained its trust powers in an

21  active status, the trust company or trust department may at

22  any time be substituted as fiduciary as provided in paragraph

23  (b) by filing an election with the office department.  The

24  election to substitute the trust company or trust department

25  for the bank or association as fiduciary must contain the

26  consent of a majority of the stockholders or members entitled

27  to vote on such proposal at a meeting of stockholders or

28  members and of a majority of the board of directors, of the

29  bank or association at which the trust service office has been

30  established.

31  

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 1         (e)  This subsection shall not affect any substitution

 2  of fiduciaries made under former s. 659.061(6) prior to May

 3  31, 1976.

 4         (5)  Nothing in the financial institutions codes shall

 5  be construed to prohibit a person from serving in a dual

 6  capacity as an officer or director of a bank, association, or

 7  credit union at which a trust service office is located and an

 8  officer or director of the trust company or trust department

 9  which has a trust service office at that bank, association, or

10  credit union.

11         (6)  A trust company or trust department may terminate

12  a trust service office only with the prior approval of the

13  office department, which shall only grant its approval after

14  being satisfied that the interests of all beneficiaries of the

15  estates, trusts, and other fiduciary relationships being

16  serviced by the trust company or trust department as fiduciary

17  at that trust service office will be adequately protected.

18  Upon termination of the trust service office, the trust

19  company or trust department shall continue to exercise its

20  fiduciary powers, rights, duties, and privileges as fiduciary

21  of the estates, trusts, and other fiduciary relationships

22  which, at the time of such termination, were being serviced at

23  that trust service office and shall continue to be deemed the

24  named fiduciary of all instruments naming the bank or

25  association as fiduciary which became effective and operative

26  prior to the termination of the trust service office. However,

27  any beneficiary of an estate or trust being serviced at the

28  trust service office at the time of the termination of the

29  trust service office may petition the court of competent

30  jurisdiction in the county where, at the time of such

31  termination, the trust service office was located for removal

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 1  of the trust company or the trust department as fiduciary and

 2  for appointment of a successor fiduciary.  The court shall

 3  grant the petition upon being satisfied that such action is in

 4  the best interests of the beneficiaries of the trust or

 5  estate.

 6         (7)  A trust service office as provided for in this

 7  section is a special service facility and is not a branch or a

 8  branch office of a trust company or a trust department.

 9         Section 1820.  Subsection (2) of section 660.40,

10  Florida Statutes, is amended to read:

11         660.40  Self dealing.--

12         (2)  Assets of a fiduciary account held by a trust

13  company or a trust department shall not be sold or

14  transferred, by loan or otherwise, to the trust company or the

15  bank or association of which the trust department is a part or

16  to its directors, officers, or employees except:

17         (a)  When lawfully authorized by the governing

18  instrument or by court order;

19         (b)  As provided in ss. 660.42-660.45;

20         (c)  With the approval of, or when required by, the

21  office department in order to prevent loss to a fiduciary

22  account in any case where the trust company or the trust

23  department has incurred a liability in the handling of the

24  assets of the fiduciary account.

25         Section 1821.  Section 660.47, Florida Statutes, is

26  amended to read:

27         660.47  Surrender of fiduciary powers.--Any state bank

28  or association which has been granted trust powers and which

29  desires to surrender such rights shall file with the office

30  department a certified copy of the resolution of its board of

31  directors signifying such desire.  Upon receipt of such

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 1  resolution, the office department shall make an investigation,

 2  and when it is satisfied that the trust department has been

 3  discharged from all fiduciary duties which it has undertaken,

 4  it shall issue a certificate to such bank or association

 5  certifying that it is no longer authorized to exercise trust

 6  powers.

 7         Section 1822.  Subsection (1) of section 660.48,

 8  Florida Statutes, is amended to read:

 9         660.48  Receivership or voluntary liquidation.--

10         (1)  If a liquidator or receiver is appointed for a

11  trust company or a state bank or association having a trust

12  department, the liquidator or receiver shall, pursuant to the

13  instructions of the office department and the orders of any

14  court and the federal regulatory agency having jurisdiction,

15  proceed to close such fiduciary accounts as can be closed

16  promptly and transfer all other fiduciary accounts to

17  substitute fiduciaries.

18         Section 1823.  Subsection (1) of section 663.02,

19  Florida Statutes, is amended to read:

20         663.02  Applicability of state banking laws.--

21         (1)  International banking corporations having offices

22  in this state shall be subject to all the provisions of the

23  financial institutions codes and chapter 655 as though such

24  international banking corporations were state banks, except

25  where it may appear, from the context or otherwise, that such

26  provisions are clearly applicable only to banks or trust

27  companies organized under the laws of this state or the United

28  States.  Without limiting the foregoing general provisions, it

29  is the intent of the Legislature that the following provisions

30  shall be applicable to such banks or corporations: s. 655.031,

31  relating to administrative enforcement guidelines; s. 655.032,

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 1  relating to investigations, subpoenas, hearings, and

 2  witnesses; s. 655.0321, relating to hearings, proceedings, and

 3  related documents and restricted access thereto; s. 655.033,

 4  relating to cease and desist orders; s. 655.037, relating to

 5  removal by the office department of an officer, director,

 6  committee member, employee, or other person; s. 655.041,

 7  relating to administrative fines and enforcement; and s.

 8  658.49, relating to loans by banks not exceeding $50,000.

 9  International banking corporations shall not have the powers

10  conferred on domestic banks by the provisions of s. 658.60,

11  relating to deposits of public funds. International banking

12  corporations shall not be subject to the provisions of s.

13  658.68, relating to liquidity.  The provisions of chapter 687,

14  relating to interest and usury, shall apply to all loans not

15  subject to s. 658.49.

16         Section 1824.  Subsections (2), (3), and (4) of section

17  663.04, Florida Statutes, are amended to read:

18         663.04  Requirements for carrying on banking

19  business.--No international banking corporation shall transact

20  a banking business, or maintain in this state any office for

21  carrying on such business, or any part thereof, unless such

22  corporation has:

23         (2)  Furnished to the office department such proof as

24  to the nature and character of its business and as to its

25  financial condition as the commission or office requires

26  department may require.

27         (3)  Filed with the office department a certified copy

28  of that information required to be supplied to the Department

29  of State by those provisions of chapter 607 which are

30  applicable to foreign corporations.

31  

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 1         (4)  Received a license duly issued to it by the office

 2  department.

 3         Section 1825.  Subsections (1), (2), (3), (4), (5),

 4  (6), and (9) of section 663.05, Florida Statutes, are amended

 5  to read:

 6         663.05  Application for license; approval or

 7  disapproval.--

 8         (1)  Every international banking corporation, before

 9  being licensed by the office department to maintain any office

10  in this state, shall subscribe and acknowledge, and submit to

11  the office department, an application which shall contain:

12         (a)  The name of the international banking corporation.

13         (b)  The proposed location by street and post office

14  address and county where its business is to be transacted in

15  this state and the name of the person who shall be in charge

16  of the business and affairs of the office.

17         (c)  The location where its initial registered office

18  will be located in this state.

19         (d)  The total amount of the capital accounts of the

20  international banking corporation.

21         (e)  A complete and detailed statement of its financial

22  condition as of a date within 180 days prior to the date of

23  such application, except that the office department in its

24  discretion may, when necessary or expedient, accept such

25  statement of financial condition as of a date within 240 days

26  prior to the date of such application.  The office department

27  in its discretion may, when necessary or expedient, require an

28  independent opinion audit or the equivalent satisfactory to

29  the office department.

30         (f)  A listing of any occasion within the preceding

31  10-year period in which either the international banking

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 1  corporation or any of its directors, executive officers, or

 2  principal shareholders has been convicted of, or pled guilty

 3  or nolo contendere to, any offense with respect to which the

 4  penalties include the possibility of imprisonment for 1 year

 5  or more, or to any offense involving money laundering or

 6  otherwise related to the operation of a financial institution.

 7         (2)  The office department shall disallow any illegally

 8  obtained currency, monetary instruments, funds, or other

 9  financial resources from the capitalization requirements of

10  this section, and the existence of such illegally obtained

11  resources shall be grounds for denial of the application for

12  license.

13         (3)  At the time an application is submitted to the

14  office department, the international banking corporation shall

15  also submit a duly authenticated copy of its articles of

16  incorporation and a copy of its bylaws, or an equivalent

17  thereof satisfactory to the office department.  Such

18  corporation shall also submit a certificate issued by the

19  banking or supervisory authority of the country in which the

20  international banking corporation is chartered stating that

21  the international banking corporation is duly organized and

22  licensed and lawfully existing in good standing and listing

23  any instance in which the international banking corporation

24  has been convicted of, or pled guilty or nolo contendere to, a

25  violation of any currency transaction reporting or money

26  laundering law which may exist in that country.

27         (4)  Application shall be made on a form prescribed by

28  the commission department and shall contain such information

29  as the commission or office requires department may require.

30         (5)  The office department may, in its discretion,

31  approve or disapprove the application, but it shall not

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 1  approve the application unless, in its opinion, the applicant

 2  meets each and every requirement of this part and any other

 3  applicable provision of the financial institutions codes.  The

 4  office department shall approve the application only if it has

 5  determined that the directors, executive officers, and

 6  principal shareholders of the international banking

 7  corporation are qualified by reason of their financial

 8  ability, reputation, and integrity and have sufficient banking

 9  and other business experience to indicate that they will

10  manage and direct the affairs of the international banking

11  corporation in a safe, sound, and lawful manner.  In the

12  processing of applications, the time limitations under the

13  Administrative Procedure Act shall not apply as to approval or

14  disapproval of the application.

15         (6)  The office department shall not issue a license to

16  an international banking corporation unless:

17         (a)  It is chartered in a jurisdiction in which any

18  bank having its principal place of business in this state may

19  establish similar facilities or exercise similar powers; or

20         (b)  Federal law permits the appropriate federal

21  regulatory authority to issue a comparable license to the

22  international banking corporation.

23         (9)  The commission department shall establish, by

24  rule, the general principles which shall determine the

25  adequacy of supervision of an international banking

26  corporation's foreign establishments.  These principles shall

27  be based upon the need for cooperative supervisory efforts and

28  consistent regulatory guidelines and shall address, at a

29  minimum, the capital adequacy, asset quality, management,

30  earnings, liquidity, internal controls, audits, and foreign

31  exchange operations and positions of the international banking

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 1  corporation. This subsection shall not require examination by

 2  the home-country regulatory authorities of any office of an

 3  international banking corporation in this state. The

 4  commission department may also establish, by rule, other

 5  standards for approval of an application for a license as

 6  considered necessary to ensure the safe and sound operations

 7  of the international bank office in this state.

 8         Section 1826.  Subsections (2), (3), and (4) of section

 9  663.055, Florida Statutes, are amended to read:

10         663.055  Capital requirements.--

11         (2)  Notwithstanding the provisions of paragraph

12  (1)(a), the office department may approve an application for a

13  license to establish an international bank agency, an

14  international branch, or an international administrative

15  office if:

16         (a)  The international banking corporation is licensed

17  to receive deposits from the general public in the country

18  where it is organized and licensed and to engage in such other

19  activities as are usual in connection with the business of

20  banking in such country;

21         (b)  The office department receives a certificate that

22  is issued by the banking or supervisory authority of the

23  country in which the international banking corporation is

24  organized and licensed and states that the international

25  banking corporation is duly organized and licensed and

26  lawfully existing in good standing, and is empowered to

27  conduct a banking business; and

28         (c)  The international banking corporation has been in

29  the business of banking for at least 10 years and is ranked by

30  the banking or supervisory authority of the country in which

31  it is organized and licensed as one of the five largest banks

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 1  in that country in terms of domestic deposits, as of the date

 2  of its most recent statement of financial condition.  However,

 3  in no event shall the office department approve an application

 4  under this subsection for any international banking

 5  corporation with capital accounts of less than $10 million.

 6         (3)  The office department may specify such other

 7  conditions as it determines appropriate, considering the

 8  public interest, the need to maintain a sound and competitive

 9  banking system, and the preservation of an environment

10  conducive to the conduct of an international banking business

11  in this state.  In translating the capital accounts of an

12  international banking corporation, the office department may

13  consider monetary corrections accounts that reflect results

14  consistent with the requirements of generally accepted

15  accounting principles in the United States.

16         (4)  For the purpose of this part, the capital accounts

17  of an international banking corporation shall be determined in

18  accordance with rules adopted by the commission department.

19  In adopting such rules, the commission department shall

20  consider similar rules adopted by bank regulatory agencies in

21  the United States and the need to provide reasonably

22  consistent regulatory requirements for international banking

23  corporations which will maintain the safe and sound condition

24  of international banking corporations doing business in this

25  state.

26         Section 1827.  Subsections (1), (2), (3), and (4) of

27  section 663.06, Florida Statutes, are amended to read:

28         663.06  Licenses; permissible activities.--

29         (1)  An international banking corporation licensed to

30  operate an office in this state may engage in the business

31  authorized by this part at the office specified in such

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 1  license for an indefinite period. An international banking

 2  corporation may operate more than one international bank

 3  agency, international branch, or international representative

 4  office, each at a different place of business, provided that

 5  each office shall be separately licensed. No license to

 6  operate an international bank office is transferable or

 7  assignable.  However, the location of an international bank

 8  office may be changed after notification of the office

 9  department.  Every such license shall be, at all times,

10  conspicuously displayed in the place of business specified

11  therein.

12         (2)  An international banking corporation which

13  proposes to terminate the operations of its international bank

14  agency, international branch, international representative

15  office, or international administrative office shall surrender

16  its license to the office department and comply with such

17  procedures as the commission department may prescribe by rule.

18         (3)  An international bank agency, international

19  branch, international representative office, or international

20  administrative office license may be suspended or revoked by

21  the office department, with or without examination, upon its

22  determination that the international banking corporation does

23  not meet all requirements for original licensing. The

24  commission department may by rule prescribe additional

25  conditions or standards under which the license of an

26  international bank agency, international branch, international

27  representative office, or international administrative office

28  may be suspended or revoked.

29         (4)  In the event any such license is surrendered by

30  the international banking corporation or is suspended or

31  revoked by the office department, all rights and privileges of

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 1  the international banking corporation to transact the business

 2  thus licensed shall cease. The commission department shall, by

 3  rule, prescribe procedures for the surrender of a license and

 4  for the orderly cessation of business by an international

 5  banking corporation in a manner which is not harmful to the

 6  interests of its customers or of the public.

 7         Section 1828.  Section 663.061, Florida Statutes, is

 8  amended to read:

 9         663.061  International bank agencies; permissible

10  activities.--

11         (1)  An international bank agency licensed under this

12  part may make any loan, extension of credit, or investment

13  which it could make if incorporated and operating as a bank

14  organized under the laws of this state.  An international bank

15  agency may act as custodian and may furnish investment

16  management, and investment advisory services authorized under

17  rules adopted by the commission department, to nonresident

18  entities or persons whose principal places of business or

19  domicile are outside the United States and to resident

20  entities or persons with respect to international or foreign

21  investments.  An international banking corporation which has

22  an international bank agency licensed under the terms of this

23  part shall be exempt from the registration requirements of s.

24  517.12.

25         (2)  An international bank agency may not receive

26  deposits in this state except:

27         (a)  Deposits from nonresident entities or persons

28  whose principal places of business or domicile are outside the

29  United States.

30         (b)  Interbank deposits; interbank borrowing, or

31  similar interbank obligations.

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 1         (c)  International banking facility deposits as defined

 2  pursuant to s. 655.071.  An international bank agency may

 3  maintain in this state, for the account of others, credit

 4  balances necessarily incidental to, or arising out of, the

 5  exercise of its lawful powers.  Such credit balances may be

 6  disbursed by check or other draft; however, the commission

 7  department shall, by rule, provide appropriate limitations

 8  upon third-party disbursements to ensure that credit balances

 9  are not functionally equivalent to demand deposits.  In

10  establishing the limitations, the commission department may

11  provide that such disbursement may not exceed an average of 20

12  checks or drafts per day.

13         (3)  Notwithstanding any provision of this chapter or

14  chapter 658 to the contrary, an international banking

15  corporation licensed under this part to operate an

16  international bank agency may, if authorized by rule of the

17  commission department, make any loan or investment or exercise

18  any power which it could make or exercise if it were operating

19  in this state as a federal agency under federal law.  The

20  commission department shall, when adopting promulgating such

21  rules, consider the public interest and convenience and the

22  need to maintain a sound and competitive state banking system.

23  Unless otherwise provided by statute, an international bank

24  agency may not exercise any powers that a federal agency is

25  not authorized to exercise.

26         (4)  Notwithstanding the provisions of subsection (1),

27  any international banking corporation organized and existing

28  under the laws of any other state and licensed to operate an

29  international bank agency may engage only in those activities

30  permissible for an Edge Act corporation organized under s.

31  

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 1  25(a) of the Federal Reserve Act, as amended, 12 U.S.C. ss.

 2  611-632.

 3         (5)  With the prior authorization of the office

 4  department pursuant to s. 660.26, an international bank agency

 5  may accept appointments as trustee by nonresident persons or

 6  entities and may exercise trust powers with respect to such

 7  fiduciary accounts. Except for the foregoing limitation, the

 8  trust activities of an international bank agency shall be

 9  subject to the same requirements and may be conducted in the

10  same manner as the trust business of a state trust company or

11  state bank with trust powers.

12         Section 1829.  Section 663.064, Florida Statutes, is

13  amended to read:

14         663.064  International branches; permissible

15  activities; requirements.--An international banking

16  corporation that meets the requirements of ss. 663.04 and

17  663.05 may, with the approval of the office department,

18  establish one or more branches in this state to the extent

19  permitted to banks from other states.  An international branch

20  shall have the same rights and privileges as a federally

21  licensed international branch.  The operations of an

22  international branch shall be conducted pursuant to

23  requirements rules determined by the office department as

24  necessary to ensure compliance with the provisions of the

25  financial institutions codes, including.  These rules shall

26  include requirements for the maintenance of accounts and

27  records separate from those of the international banking

28  corporation of which it is a branch.  An application to

29  establish an international branch shall be made pursuant to s.

30  658.26.

31  

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 1         Section 1830.  Section 663.065, Florida Statutes, is

 2  amended to read:

 3         663.065  State-chartered investment companies;

 4  formation; permissible activities; restrictions.--

 5         (1)  With the approval of the office department, a

 6  Florida corporation may be formed for the purpose of engaging

 7  in international banking, lending, and other financial

 8  activities.  A state-chartered investment company established

 9  pursuant to this section shall engage directly in only those

10  activities permissible for an Edge Act corporation organized

11  under s. 25(a) of the Federal Reserve Act, as amended.

12         (2)  Subject to the prior approval of the office

13  department and to such limitations as the commission

14  prescribes department shall prescribe by rule, a

15  state-chartered investment company may invest in the shares of

16  and may own or control an Edge Act corporation or an

17  international banking corporation and may establish and

18  operate branches, representative offices, and similar banking

19  facilities in foreign countries.

20         (3)  An application for approval to organize a

21  state-chartered investment company shall be subject to the

22  provisions of chapter 655 relating to the organization of de

23  novo financial institutions and to rules adopted by the

24  commission department as necessary to ensure that the proposed

25  state-chartered investment company will be operated in a safe

26  and lawful manner, except that the applicant is not required

27  to become a member of the Federal Reserve System or the

28  Federal Deposit Insurance Corporation. State-chartered

29  investment companies shall be subject to the examination and

30  supervision of the office department and are subject to the

31  

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 1  financial institutions codes to the same extent as

 2  international banking corporations pursuant to s. 663.02.

 3         Section 1831.  Section 663.07, Florida Statutes, is

 4  amended to read:

 5         663.07  Asset maintenance or capital equivalency.--

 6         (1)  Each international bank agency and international

 7  branch shall:

 8         (a)  Maintain with one or more banks in this state, in

 9  such amounts as the office department specifies, evidence of

10  dollar deposits or investment securities of the type that may

11  be held by a state bank for its own account pursuant to s.

12  658.67.  The aggregate amount of dollar deposits and

13  investment securities for an international bank agency or

14  international branch shall, at a minimum, equal the greater

15  of:

16         1.  Four million dollars; or

17         2.  Seven percent of the total liabilities of the

18  international bank agency or international branch excluding

19  accrued expenses and amounts due and other liabilities to

20  affiliated branches, offices, agencies, or entities; or

21         (b)  Maintain other appropriate reserves, taking into

22  consideration the nature of the business being conducted by

23  the international bank agency or international branch.

24  

25  The commission department shall prescribe, by rule, the

26  deposit, safekeeping, pledge, withdrawal, recordkeeping, and

27  other arrangements for funds and securities maintained under

28  this subsection.  The deposits and securities used to satisfy

29  the capital equivalency requirements of this subsection shall

30  be held, to the extent feasible, in one or more state or

31  

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 1  national banks located in this state or in a federal reserve

 2  bank.

 3         (2)  If on the last business day of any month, the

 4  monthly average capital equivalency ratio is less than 7

 5  percent, the international bank agency or international branch

 6  shall increase its deposits or investment securities with a

 7  depository bank within 7 days of the end of the month in which

 8  the deficiency occurred.

 9         (3)  In lieu of the requirements of subsection (1), the

10  commission department may, by rule, permit an international

11  bank agency or international branch to hold, in this state,

12  assets which bear such relationships as the commission

13  department shall by rule prescribes prescribe to the aggregate

14  liabilities of the international bank agency or international

15  branch payable in this state or resulting from its operations.

16  The amount of such assets shall be equal to at least $4

17  million or 107 percent of the amount of such liabilities,

18  whichever is greater; however, the office department by order

19  may reduce the required amount of assets to not less than 100

20  percent of the amount of such liabilities.  When issuing any

21  such order, the office department shall take into account the

22  objective of maintaining a sound banking system in this state.

23  The assets shall be maintained as cash on hand; as deposits or

24  placements with other banks, including the total amount of any

25  reserves deposited at a federal reserve bank; as cash items in

26  process of collection; as earning assets such as federal funds

27  sold, bonds, notes, debentures, drafts, bills of exchange,

28  acceptances, loan participation certificates, or other

29  evidences of indebtedness payable in the United States or in

30  United States funds or in funds freely convertible into United

31  States funds; in such other form as the commission specifies

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 1  department may specify by rule; or in any combination of the

 2  foregoing.

 3         (4)  If on the last business day of any month, the

 4  monthly average asset maintenance ratio is less than 107

 5  percent, the international bank agency or international branch

 6  shall correct the deficiency by accumulating within the first

 7  7 business days of the end of the month sufficient eligible

 8  assets to increase the average eligible assets to 107 percent

 9  of the average liabilities requiring cover.

10         (5)  The term "assets" as used in this section excludes

11  accrued income and amounts due from other offices or branches

12  of, and wholly owned, except for a nominal number of

13  directors' shares, subsidiaries of the international banking

14  corporation in question.  The term "liabilities" as used in

15  this section excludes accrued expenses and amounts due and

16  other liabilities to branches, offices, agencies, and wholly

17  owned, except for a nominal number of directors' shares,

18  subsidiaries of the international banking corporation in

19  question, and such other liabilities as the commission

20  specifies department may specify by rule.  International

21  banking facility deposits, borrowings, and extensions of

22  credit are excluded from the total liabilities and total

23  assets of an international bank agency or international branch

24  unless the office department determines that inclusion of

25  international banking facility deposits, borrowings, and

26  extensions of credit is necessary to ensure the maintenance of

27  a sound financial condition, protect depositors, creditors,

28  and the public interest, and maintain public confidence in the

29  business of the international bank agency or international

30  branch.

31  

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 1         (6)  For the purposes of this section, the office

 2  department shall value marketable securities at book value;

 3  shall have the right to determine the value of any

 4  nonmarketable bond, note, debenture, draft, bill of exchange,

 5  or other evidence of indebtedness or of any other obligation

 6  held by or owed to the international banking corporation in

 7  this state; and, in determining the amount of assets for the

 8  purpose of computing the above ratio of assets to liabilities,

 9  shall have the power to exclude any particular assets.

10         (7)  Notwithstanding the limitations of s. 658.67, the

11  commission department may by rule authorize, and may specify

12  conditions and limits on, the use of securities issued by

13  foreign governments or government-sponsored entities, or by an

14  international banking corporation for the purpose of

15  satisfying the capital equivalency or asset maintenance

16  requirements of this section. However, any such securities

17  shall be payable in funds freely convertible into United

18  States funds, and the amount of such securities deposited or

19  held for the purposes of this section shall not exceed 25

20  percent of the required amount.

21         (8)  Regardless of whether an international bank agency

22  or international branch complies with the requirements of this

23  section pursuant to subsection (1) or subsection (3), if, by

24  reason of the existence, or the potential occurrence, of

25  unusual or extraordinary circumstances, the office department

26  finds it necessary or desirable for maintaining a sound

27  financial condition, protecting creditors and the public

28  interest, and maintaining public confidence in the business of

29  the international bank agency or international branch it may

30  by order require such international bank agency or

31  international branch to deposit cash or eligible securities

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 1  with a bank or trust company located in this state, or to hold

 2  in this state assets acceptable to the office department in an

 3  aggregate amount that bears such relationship as the office

 4  department prescribes to the aggregate liabilities of the

 5  international bank agency or international branch.

 6         (9)  Each international bank agency shall file such

 7  reports with the office department as the commission

 8  department, by rule, requires to determine compliance with the

 9  provisions of this section.

10         Section 1832.  Section 663.08, Florida Statutes, is

11  amended to read:

12         663.08  Certification of capital accounts.--Before

13  opening an office in this state, and annually thereafter so

14  long as a bank office is maintained in this state, an

15  international banking corporation licensed pursuant to ss.

16  663.01-663.14 shall certify to the office department the

17  amount of its capital accounts, expressed in the currency of

18  the jurisdiction of its incorporation.  The dollar equivalent

19  of these amounts, as determined by the office department,

20  shall be deemed to be the amount of its capital accounts.

21         Section 1833.  Subsections (1) and (3) of section

22  663.083, Florida Statutes, are amended to read:

23         663.083  Lending limits.--

24         (1)  The commission department shall by rule prescribe

25  the limits of drafts or bills of exchange which an

26  international bank agency or branch may accept relative to the

27  capital accounts of the international banking corporation.

28  These limits shall take into account all transactions which

29  are included and excluded in computing the lending limit for

30  acceptances of a federal agency in the case of an

31  

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 1  international bank agency, or a federal branch in the case of

 2  an international branch, licensed under federal banking law.

 3         (3)  Any limitation in this section based on the

 4  capital accounts of an international banking corporation shall

 5  refer, with respect to an international bank agency or

 6  international branch in this state, to the dollar equivalent

 7  of the capital accounts of the international banking

 8  corporation, as determined by the office department.  If the

 9  international banking corporation has more than one

10  international bank agency or international branch in this

11  state, the business transacted by all such agencies or

12  branches shall be aggregated in determining compliance with a

13  limitation or restriction in this section.

14         Section 1834.  Section 663.09, Florida Statutes, is

15  amended to read:

16         663.09  Reports; records.--

17         (1)  Every international banking corporation doing

18  business in this state shall, at such times and in such form

19  as the commission prescribes department shall prescribe, make

20  written reports in the English language to the office

21  department, under the oath of one of its officers, managers,

22  or agents transacting business in this state, showing the

23  amount of its assets and liabilities and containing such other

24  matters as the commission or office requires department shall

25  prescribe.  An international banking corporation that

26  maintains two or more offices may consolidate such information

27  in one report unless the office department otherwise requires

28  for purposes of its supervision of the condition and

29  operations of each such office.  The late filing of such

30  reports shall be subject to the imposition of the

31  administrative fine prescribed by s. 655.045(2)(b).  If any

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 1  such international banking corporation shall fail to make any

 2  such report, as directed by the office department, or if any

 3  such report shall contain any false statement knowingly made,

 4  the same shall be grounds for revocation of the license of the

 5  international banking corporation.

 6         (2)  The international banking corporation of each

 7  state-licensed international bank agency or international

 8  branch shall perform or cause to be performed an audit of such

 9  international bank agency or international branch. The

10  commission department shall, by rule, prescribe the minimum

11  audit procedures including the audit reporting requirements

12  which would satisfy the provisions of this subsection.

13         (3)  Each international banking corporation which

14  operates an office licensed under this part shall cause to be

15  kept, at a location accepted by the office department:

16         (a)  Correct and complete books and records of account

17  of the business operations transacted by such office. All

18  policies and procedures governing the operations of such

19  office, as well as any existing general ledger or subsidiary

20  accounts, shall be maintained in the English language.  The

21  office department may require that any other document not

22  written in the English language which the office department

23  deems necessary for the purposes of its regulatory and

24  supervisory functions be translated into English at the

25  expense of the international banking corporation.

26         (b)  Current copies of the charter and bylaws of the

27  international banking corporation, relative to the operations

28  of the office, and minutes of the proceedings of its

29  directors, officers, or committees relative to the business of

30  the office. Such records shall be kept pursuant to s. 655.91

31  and shall be made available to the office department, upon

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 1  request, at any time during regular business hours of the

 2  office.  Any failure to keep such records as aforesaid or any

 3  refusal to produce such records upon request by the office

 4  department shall be grounds for suspension or revocation of

 5  any license issued under this part.

 6         (4)  In addition to any other reports it may be

 7  required to make, an international banking corporation which

 8  maintains an international bank agency or international branch

 9  in this state shall make reports to the office department in

10  such form and at such times as the commission department

11  prescribes by rule concerning the management, asset quality,

12  capital adequacy, and liquidity of the international banking

13  corporation.

14         Section 1835.  Subsections (1), (2), and (3) of section

15  663.10, Florida Statutes, are amended to read:

16         663.10  Conversion of license.--

17         (1)  An international banking corporation desiring to

18  convert its existing federal agency or federal branch or Edge

19  Act corporation into an international bank agency or

20  international branch, or an Edge Act corporation which desires

21  to convert to a state-chartered investment company shall

22  submit to the office department an application, on a form

23  adopted by the commission and provided by the office the

24  department shall provide, accompanied by a filing fee as

25  prescribed by s. 663.12.  An examination and investigation may

26  be conducted to the extent determined necessary by the office

27  department.  The cost of any such examination shall be paid by

28  the applicant.

29         (2)  Nothing in the laws of this state shall restrict

30  the right of a state-licensed international branch agency,

31  international branch, or international representative office

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 1  or a state-chartered investment company to convert to a

 2  federal license or charter upon compliance with the laws of

 3  the United States. Upon completion of any such conversion, the

 4  state license shall be surrendered to the office department.

 5         (3)  An international banking corporation desiring to

 6  convert any existing international banking office to an

 7  international banking office of a different type shall submit

 8  to the office department an application on a form adopted by

 9  the commission and provided by the office the department shall

10  provide which shall be accompanied by all of the information

11  and documents that are required of applicants for a license of

12  the type being sought together with the filing fee required by

13  s. 663.12.

14         Section 1836.  Section 663.11, Florida Statutes, is

15  amended to read:

16         663.11  Dissolution.--In the event an international

17  banking corporation which is licensed to maintain an office in

18  this state is dissolved, or its authority or existence is

19  otherwise terminated or canceled in the jurisdiction of its

20  incorporation, a certificate of the official who is

21  responsible for records of banking corporations of the

22  jurisdiction of incorporation of such international banking

23  corporation, attesting to the occurrence of any such event, or

24  a certified copy of an order or decree of a court of such

25  jurisdiction, directing the dissolution of such international

26  banking corporation, the termination of its existence, or the

27  cancellation of its authority, shall be delivered by the

28  corporation or its surviving officers and directors to the

29  office department.  The filing of the certificate, order, or

30  decree shall have the same effect as the revocation of the

31  

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 1  license of such international banking corporation as provided

 2  in s. 663.06.

 3         Section 1837.  Section 663.12, Florida Statutes, is

 4  amended to read:

 5         663.12  Fees; assessments; fines.--

 6         (1)  Each application for a license under the

 7  provisions of this part shall be accompanied by a

 8  nonrefundable filing fee payable to the office department in

 9  the following amount:

10         (a)  Ten thousand dollars for establishing a

11  state-chartered investment company.

12         (b)  Ten thousand dollars for establishing an

13  international bank agency or branch.

14         (c)  Five thousand dollars for establishing an

15  international administrative office.

16         (d)  Five thousand dollars for establishing an

17  international representative office.

18         (e)  Two thousand dollars annually for operating an

19  international representative office or international

20  administrative office.

21         (f)  An amount equal to the initial filing fee for an

22  application to convert from one type of license to another.

23  The commission department may increase the filing fee for any

24  type of license to an amount established by rule and

25  calculated in a manner so as to cover the direct and indirect

26  cost of processing such applications.

27         (2)  Each international bank agency, international

28  branch, and state-chartered investment company shall pay to

29  the office department a semiannual assessment, payable on or

30  before January 31 and July 31 of each year, in an amount

31  determined by rule by the commission department and calculated

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 1  in a manner so as to recover the costs of the office

 2  department incurred in connection with the supervision of

 3  international banking activities licensed under this part.

 4  These rules shall provide for uniform rates of assessment for

 5  all licenses of the same type, shall provide for declining

 6  rates of assessment in relation to the total assets of the

 7  licensee held in the state, but shall not, in any event,

 8  provide for rates of assessment which exceed the rate

 9  applicable to state banks pursuant to s. 658.73, unless the

10  rate of assessment would result in a semiannual assessment of

11  less than $1,000.  For the purposes of this subsection, the

12  total assets of an international bank agency, international

13  branch, or state-chartered investment company shall include

14  amounts due the agency or branch or state investment company

15  from other offices, branches, or subsidiaries of the

16  international banking corporations or other corporations of

17  which the agency, branch, or state-chartered investment

18  company is a part or from entities related to that

19  international banking corporation.

20         (3)  Each international banking corporation which

21  maintains an office licensed under the provisions of this part

22  and each state-chartered investment company shall pay to the

23  office department examination fees which shall be determined

24  by the commission department by rule and calculated in a

25  manner so as to be equal to the actual cost of each examiner's

26  participation in the examination, as measured by the

27  examiner's pay scale, plus any other expenses directly

28  incurred in the examination, but in no event shall such fee be

29  less than $200 per day for each examiner participating in the

30  examination.

31  

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 1         (4)  An international bank agency or international

 2  branch shall pay to the office department a fine if the agency

 3  or branch fails to correct any asset maintenance or capital

 4  equivalency deficiency within 7 days following the end of the

 5  month in which the deficiency occurs. The fine shall be equal

 6  to the amount of the asset maintenance or capital equivalency

 7  deficiency at the end of the month in which the deficiency

 8  occurs, multiplied by 500 basis points above the Federal

 9  Reserve Board's daily discount rate at the end of the month in

10  which the deficiency occurred, for each day of the deficiency.

11  The minimum fine shall be $1,000.

12         Section 1838.  Section 663.13, Florida Statutes, is

13  amended to read:

14         663.13  Rules; exemption from statement of estimated

15  regulatory costs requirements.--In addition to any other

16  rulemaking authority it has under the financial institutions

17  codes, the commission may adopt department is authorized to

18  promulgate reasonable rules that which it deems advisable for

19  the administration of international banking corporations under

20  this part, in the interest of protecting depositors,

21  creditors, borrowers, or the public interest and in the

22  interest of maintaining a sound banking system in this state.

23  Because of the difficulty in obtaining economic data with

24  regard to such banks, no statement of estimated regulatory

25  costs shall be required in connection with these rules.

26         Section 1839.  Section 663.14, Florida Statutes, is

27  amended to read:

28         663.14  Foreign travel expenses.--If domestic or

29  foreign travel is deemed necessary by the office department to

30  effectuate the purposes of this part, representatives of the

31  office department shall be reimbursed for actual, reasonable,

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 1  and necessary expenses incurred in such domestic or foreign

 2  travel.

 3         Section 1840.  Subsections (2), (7), and (8) of section

 4  663.16, Florida Statutes, are amended to read:

 5         663.16  Definitions; ss. 663.17-663.181.--As used in

 6  ss. 663.17-663.181, the term:

 7         (2)  "Claims" means debts, obligations, deposits, and

 8  other similar items that the office department takes

 9  possession of pursuant to s. 663.17(1).

10         (7)  "Control" means any person or group of persons

11  acting in concert, directly or indirectly, owning,

12  controlling, or holding the power to vote more than 50 percent

13  of the voting stock of a company, or having the ability in any

14  manner to elect a majority of directors of a corporation, or

15  otherwise exercising a controlling influence over the

16  management and policies of a corporation as determined by the

17  office department.

18         (8)  "Qualified financial contract" means any

19  securities contract, commodity contract, forward contract,

20  including spot and forward foreign exchange, repurchase

21  agreement, swap agreement, or any similar agreement, any

22  option to enter into any such agreement, including any

23  combination of the foregoing, and any master agreement for

24  such agreements. Such master agreement, together with all

25  supplements thereto, shall be treated as one qualified

26  financial contract, provided that such contract, option, or

27  agreement, or combination of contracts, options, or agreements

28  is reflected in the books, accounts, or records of the

29  international banking corporation or a party provides evidence

30  of such agreement.  The commission department may define, by

31  rule, securities contract, commodity contract, forward

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 1  contract, repurchase agreement, or swap agreement, and the

 2  commission, by rule, or the office, by order, may, by rule or

 3  order, determine any other agreement to be a qualified

 4  financial contract for the purpose of this subsection.  The

 5  commission department may prescribe such rules relating to

 6  qualified financial contracts and netting thereof as the

 7  commission department deems appropriate.

 8         Section 1841.  Section 663.17, Florida Statutes, is

 9  amended to read:

10         663.17  Liquidation; possession of business and

11  property; inventory of assets; wages; depositing collected

12  assets; appointing agents; appointment of judges.--

13         (1)  The office department may, at its discretion, take

14  possession of the business and property in this state of any

15  international banking corporation that has been licensed to

16  operate in this state upon finding that the corporation's

17  international bank agency operating in this state has violated

18  any law, has neglected or refused to comply with the terms of

19  a duly issued order of the office department, is insolvent or

20  imminently insolvent, or is transacting business in an

21  unsound, unsafe, or unauthorized manner such that the

22  corporation is threatened with imminent insolvency, or that

23  the corporation is in liquidation at its domicile or

24  elsewhere. Title to such business and property shall vest by

25  operation of law in the office department upon taking

26  possession. Thereafter, the office department shall liquidate

27  or otherwise deal with such business and property in

28  accordance with the provisions of this part, chapter 658, and

29  any other provision relating to the liquidation of banking

30  corporations. The office department may deal with such

31  business and property and prosecute and defend any and all

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 1  actions relating to the liquidation. Only the claims of

 2  creditors of the international banking corporation arising out

 3  of transactions those creditors had with the international

 4  banking corporation's international bank agency or agencies

 5  located in this state shall be accepted by the office

 6  department for payment out of the business and property which

 7  it has taken possession of in this state. Acceptance or

 8  rejection of such claims by the office department shall not

 9  prejudice any creditor's rights to otherwise share in other

10  assets of the international banking corporation. The following

11  claims shall not be accepted by the office department for

12  payment out of the business and property in the office's

13  department's possession in this state:

14         (a)  Claims which would not represent an enforceable

15  legal obligation against an international bank agency if such

16  agency were a separate and independent legal entity.

17         (b)  Amounts due and other liabilities to other

18  offices, agencies, and branches of and affiliates of such

19  international banking corporation.

20         (2)  Whenever all accepted claims, together with

21  interest on such claims, and the expenses of the liquidation

22  have been paid in full or properly provided for, the office

23  department, upon the order of a court of competent

24  jurisdiction, shall transfer the remaining assets to the

25  principal office of such international banking corporation, or

26  to the duly appointed domiciliary liquidator or receiver of

27  such corporation. Dividends and other amounts that remain

28  unclaimed or unpaid and are in the possession of the office

29  department for 6 months after such transfer shall be deposited

30  by the office department as provided by law.

31  

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 1         (3)  When the office department takes possession of the

 2  property and business of any international banking

 3  corporation, the office department shall:

 4         (a)  Give notice of such fact to all corporations,

 5  unincorporated associations, partnerships, governmental

 6  entities, and other entities and individuals known by the

 7  office department to hold any assets of such corporation. No

 8  corporation, unincorporated association, partnership,

 9  governmental entity, or other entity or individual having

10  notice or knowledge that the office department has taken

11  possession of such corporation shall have a lien or charge for

12  any payment, advance, or clearance thereafter made against any

13  of the assets of such corporation for liability thereafter

14  incurred.

15         (b)  Upon written demand of the office department, any

16  corporation, unincorporated association, partnership,

17  governmental entity, or other entity or individual holding

18  assets of such corporation shall deliver such assets to the

19  office department and shall be discharged from liability with

20  respect to any claim upon such assets; provided, such demand

21  shall not affect the right of a secured creditor with a

22  perfected security interest, or other valid lien or security

23  interest enforceable against third parties, to retain

24  collateral, including any right of such secured creditor under

25  any security agreement related to a qualified financial

26  contract to retain collateral and apply such collateral in

27  accordance with the provisions of the financial institutions

28  codes.

29         (c)  Nothing in paragraphs (a) and (b) shall affect any

30  right of setoff permitted under applicable law; provided, in

31  connection with the liquidation of an international bank

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 1  agency of any other international banking corporation pursuant

 2  to this part, no entity or individual may set off the business

 3  and property in this state of an international banking

 4  corporation being liquidated under this subsection, against

 5  the liabilities of such corporation other than those that

 6  arise out of transactions engaged in by such entity or

 7  individual with such international bank agency. For purposes

 8  of this paragraph, liabilities shall be deemed to include, in

 9  the case of qualified financial contracts, the lesser of the

10  two amounts calculated with respect to any such qualified

11  financial contract pursuant to s. 663.172(3), and this

12  paragraph shall not be deemed to authorize setoff except as

13  otherwise permissible under applicable law.

14         (4)  Any international banking corporation of which the

15  office department has taken possession or which is operating

16  under restrictions imposed by duly constituted authority may

17  be permitted to resume business subject to the office's

18  department's discretion and any conditions that which the

19  office department may impose.

20         (5)  After the office department takes possession of

21  and determines to liquidate the property and business of any

22  international banking corporation, the office department shall

23  make an inventory, in duplicate, of the assets of such

24  corporation. One copy of such inventory shall be filed with

25  the in an office of the department and one copy shall be filed

26  with a court of competent jurisdiction in the county in which

27  the principal office of such corporation is located.

28         (6)  Notwithstanding s. 658.84, all wages actually

29  owing to the employees of an international banking corporation

30  for services rendered within 3 months prior to the date

31  possession was taken by the office department, and not

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 1  exceeding $2,000 to each employee, shall be paid prior to the

 2  payment of any other debt or claim, and, in the discretion of

 3  the office department, may be paid as soon as practicable

 4  after taking possession, except that at all times the office

 5  department shall reserve such funds as will, in the office's

 6  department's opinion, be sufficient for the expenses of

 7  administration.

 8         (7)  The office department is authorized, upon taking

 9  possession of any international banking corporation, to

10  liquidate the affairs of such corporation and to do all acts

11  and to make such expenditures as in the office's department's

12  judgment are necessary to conserve the assets and business of

13  the corporation. The office department shall proceed to

14  collect the debts due to the corporation. The office

15  department may, upon an order of a court of competent

16  jurisdiction, sell, assign, compromise, or otherwise dispose

17  of all bad or doubtful debts held by, and compromise claims

18  against, such corporation, other than deposit claims,

19  provided, whenever the principal amount of any such debt or

20  claim owed by or owing to such corporation does not exceed

21  $50,000, the office department may sell, assign, compromise,

22  or otherwise dispose of such debt or claim upon such terms as

23  the office department may deem to be in the best interests of

24  such corporation wherever situated. When the real property of

25  an international banking corporation, to be disposed of

26  pursuant to this subsection, is located in a county in this

27  state other than a county in which an application to the court

28  for leave to dispose is made, the office department shall file

29  a certified copy of the order of such court authorizing such

30  disposal in the office of the clerk of the county in which

31  such real property is located.

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 1         (8)  Moneys collected by the office department in

 2  liquidating an international banking corporation shall be:

 3         (a)  Deposited on demand, time or otherwise, in one or

 4  more banks, associations, or trust companies organized under

 5  the laws of this state and, in the case of insolvency or

 6  voluntary or involuntary liquidation of the depositary, such

 7  deposits shall be entitled to priority of payment equally with

 8  any other priority given under the financial institutions

 9  codes;

10         (b)  Deposited on demand, time or otherwise, in one or

11  more national banks with a principal office located in this

12  state and with total assets exceeding $1 billion; or

13         (c)  Invested in obligations of the United States, or

14  obligation for which the full faith and credit of the United

15  States is pledged to provide for the payment of interest and

16  principal.

17         (9)  The office department may appoint one or more

18  persons as agent or agents to assist in the liquidation of the

19  business and affairs of any international banking corporation

20  in the office's department's possession. The office department

21  shall file a certificate of such appointment in the

22  headquarters of the office one of the department's offices and

23  shall file a certified copy of such certificate with a court

24  of competent jurisdiction in the county in which the principal

25  office of such corporation is located in this state. The

26  office department may employ such counsel and expert

27  assistants under such titles that the office department shall

28  assign to them, and may retain such officers or employees of

29  such corporation as the office department deems necessary in

30  the liquidation and distribution of the corporation's assets.

31  The office department may require such security as it may deem

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 1  proper from the agents and assistants appointed pursuant to

 2  the provisions of this subsection.

 3         (10)  When the office department has taken possession

 4  of and is liquidating the business and property in this state

 5  of any international banking corporation under the provisions

 6  of this part, the office department shall be entitled to the

 7  appointment of a single judge to supervise the liquidation in

 8  the judicial circuit in which the principal office of such

 9  corporation is located. Such judge shall have the power to

10  order expedited or simplified procedures or order a reference

11  whenever necessary to resolve a matter in such liquidation.

12         (11)  The compensation of agents and any other

13  employees appointed by the office department to assist in the

14  liquidation of an international bank agency, the distribution

15  of its assets, or the expenses of supervision, shall be paid

16  out of the assets of the agency in the hands of the office

17  department. Expenses of liquidation and approved claims for

18  fees and assessments due the office department shall be given

19  first priority among unsecured creditors.

20         Section 1842.  Section 663.171, Florida Statutes, is

21  amended to read:

22         663.171  Liquidation; repudiation of contracts.--

23         (1)  Except as otherwise provided in this section, when

24  the office department has taken possession of the business and

25  property in this state of an international banking

26  corporation, the office department may assume or repudiate any

27  contract, including an unexpired lease, of the corporation:

28         (a)  To which such corporation is a party.

29         (b)  The performance of which the office department, in

30  its discretion, determines to be burdensome.

31  

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 1         (c)  The repudiation of which the office department, in

 2  its discretion, determines will promote the orderly

 3  administration of the corporation's affairs.

 4         (2)  After the expiration of 90 days after the date the

 5  office department takes possession of an international banking

 6  corporation, any party to a contract with such corporation may

 7  demand in writing that the office department assume or

 8  repudiate such contract. If the office department has not

 9  assumed or repudiated the contract within 15 calendar days

10  after the date of receipt of such demand, the affected party

11  may bring an action in a court of competent jurisdiction in

12  the county in which the principal office of the corporation is

13  located to obtain an order requiring the office department to

14  assume or repudiate the contract. If the office department has

15  not assumed or repudiated the contract by at least 1 month

16  before the last date for filing claims against the

17  corporation, such contract shall be deemed repudiated.

18         (3)  Notwithstanding subsection (2), with respect to an

19  unexpired lease of the corporation for rental of real property

20  under which the corporation was a lessee, if the office

21  department remains in possession of the leasehold, the office

22  department shall not be required to assume or repudiate such

23  lease and may continue in possession of such leasehold for the

24  remainder of the term of the lease in accordance with the

25  terms of the lease; provided, if the office department later

26  repudiates the lease before the end of the lease term, any

27  amounts that may be due the lessor with respect to such lease

28  shall be calculated as provided by law.

29         (4)  Notwithstanding any other provision of this

30  section relating to liquidating an international banking

31  corporation, the office department shall not assume or

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 1  repudiate any qualified financial contract that the

 2  international bank agency entered into which is subject to a

 3  multibranch or multiagency netting agreement or arrangement

 4  that provides for netting present or future payment

 5  obligations or payment entitlements, including termination or

 6  closeout values relating to the obligations or entitlements,

 7  among the parties to the contract and agreement or arrangement

 8  and the office department may, but shall not be required to,

 9  assume or repudiate any other qualified financial contract an

10  international bank agency entered into; provided, upon the

11  repudiation of any qualified financial contract or the

12  termination or liquidation of any qualified financial contract

13  in accordance with its terms, the liability of the office

14  department under such qualified financial contract shall be

15  determined in accordance with s. 663.172.

16         Section 1843.  Section 663.172, Florida Statutes, is

17  amended to read:

18         663.172  Liability on repudiation or termination of

19  contracts.--

20         (1)  Except as otherwise provided in this section, upon

21  the repudiation or termination of any contract pursuant to s.

22  663.171, the liability of the office department shall be

23  limited to the actual direct compensatory damages of the

24  parties to the contract, determined as of the date the office

25  department took possession of the international banking

26  corporation. The office department shall not be liable for any

27  future wages other than severance payments, to the extent such

28  payments are reasonable standards, or for payments for future

29  service, costs of cover, or any consequential, punitive, or

30  exemplary damages, damages for lost profits or lost

31  opportunity, or damages for pain and suffering.

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 1         (2)  Except as otherwise provided in this section, the

 2  liability of the office department, upon the repudiation of

 3  any qualified financial contract or in connection with the

 4  termination or liquidation of any qualified financial contract

 5  in accordance with the terms of such contract, shall be

 6  limited as provided in subsection (1), except compensatory

 7  damages shall be deemed to include normal and reasonable costs

 8  of cover or other reasonable measures of damages used among

 9  participants in the market for qualified financial contract

10  claims, calculated as of the date of repudiation or the date

11  of the termination of such qualified financial contract in

12  accordance with the terms of the contract. Upon the

13  repudiation of any qualified financial contract or in

14  connection with the termination or liquidation of any

15  qualified financial contract in accordance with the terms of

16  such contract, the office department shall be entitled to

17  damages and such damages shall be paid to the office

18  department upon written demand from the office department to

19  the other party or parties to the contract.

20         (3)  In the case of the liquidation of an international

21  bank agency of an international banking corporation by the

22  office department, with respect to qualified financial

23  contracts subject to netting agreements or arrangements that

24  provide for netting present or future payment obligations or

25  payment entitlements, including termination or closeout values

26  relating to the obligations or entitlements, among the parties

27  to the contracts and agreements or arrangements, the liability

28  of the office department to any party to any such qualified

29  financial contract upon the repudiation or in any connection

30  with the termination or liquidation of such qualified

31  

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 1  financial contract in accordance with the terms of such

 2  contract shall be limited to the lesser of:

 3         (a)  The global net payment obligation; or

 4         (b)  The branch-to-agency or agency-to-agency net

 5  payment obligation.

 6         (4)  The liability of the office department to a party

 7  under this section shall be reduced by any amount otherwise

 8  paid or received by the party with respect to the global net

 9  payment obligation pursuant to such qualified financial

10  contract which, if added to the liability of the office

11  department under subsection (1), would exceed the global net

12  payment obligation. The liability of the office department

13  under this section to a party to a qualified financial

14  contract also shall be reduced by the fair market value or the

15  amount of any proceeds of collateral that secures and has been

16  applied to satisfy the obligations of the international

17  banking corporation to the party pursuant to such qualified

18  financial contract. If netting under the applicable netting

19  agreement or arrangement results in a branch-to-agency net

20  payment entitlement, notwithstanding any provision in any such

21  contract that purports to effect a forfeiture of such

22  entitlement, the office department may make written demand for

23  and shall be entitled to receive from the party to such

24  contract an amount not to exceed the lesser of the global net

25  payment entitlement or the branch-to-agency net payment

26  entitlement.

27         (5)  The liability of a party under this section shall

28  be reduced by any amount otherwise paid to or received by the

29  office department or any other liquidator or receiver of the

30  international banking corporation with respect to the global

31  net payment entitlement pursuant to such qualified financial

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 1  contract which, if added to the liability of the party under

 2  this section, would exceed the global net payments

 3  entitlement. The liability of a party under this section to

 4  the office department pursuant to such qualified financial

 5  contract also shall be reduced by the fair market value of the

 6  amount of any proceeds of the collateral that secures and has

 7  been applied to satisfy the obligations of the party to the

 8  international banking corporation pursuant to such qualified

 9  financial contract.

10         Section 1844.  Section 663.173, Florida Statutes, is

11  amended to read:

12         663.173  Qualified financial contract; net obligation

13  and net entitlement.--A party to a qualified financial

14  contract with an international banking corporation, possession

15  of which has been taken by the office department pursuant to

16  s. 663.17, which party has a perfected security interest in

17  collateral or other valid lien or security interest in

18  collateral enforceable against third parties pursuant to a

19  security arrangement related to such qualified financial

20  contract, may retain all such collateral and, upon repudiation

21  or termination of such qualified financial contract in

22  accordance with the terms of the contract, may apply such

23  collateral in satisfaction of any claims secured by the

24  collateral provided the total amount so applied to such claims

25  shall in no event exceed the global net payment obligation, if

26  any.

27         Section 1845.  Section 663.174, Florida Statutes, is

28  amended to read:

29         663.174  Repudiation; lease, lessee, or lessor; real or

30  personal property.--

31  

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 1         (1)  If the office department repudiates a lease of an

 2  international banking corporation, the real or personal

 3  property under which the corporation was a lessee, the lessor

 4  under such lease shall be entitled to file a claim with the

 5  office department for the lesser of:

 6         (a)  The amount designated as liquidated damages

 7  contained in the lease between the corporation and the lessor;

 8         (b)  The amount equal to 1 year's rent under the terms

 9  of the repudiated lease; or

10         (c)  An amount equal to the rent for the remaining term

11  of the lease.

12         (2)  If the office department repudiates the lease of

13  an international banking corporation for the rental of real

14  property under which the corporation was the lessor and the

15  lease was not in default at the time of the repudiation, the

16  lessee under such lease may:

17         (a)  Treat the lease as terminated by such repudiation

18  and vacate the premises; or

19         (b)  Remain in possession of the leasehold interest for

20  the balance of the term of the lease, and for any renewal or

21  extension of such term that is enforceable by such lessee

22  under applicable noninsolvency law, unless the lessee defaults

23  under the terms of the lease after the date of such

24  repudiation. If the lessee remains in possession of the

25  leasehold interest, the lessee shall continue to pay to the

26  office department the contractual rent pursuant to the terms

27  of the lease after the date of the repudiation of such lease

28  and may offset against such rent payment any damages which may

29  accrue due to nonperformance of any obligation of the

30  corporation under the lease after the date of repudiation.

31  

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 1  The office department shall not be liable to the lessee for

 2  any damages arising after such date as a result of the

 3  repudiation other than the amount of any offset allowed under

 4  this paragraph. Nothing in this subsection prohibits the

 5  office department from entering into a new contract with the

 6  lessee for the rental of the leasehold which was the subject

 7  of the repudiated lease.

 8         (3)  Except as otherwise provided, notwithstanding any

 9  provision in an unexpired lease or other contract or in

10  applicable law, a contract or unexpired lease of an

11  international banking corporation may not be terminated or

12  modified by any party other than the office department without

13  the concurrence of the office department, and any right or

14  obligation under such contract or lease may not be terminated

15  or modified, at any time after the office department has taken

16  possession, solely pursuant to a provision in such contract or

17  lease purporting to allow termination or modification upon the

18  office's department's taking possession or upon the insolvency

19  or liquidation or deterioration of the financial condition of

20  the corporation.

21         (4)  Nothing in this section affects the right of a

22  party to contract with an international banking corporation to

23  seek performance of such contract or damages under such

24  contract in any other jurisdiction; provided, the office

25  department shall not be liable for the performance of such

26  contract or damages under such contract in any other

27  jurisdiction.

28         (5)  The rights granted in this section are in addition

29  to any other rights available to the office department under

30  common law or any other law.

31  

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 1         Section 1846.  Section 663.175, Florida Statutes, is

 2  amended to read:

 3         663.175  Liquidation; continuation, stay, and

 4  injunction.--

 5         (1)  Except as provided in this section, the office's

 6  department's taking of possession of any international banking

 7  corporation and the liquidation of the corporation shall

 8  operate as a stay of and as an injunction against, as of the

 9  date the office department takes possession of the corporation

10  and applicable to all persons or entities:

11         (a)  The commencement or continuation, including the

12  issuance or employment of process, of a judicial,

13  administrative, or other action or proceeding against the

14  corporation that was or could have been commenced before the

15  taking of possession, or to cover a claim against the

16  corporation that arose before the taking of possession.

17         (b)  The enforcement against the corporation, or the

18  business and property of the corporation in this state, of a

19  judgment obtained before the taking of possession.

20         (c)  Any act to obtain possession of property of the

21  corporation or of property from the corporation or to exercise

22  control over property of the corporation.

23         (d)  Any act to create, perfect, or enforce any lien

24  against property of the corporation.

25         (e)  Any act to create, perfect, or enforce against

26  property of the corporation any lien to the extent that such

27  lien secures a claim that arose before the taking of

28  possession.

29         (f)  Any act to collect, assess, or recover a claim

30  against the corporation and the liquidation of the corporation

31  

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 1  does not operate as a stay of or as an injunction against the

 2  claim.

 3         (2)  The office's department's taking of possession of

 4  an international banking corporation and the liquidation of

 5  the corporation does not operate as a stay of or as an

 6  injunction against:

 7         (a)1.  The filing of a claim in the liquidation of the

 8  corporation;

 9         2.  The making of a demand upon the office department

10  to assume or repudiate a contract of the corporation;

11         3.  The exercise of any setoff otherwise permissible

12  under applicable law except limited by s. 663.17;

13         4.  The right of any secured creditor with a perfected

14  security interest or other valid lien or security interest

15  enforceable against third parties to retain collateral,

16  including any right of such secured creditor under any

17  security agreement related to a qualified financial contract

18  as defined in s. 663.17 to retain collateral and to apply such

19  collateral in accordance with s. 663.173;

20         5.  Any automatic termination in accordance with the

21  terms of any qualified financial contract or any right to

22  cause the termination or liquidation of any qualified

23  financial contract, as defined in this part in accordance with

24  the terms of such contract;

25         6.  Any right to offset or net out any termination

26  value, payment amount, or other transfer obligation arising

27  under or in connection with one or more such qualified

28  financial contracts; or

29         7.  The commencement of an action under s. 663.181 or

30  any other action relating to the liquidation of the

31  

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 1  corporation before the court of competent jurisdiction

 2  overseeing the liquidation of the corporation.

 3         (b)  The commencement or continuation of a criminal

 4  action or proceeding against the corporation.

 5         (c)  The commencement or continuation of an action or

 6  proceeding pursuant to a governmental unit's police or

 7  regulatory power.

 8         (d)  The enforcement of a judgment, other than money

 9  judgment, obtained in an action or proceeding by a

10  governmental unit to enforce such governmental unit's police

11  or regulatory power.

12         (e)  The issuance to the corporation by a governmental

13  unit of a notice of tax deficiency.

14         (f)  The commencement or continuation of a judicial

15  action or proceeding by a secured creditor with a perfected

16  security interest, or other valid lien or security interest

17  enforceable against third parties, including any right of such

18  secured creditor under any security arrangement related to a

19  qualified financial contract to enforce such interest or lien.

20         (3)  Except as otherwise provided in this section:

21         (a)  The staying or enjoining of an act against

22  property of an international banking corporation under this

23  section shall continue until such property is no longer the

24  property of the office department in possession of the

25  corporation.

26         (b)  The staying or enjoining of any other act under

27  this section shall continue until the office department has

28  concluded liquidating the corporation.

29         (4)  For good cause shown, on request of a party in

30  interest and after notice and hearing, a court of competent

31  jurisdiction overseeing the liquidation of an international

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 1  banking corporation may grant relief from a stay or injunction

 2  provided under this section, including, but not limited to,

 3  terminating, annulling, modifying, or conditioning such stay

 4  or injunction.

 5         (5)  In the case of any willful violation of a stay or

 6  injunction provided in this section by any person who has

 7  knowledge of the office's department's taking of possession of

 8  an international banking corporation that is the subject of

 9  the stay or injunction, the office department shall recover

10  actual damages, including costs and fees and, in appropriate

11  circumstances, may recover punitive damages.

12         Section 1847.  Section 663.176, Florida Statutes, is

13  amended to read:

14         663.176  Liquidation; notice of possession.--When the

15  office department has taken possession of an international

16  banking corporation and has determined to liquidate the

17  corporation's affairs, the office department shall notify all

18  persons who may have claims against the corporation to present

19  such claims to the office department and make proper proof of

20  such claims within 4 months after the date of such notice and

21  at a place specified in the notice; provided, if the office

22  department finds that a shorter period than 4 months will

23  afford a reasonable time for presenting claims and making

24  proof of such claims, the office department may specify such

25  shorter period which shall in no event be less than 30 days.

26  In any event, the office department shall specify in such

27  notice the last day for processing claims and for making proof

28  of such claims. The office department shall cause such notice

29  to be mailed to all persons whose names appear as creditors

30  upon the books of the corporation. Such notice to persons

31  appearing as depositors shall be mailed to the address

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 1  appearing upon the deposit records or ledger of the

 2  corporation. The office department shall also cause such

 3  notice to be published biweekly in such newspaper or

 4  newspapers as the office department may direct in the county

 5  where the principal office of the corporation in the state is

 6  located and, in the office's department's discretion,

 7  elsewhere for publication 3 consecutive months, the first to

 8  be published more than 90 days before the last day fixed in

 9  such notice for presenting proof of claims.  However, if the

10  notice requires claims to be presented within less than 4

11  months, the office department shall cause such notice to be

12  published weekly in such newspaper or newspapers as the office

13  department may direct for 3 consecutive weeks, the first

14  publication to be published more than 21 days before the last

15  day fixed in such notice for presenting claims. Such notice

16  shall specify that all persons having claims for priority of

17  payment shall make demand in writing for priority in the proof

18  of their claims. The office department shall have no power to

19  accept any claim presented after the date specified in such

20  notice as the last date for presenting claims.

21         Section 1848.  Section 663.177, Florida Statutes, is

22  amended to read:

23         663.177  Disposition of property held as bailee or

24  depositary; opening of safe-deposit boxes; disposal of

25  contents.--

26         (1)  The office department may, after it has taken

27  possession of the business and property of an international

28  banking corporation, send a written notice by registered mail

29  to each person claiming, or appearing upon the books of the

30  corporation, to be:

31  

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 1         (a)  The owner of any personal property in the custody

 2  or possession of the corporation, as bailee or depositary for

 3  hire or otherwise, including the contents of any safe, vault,

 4  or box opened after taking possession of such property for

 5  nonpayment of any rent; or

 6         (b)  The lessee of any safe, vault, or box, to such

 7  person's last address appearing on the books of the

 8  international banking corporation or the last known address if

 9  no address appears on such books, notifying such person to

10  remove all such property or the contents of any such safe,

11  vault, or box, within a period stated in such notice which

12  period shall be not less than 60 days after the date of such

13  notice. The contract of bailment or of deposit for hire, or

14  lease of safe, vault, or box, if any, between the person to

15  whom such notice is mailed and the corporation shall cease

16  upon the date for removal fixed in such notice. Such persons

17  shall have a claim against the corporation for the amount of

18  unearned rent or charges, if any, paid by such person from the

19  date fixed in such notice, if the property or contents are

20  removed on or before such date, or from the date of actual

21  removal, if the property or contents are removed after such

22  date.

23         (2)  If such property or contents are not removed, and

24  all rent or storage and other charges accrued up to that time,

25  if any, are not paid, within the time fixed by such notice,

26  the office department may cause such property to be

27  inventoried, or such safe, vault, or box, or any package,

28  parcel, or receptacle in the custody or possession of the

29  corporation as bailee or depositary for hire or otherwise, to

30  be opened and the contents, if any, to be removed and

31  inventoried. Such property or contents shall be sealed by a

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 1  notary public in a package distinctly marked by the office

 2  department with the name of the person in whose name such

 3  property or such safe, vault, box, package, parcel, or

 4  receptacle is recorded upon the books of the corporation, and

 5  a copy of such inventory shall be certified and attached to

 6  such package by such notary public. The package shall be kept

 7  in a place that the office department determines at the

 8  expense and risk of the person in whose name it is recorded

 9  until delivered to such person or until sold, destroyed, or

10  otherwise disposed of. Such package may, pending final

11  disposition of its contents, be opened by the office

12  department for inspection or appraisal or to enable the office

13  department to exercise any powers conferred or duties imposed

14  by this part. Whenever such package is opened, the office

15  department shall endorse on the outside of the package the

16  date of opening and resealing and shall prepare an affidavit

17  which shall be attached to the package showing the reason for

18  opening and the articles, if any, removed from the package or

19  placed or replaced in the package.

20         (3)  At any time prior to the sale, destruction, or

21  other disposition of the contents of the package, the person

22  in whose name the package is recorded may require the delivery

23  of the package upon the payment of all rental or storage

24  charges accrued, and all other charges or expenses paid or

25  incurred to the date of delivery with respect to such package

26  or contents of the package including the cost of inventorying

27  or of opening and inventorying, the fees of the notary public,

28  the cost of preparing and mailing the notice, and advertising,

29  if any.

30         (4)  After the expiration of 1 year after the mailing

31  of the notice required in subsection (1), the office

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 1  department may apply to a court of competent jurisdiction for

 2  an order authorizing the office department to sell, destroy,

 3  or otherwise dispose of the contents of such package.

 4  Whenever, pursuant to the provisions of this subsection, the

 5  office department is given the power to sell the contents of

 6  any package, such power to sell shall be deemed a power to

 7  sell in satisfaction of a lien for nonpayment of rental or

 8  storage charges accrued, and all other charges and expenses

 9  paid or incurred to the date of sale with respect to such

10  package and the contents of the package, including charges and

11  expenses described in subsection (3).

12         (5)  The provisions of this section do not affect or

13  preclude any other remedy, by action or otherwise, for the

14  enforcement of claims or rights of the office department, or

15  of an international banking corporation of which the office

16  department is in possession, against the person in whose name

17  any property or any safe, vault, box, package, parcel, or

18  receptacle is recorded, or affect or bar the right of the

19  office department or the corporation to recover, before sale,

20  any debt or claim due to the office department or the

21  corporation, or, after sale, so much of the debt or claim as

22  is not paid by the proceeds of the sale.

23         Section 1849.  Section 663.178, Florida Statutes, is

24  amended to read:

25         663.178  Claims; valuation; priority; listing; filing;

26  objection; endorsement; adverse interest.--

27         (1)  Proof of claim shall consist of a written

28  statement under oath signed by the claimant or his or her

29  attorney in fact and shall be in such form as the office

30  department requires.

31  

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 1         (2)  The office department shall not accept a claim

 2  based on an agreement with an international banking

 3  corporation unless the agreement is reflected on the accounts,

 4  books, or records of the corporation or a creditor provides

 5  documentary evidence of such agreement. The commission

 6  department may adopt any rules determined necessary to

 7  implement this section.

 8         (3)  No claim or account of any secured claimant or

 9  creditor shall be accepted at a sum greater than the

10  difference between the face value of the claim or account and

11  the value of the security itself as of the commencement of the

12  liquidation unless the claimant or creditor, prior to the

13  expiration of the time fixed by the office department for the

14  presentation of claims, surrenders his or her security to the

15  office department, in which event the claim or account may be

16  accepted in its full face amount.

17         (4)  The office department shall not determine

18  priorities in accepting or rejecting claims and the acceptance

19  by the office department of a claim in which priority of

20  payment is demanded shall not entitle the claimant to

21  priority. Accepted claims in which priority of payment is

22  demanded shall be presented to a court of competent

23  jurisdiction on notice to the claimant for determination as to

24  the priority of payment of such claims. Except as otherwise

25  provided in ss. 663.17-663.181, all claims entitled to

26  priority of payment shall be paid ratably and proportionately.

27         (5)  The office department shall prepare in duplicate a

28  complete list of all claims presented, specifying the name of

29  the claimant, the nature of the claim, and the amount of such

30  claim. Such list shall also contain a statement of accounts

31  payable as shown by the books and records of the corporation

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 1  and as to which no claims have been presented, specifying the

 2  name of each person to whom such account appears to be

 3  payable, the nature of the debt, and the amount of such claim.

 4  Within 60 days after the last date fixed in the notice to

 5  creditors to present and make proof of claims, the office

 6  department shall file one copy of such list in one of its

 7  offices for public inspection and shall file one copy with a

 8  court of competent jurisdiction in the county in which the

 9  principal office of the corporation is located.

10         (6)  Within 40 days after the office department has

11  filed in its headquarters office a copy of the list of claims

12  required by subsection (5), objections to any claim presented

13  or to any account appearing on such list may be made by any

14  party interested by filing such objections with the office

15  department, in writing, signed by the objector, and verified.

16  Unless the office department rejects any claim or accounts to

17  which objections have been filed with it, the office

18  department shall, within 60 days after the time to file such

19  objections has expired, apply to a court of competent

20  jurisdiction, upon notice to the objector, for an order

21  directing the office department as to the disposition of such

22  claim or account. The court may then dispose of such

23  objections or may order a reference for that purpose.

24         (7)  The office department shall, not later than 60

25  days after the time has expired to file objections to claims

26  presented, accept or reject, in whole or in part, every filed

27  claim, except claims as to which objections are still pending

28  before a court, and shall accept or reject, in whole or in

29  part, every account payable as shown by the books and records

30  and as to which no claim has been presented, except accounts

31  as to which objections are still pending before a court.

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 1  Whenever the office department accepts a portion of a claim or

 2  account and rejects the remainder, the portion accepted and

 3  the portion rejected shall, for the purpose of this section,

 4  each be deemed separate claims or accounts.

 5         (8)  Every claim or account payable accepted by the

 6  office department shall be endorsed as "accepted" and be filed

 7  so endorsed. If the office department is unable, from the

 8  books, accounts, or records of an international banking

 9  corporation, to determine the ownership of a claim or account

10  payable or if for any other reason the office department

11  doubts the validity of any claim or account payable, the

12  office department shall reject such claim or account payable

13  and shall endorse the claim or account payable as "rejected"

14  and file it as so endorsed. The office department shall mail

15  notice of such acceptance or rejection within 14 calendar days

16  after the office department has accepted or rejected all

17  claims filed. If a proof of claim has been filed, such notice

18  need be mailed only to the address appearing on such claim

19  and, if no proof of claim has been filed, the notice need be

20  mailed only to the address appearing upon the books of the

21  corporation. If the office department is unable from the proof

22  of claim or the books and records of the corporation to

23  identify a name or address, such notice of rejection need not

24  be given.

25         (9)  Within 30 days after the office department has

26  accepted or rejected all claims filed, and all accounts

27  payable as shown by the books and records as to which no

28  claims have been presented, the office department shall make a

29  list of all such claims and accounts accepted or rejected by

30  the office department for public inspection and file one copy

31  of such list with the in an office of the department and one

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 1  copy with a court of competent jurisdiction in the county in

 2  which the principal Florida office of such corporation is

 3  located.

 4         (10)  When the office department has accepted a filed

 5  claim and has filed such claim, endorsed as "accepted," the

 6  claimant, unless priority of payment has been demanded and

 7  such claim is entitled by law to priority of payment, shall be

 8  entitled to share ratably with other general creditors in the

 9  distribution of the proceeds of the liquidation of the assets

10  of the international banking corporation; provided, any

11  accepted claim or claims for taxes owed to any taxing

12  authority shall be paid in full, to the extent that assets of

13  the corporation are available, prior to the payment of any

14  other accepted claim pursuant to this section. If the claimant

15  has demanded priority of payment, the receipt and acceptance

16  of ratable dividends shall be without prejudice to the right

17  of such priority of payment.

18         (11)  Any person who fails to demand in writing

19  priority of payment as specified in the notice to file claims

20  shall be deemed to have waived and abandoned any right to such

21  priority of payment. Any person who fails to demand in writing

22  priority of payment as provided in this section is not

23  entitled to maintain any action or proceeding for any priority

24  of payment. In any action or proceeding for priority of

25  payment, the claimant shall allege and prove that the claim

26  upon which the action is instituted was filed and demand for

27  priority of payment was made in writing.

28         (12)  Within 6 months after the date the office

29  department files the list of claims and accounts payable which

30  are accepted or rejected by the office department, a claimant

31  whose claim has been filed and has not been accepted by the

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 1  office department, or any person whose account payable as

 2  shown by the books and records as to which no claim has been

 3  presented, has not been accepted by the office department, may

 4  institute and maintain an action against the international

 5  banking corporation. Such action may be maintained only in a

 6  court of competent jurisdiction in the county in which the

 7  principal Florida office of such international banking

 8  corporation is located.

 9         (13)  A lien shall not attach to any property or assets

10  of an international banking corporation as a result of any

11  judicial process after the office department has taken

12  possession of the assets of the corporation.

13         (14)  No action shall be maintained against an

14  international banking corporation while the office department

15  is in possession of the affairs and business of the

16  corporation unless brought within the period of limitation

17  specified in s. 663.17. In any action instituted against such

18  corporation while the office department is in possession of

19  the corporation's property and business, the plaintiff shall

20  be required to allege and prove that the claim upon which the

21  action is instituted was filed and that such claim has not

22  been accepted or, in the case of an action upon an account as

23  to which no claim has been presented, the plaintiff shall be

24  required to allege and prove that such account appeared upon

25  the books and records and that such account has not been

26  accepted.

27         (15)  Notice to the office department of an adverse

28  interest in a claim or account payable accepted by the office

29  department to the credit of any person shall not require the

30  office department to recognize such adverse claimant unless

31  the adverse claimant also:

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 1         (a)  Procures a restraining order, injunction, or other

 2  appropriate process against the office department from a court

 3  of competent jurisdiction in a cause instituted by the office

 4  department in which the person to whose credit such claim or

 5  account payable was accepted or his or her executor or

 6  administrator is made a party and served with summons; or

 7         (b)  Executes to the office department, in a form and

 8  with sureties acceptable to the office department, a bond

 9  indemnifying the office department from any and all liability,

10  loss, damage, cost, and expenses for and on account of the

11  payment of dividends.

12         (16)  In any action or proceeding against the office

13  department to recover dividends accepted, if there is any

14  person who is not a party to the action who makes such a

15  claim, the court in which the action or proceeding is pending

16  may, on the motion of the office department, make an order

17  amending the proceedings making such person a party to such

18  action or proceeding and the court shall thereafter proceed to

19  determine the rights and interests of the parties to such

20  funds. The remedy provided in this section is in addition to

21  and not exclusive of that provided in any other interpleader.

22         Section 1850.  Section 663.18, Florida Statutes, is

23  amended to read:

24         663.18  Fees.--The office department is not required to

25  pay any fee to any clerk, sheriff, register, or other public

26  officer for entering, filing, docketing, registering,

27  recording, executing, or issuing a copy, transcript, extract,

28  or certificate of, or authenticating or exemplifying, any

29  paper, record, or instrument pertaining to the exercise by the

30  office department of any powers conferred or duties imposed

31  upon the office department by the provisions of this part,

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 1  whether or not such paper, record, or instrument is executed

 2  by the office department and whether or not it is connected

 3  with an action. The term "action" is construed as including a

 4  special proceeding in any action.

 5         Section 1851.  Section 663.181, Florida Statutes, is

 6  amended to read:

 7         663.181  Manner and time within which taking possession

 8  may be tested.--At any time within 10 days after the office

 9  department has taken possession of the property and business

10  of an international banking corporation, such corporation may

11  apply to a court of competent jurisdiction in the county in

12  which its principal office is located in this state for an

13  order requiring the office department to show cause why the

14  office department should not be enjoined from continuing such

15  possession. The court may, upon good cause shown, direct the

16  office department to refrain from such proceedings and to

17  surrender such possession.

18         Section 1852.  Paragraph (c) of subsection (1) of

19  section 663.301, Florida Statutes, is amended to read:

20         663.301  Definitions.--

21         (1)  As used in this part:

22         (c)  "Regional development bank" means a for-profit

23  banking institution:

24         1.  Which is listed in the International Monetary

25  Fund's Directory of Regional Economic Organizations and

26  Intergovernmental Commodity and Development Organizations;

27         2.  Which is otherwise afforded special privileges,

28  including favorable tax treatment, under the laws of the

29  jurisdiction in which it is organized;

30  

31  

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 1         3.  Which has as its principal objective the extending

 2  of credit for international development purposes including

 3  short-term financial transactions; and

 4         4.  Which has at least 50 percent of its shares of

 5  voting stock owned by central banks or other government-owned

 6  financial institutions from at least five foreign countries

 7  and one or more financing affiliates of the International Bank

 8  for Reconstruction and Development, or which satisfies such

 9  other ownership requirements as the commission department may

10  specify by rule.  When adopting any such rule, the commission

11  department shall take into account the objective of ensuring

12  the multinational control of international development banks.

13         Section 1853.  Paragraph (a) of subsection (1) of

14  section 663.302, Florida Statutes, is amended to read:

15         663.302  Applicability of state banking laws.--

16         (1)(a)  International development banks shall be

17  subject to the following provisions of chapter 655 as though

18  such international development banks were state banks:

19         1.  Section 655.005, relating to definitions.

20         2.  Section 655.012, relating to general supervisory

21  powers of the office department.

22         3.  Section 655.016, relating to liability.

23         4.  Section 655.031, relating to administrative

24  enforcement guidelines.

25         5.  Section 655.032, relating to investigations; etc.

26         6.  Section 655.0321, relating to hearings and

27  proceedings.

28         7.  Section 655.033, relating to cease and desist

29  orders.

30         8.  Section 655.034, relating to injunctions.

31  

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 1         9.  Section 655.037, relating to removal of financial

 2  institution-affiliated party.

 3         10.  Section 655.041, relating to administrative fines.

 4         11.  Section 655.043, relating to articles of

 5  incorporation.

 6         12.  Section 655.044, relating to accounting practices.

 7         13.  Section 655.045, relating to examinations,

 8  reports, and internal audits.

 9         14.  Section 655.049, relating to deposit of fees and

10  assessments.

11         15.  Section 655.057, relating to records.

12         16.  Section 655.071, relating to international banking

13  facilities.

14         17.  Section 655.50, relating to reports of

15  transactions involving currency.

16         Section 1854.  Section 663.303, Florida Statutes, is

17  amended to read:

18         663.303  Creation of an international development

19  bank.--When authorized by the office department as provided

20  herein, a corporation may be formed under the laws of this

21  state for the purpose of becoming an international development

22  bank and engaging in activities authorized by this part.

23         Section 1855.  Section 663.304, Florida Statutes, is

24  amended to read:

25         663.304  Application for authority to organize an

26  international development bank.--

27         (1)  A written application for authority to organize an

28  international development bank shall be filed with the office

29  department by the proposed incorporator and shall include:

30         (a)  The name, residence, and occupation of each

31  incorporator and proposed director.

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 1         (b)  The proposed corporate name and evidence of

 2  reservation of the proposed corporate name with the Department

 3  of State.

 4         (c)  The total initial capital and the number of shares

 5  of capital stock to be authorized.

 6         (d)  The location, by street and post-office address

 7  and county, of the principal office of the proposed

 8  international development bank.

 9         (e)  If known, the name and residence of the proposed

10  president and the proposed chief executive officer, if other

11  than the proposed president.

12         (f)  Such detailed financial, business, and

13  biographical information as the commission or office

14  department may reasonably require for each proposed director

15  and for the proposed president and the proposed chief

16  executive officer, if other than the president.

17         (2)  The application shall be in such form as adopted

18  by the commission and shall contain such additional

19  information as the commission or office department may require

20  and shall be accompanied by a nonrefundable filing fee of

21  $2,500.

22         Section 1856.  Section 663.305, Florida Statutes, is

23  amended to read:

24         663.305  Investigation by the office department.--Upon

25  the filing of an application, the office department shall make

26  an investigation of such matters as it may deem appropriate,

27  including the character, reputation, financial standing,

28  business experience, and business qualifications of the

29  proposed officers and directors.

30         Section 1857.  Section 663.306, Florida Statutes, is

31  amended to read:

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 1         663.306  Decision by office department.--The office

 2  department may, in its discretion, approve or disapprove the

 3  application, but it shall not approve the application unless

 4  it finds that:

 5         (1)  International business in this state will be

 6  promoted by the establishment of the proposed international

 7  development bank.

 8         (2)  The proposed capital structure is adequate, but in

 9  no case may the paid-in capital stock be:

10         (a)  Less than $400,000 in the case of an international

11  development bank organized under chapter 617 as a corporation

12  not for profit; or

13         (b)  The amount required for a state bank in the case

14  of an international development bank organized under chapter

15  607 as a corporation for profit.

16  

17  The office department may disallow any illegally obtained

18  currency, monetary instruments, funds, or other financial

19  resources from the capitalization requirements of this

20  section.

21         (3)  The proposed officers and directors have

22  sufficient experience, ability, standing, and reputation to

23  indicate reasonable promise of successful operation and none

24  of the proposed officers or directors have been convicted of,

25  or pled guilty or nolo contendere to, a violation of s.

26  655.50, relating to the Florida Control of Money Laundering in

27  Financial Institutions Act; chapter 896, relating to offenses

28  related to financial transactions; or any similar state or

29  federal law.

30         (4)  Provision has been made for suitable quarters at

31  the location designated in the application.

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 1         Section 1858.  Subsection (2) of section 663.308,

 2  Florida Statutes, is amended to read:

 3         663.308  Place of transacting business; branches.--

 4         (2)  An international development bank may establish

 5  branches in foreign countries with the approval of the

 6  appropriate governmental authorities in such foreign

 7  countries.  An international development bank shall give the

 8  office department written notice of its intention to establish

 9  a branch in a foreign country at least 30 days prior to the

10  establishment of such branch.

11         Section 1859.  Subsection (1) of section 663.309,

12  Florida Statutes, is amended to read:

13         663.309  Permissible activities; prohibited

14  activities.--

15         (1)  An international development bank shall have the

16  authority:

17         (a)  To make loans or otherwise extend credit to

18  foreign business enterprises and foreign governments and to

19  issue and confirm letters of credit, create bankers

20  acceptances, and provide guarantees for the purpose of

21  providing financing to foreign business enterprises and

22  foreign governments;

23         (b)  To provide financing in connection with

24  import-export transactions to the extent permissible for an

25  Edge Act corporation organized under s. 25(a) of the Federal

26  Reserve Act, as amended, 12 U.S.C. ss. 611-632;

27         (c)  To invest funds as provided in s. 663.315;

28         (d)  To borrow funds as provided in s. 663.316;

29         (e)  To take deposits from financial institutions,

30  foreign not-for-profit foundations, foreign business

31  enterprises, and organizations which qualify under s. 501(c)

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 1  of the Internal Revenue Code and which had at the end of their

 2  last fiscal year no less than $10 million in assets;

 3         (f)  To maintain for the account of others credit

 4  balances necessarily incidental to, or arising out of, the

 5  exercise of its lawful powers.  Such credit balances may be

 6  disbursed by check or draft; however, the commission

 7  department shall by rule provide appropriate limitations upon

 8  such disbursements to ensure that credit balances are not

 9  functionally equivalent to demand deposits;

10         (g)  To exercise such other incidental powers as shall

11  be reasonably necessary to carry out the authority granted in

12  this part.

13         Section 1860.  Subsection (3) of section 663.311,

14  Florida Statutes, is amended to read:

15         663.311  Shares of stock.--

16         (3)  With the approval of the office department, an

17  international development bank may issue less than all of the

18  number of shares of capital stock authorized by its articles

19  of incorporation; provided that such authorized but unissued

20  shares may be issued only to increase the capital of the

21  international development bank with the approval of the office

22  department.

23         Section 1861.  Section 663.312, Florida Statutes, is

24  amended to read:

25         663.312  Changes in capital.--

26         (1)  No international development bank shall reduce its

27  outstanding capital stock without first obtaining the approval

28  of the office department, and such approval shall be withheld

29  if the reduction would cause the outstanding capital stock to

30  be less than the minimum required pursuant to s. 663.306(2) or

31  if the reduction would cause the international development

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 1  bank's capital accounts to be less than the minimum required

 2  by s. 663.316(2).

 3         (2)  An international development bank may, with the

 4  approval of the office department, provide for an increase in

 5  its capital.

 6         Section 1862.  Subsection (2) of section 663.316,

 7  Florida Statutes, is amended to read:

 8         663.316  Borrowing; capital accounts.--

 9         (2)  An international development bank shall have

10  capital accounts in an amount equal to not less than 8 percent

11  of its aggregate deposits.  However, the commission department

12  by rule may increase the required amount of capital accounts

13  to not more than 10 percent of such aggregate deposits.  When

14  adopting promulgating any such rule, the commission department

15  shall take into account the objective of protecting the

16  interests of depositors and of maintaining a sound banking

17  system in this state.

18         Section 1863.  Section 663.319, Florida Statutes. is

19  amended to read:

20         663.319  Rules; exemption from statement of estimated

21  regulatory costs requirements.--In addition to any other

22  rulemaking authority it has under the financial institutions

23  codes, the commission may adopt department is authorized to

24  promulgate rules for the administration of regional

25  development banks.  Because of the difficulty in obtaining

26  economic data with regard to such banks, no statement of

27  estimated regulatory costs shall be required in connection

28  with these rules.

29         Section 1864.  Subsection (6) of section 665.012,

30  Florida Statutes, is amended to read:

31  

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 1         665.012  Definitions.--When used in this chapter, the

 2  following words and phrases have the following meanings,

 3  except to the extent that any such word or phrase specifically

 4  is qualified by its context:

 5         (6)  "Liquid assets" means:

 6         (a)  Cash on hand;

 7         (b)  Cash on deposit in federal home loan banks,

 8  federal reserve banks, state banks performing similar reserve

 9  functions, or financial depository institutions, which is

10  withdrawable upon not more than 30 days' notice and which is

11  not pledged as security for indebtedness, except that any

12  deposits in a financial depository institution under the

13  control or in the possession of any supervisory authority

14  shall not be considered as liquid assets;

15         (c)  Obligations of, or obligations which are fully

16  guaranteed as to principal and interest by, the United States

17  or this state; and

18         (d)  Such other assets as may be approved by the office

19  department which are accepted as liquid assets for federally

20  insured associations by the appropriate federal regulatory

21  agency.

22         Section 1865.  Subsections (4), (24), (35), (38), and

23  (42) of section 665.013, Florida Statutes, are amended to

24  read:

25         665.013  Applicability of chapter 658.--The following

26  sections of chapter 658, relating to banks and trust

27  companies, are applicable to an association to the same extent

28  as if the association were a "bank" operating thereunder:

29         (4)  Section 658.20, relating to investigation by

30  office department.

31  

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 1         (24)  Section 658.43, relating to approval by office

 2  department, valuation of assets; emergency action.

 3         (35)  Section 658.73, relating to fees and assessments.

 4  The commission department shall, by rule, adopt a separate

 5  semiannual fee and semiannual assessment for associations.  In

 6  its determination, the commission department shall consider

 7  the housing finance role of such associations in addition to

 8  the cost of regulation of associations and the collection of

 9  fees from such associations.

10         (38)  Section 658.81, relating to office department

11  action; notice and court confirmation.

12         (42)  Section 658.90, relating to receivers or

13  liquidators under supervision of office department.

14         Section 1866.  Subsections (1) and (2) of section

15  665.0315, Florida Statutes, are amended to read:

16         665.0315  Reorganization, merger, or consolidation with

17  a foreign association.--

18         (1)  An association shall have power to reorganize or

19  merge or consolidate with a foreign association, as defined in

20  s. 665.1001, subject to the approval of the office department.

21         (2)  If the resulting or surviving association is to be

22  a foreign association, the office department shall not approve

23  the proposed transaction unless:

24         (a)  The laws of the state in which the foreign

25  association has its principal place of business permit

26  associations in that state to reorganize, merge, or

27  consolidate with Florida associations in transactions in which

28  the resulting or surviving association is a Florida

29  association; and

30         (b)  The constituent Florida association has been in

31  existence and continuously operating for more than 2 years.

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 1         Section 1867.  Subsections (1), (2), (3), and (5), of

 2  section 665.033, Florida Statutes, are amended to read:

 3         665.033  Conversion of state or federal mutual

 4  association to capital stock association.--

 5         (1)  CONVERSION INTO CAPITAL STOCK ASSOCIATION.--Any

 6  state or federal mutual association may apply to the office

 7  department for permission to convert itself into an

 8  association operated under the provisions of this chapter in

 9  accordance with the following procedures:

10         (a)  The board of directors shall approve a plan of

11  conversion by resolution adopted by a majority vote of all the

12  directors.  The plan shall include, among other terms:

13         1.  Financial statements of the association as of the

14  last day of the month preceding adoption of the plan.

15         2.  Such financial data as may be required to determine

16  compliance with applicable regulatory requirements respecting

17  financial condition.

18         3.  A provision that each savings account holder of the

19  mutual association will receive a withdrawable account in the

20  capital stock association equal in amount to his or her

21  withdrawable account in the mutual association.

22         4.  A provision that each member of record will be

23  entitled to receive rights to purchase voting common stock.

24         5.  Pro forma financial statements of the association

25  as a capital stock association, which shall include data

26  required to determine compliance with applicable regulatory

27  requirements respecting financial condition.

28         6.  With particularity, the business purpose to be

29  accomplished by the conversion.

30         7.  Such other information as the commission requires

31  department may, by rule, require.

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 1         (b)  The plan of conversion shall be executed by a

 2  majority of the board of directors and submitted to the office

 3  department for approval prior to any vote on conversion by the

 4  members.

 5         (c)  The office department may approve or disapprove

 6  the plan in its discretion, but it shall not approve the plan

 7  unless it finds that the association will comply sufficiently

 8  with the requirements of the financial institutions codes

 9  after conversion to entitle it to become an association

10  operating under the financial institutions codes and the rules

11  of the commission department. The office department may deny

12  any application from any federal association that is subject

13  to any cease and desist order or other supervisory restriction

14  or order imposed by any state or the federal supervisory

15  authority, or insurer, or guarantor or that has been convicted

16  of, or pled guilty or nolo contendere to, a violation of s.

17  655.50, relating to the Florida Control of Money Laundering in

18  Financial Institutions Act; chapter 896, relating to offenses

19  related to financial transactions; or any similar state or

20  federal law.

21         (d)  If the office department approves the plan of

22  conversion, the question of such conversion may be submitted

23  to the members at a meeting of voting members called to

24  consider such action.  A vote of 51 percent or more of the

25  total number of votes eligible to be cast, unless federal law

26  permits a lesser percentage of votes for a federal mutual

27  association to convert, in which case that percentage shall

28  control, shall be required for approval.  Notice of the

29  meeting, giving the time, place, and purpose thereof, together

30  with a proxy statement and proxy form covering all matters to

31  be brought before the meeting, shall be mailed at least 30

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 1  days prior thereto to the office department for review and to

 2  each voting member at his or her last address as shown on the

 3  books of the association.

 4         (2)  MINUTES OF MEETING.--Copies of the minutes of the

 5  meeting of members, verified by the affidavit of the secretary

 6  or assistant secretary of the association, shall be filed with

 7  the office department and with the appropriate federal

 8  regulatory agency, within a reasonable time after the meeting.

 9  When so filed, the verified copies of the minutes are

10  presumptive evidence of the holding of the meeting and of the

11  action taken.

12         (3)  FILING OF ARTICLES OF INCORPORATION AND COMMITMENT

13  FOR INSURANCE OF ACCOUNTS.--The directors of the association

14  shall have executed and filed with the office department

15  proposed articles of incorporation as provided for in s.

16  658.23, together with the application for conversion and a

17  firm commitment for, or evidence of, insurance of deposits and

18  other accounts of a withdrawable type.  The articles shall

19  contain a statement that the association resulted from the

20  conversion of a state or federal mutual association to a

21  capital stock association.  Approval by the office department

22  shall be affixed to the articles of incorporation.  An

23  authenticated copy of the articles of incorporation shall be

24  filed with the Department of State and one copy of the

25  articles of incorporation and the certificate of incorporation

26  shall be returned to the association.  The association shall

27  cease to be a mutual association at the time and on the date

28  specified in the approved articles of incorporation.

29         (5)  FEE.--The application for conversion from a state

30  or federal mutual to a state capital stock association shall

31  be accompanied by a nonrefundable filing fee of $7,500.

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 1  Additionally, the office department is authorized to assess

 2  any association, applying to convert pursuant to this section,

 3  a nonrefundable examination fee to cover the actual costs of

 4  any examination required as part of the application process.

 5         Section 1868.  Section 665.0335, Florida Statutes, is

 6  amended to read:

 7         665.0335  Supervisory case; emergency conversion,

 8  reorganization, merger; consolidation; acquisition of

 9  assets.--

10         (1)  The office department may determine that a state

11  or federal association is a supervisory case if it finds that:

12         (a)  The association is in an impaired condition; or

13         (b)  The association is in imminent danger of being in

14  an impaired condition.

15  

16  Any such finding by the office department shall be based upon

17  reports furnished to it by a state or federal savings and loan

18  association examiner or upon other evidence from which it is

19  reasonable to conclude that the association is a supervisory

20  case.

21         (2)  Notwithstanding any other provision of this

22  chapter or chapter 120, if the office department finds that

23  immediate action is necessary to protect the interests of

24  depositors and reduce the potential for claims against the

25  insurance fund, or in order to prevent the probable failure of

26  a state or federal association which is a supervisory case,

27  the office may department shall have the power, with the

28  concurrence of the appropriate federal regulatory agency in

29  the case of any association the deposits of which are

30  federally insured, to issue an emergency order authorizing:

31  

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 1         (a)  The conversion of such association from a state to

 2  a federal charter, or vice versa, without change of business

 3  form;

 4         (b)  The reorganization, merger, or consolidation of

 5  such state or federal association with another state or

 6  federal association;

 7         (c)  The conversion of such state or federal

 8  association into a state or federal capital stock association;

 9  or

10         (d)  Any state or federal association to acquire the

11  assets of, and assume the liabilities of, such failing

12  association.

13         Section 1869.  Paragraphs (a) and (b) of subsection

14  (1), subsection (2), paragraph (e) of subsection (4), and

15  paragraphs (a) and (c) of subsection (5) of section 665.034,

16  Florida Statutes, are amended to read:

17         665.034  Acquisition of assets of or control over an

18  association.--

19         (1)(a)  In any case in which a person or group of

20  persons propose to purchase or acquire voting common stock of

21  any capital stock association, which purchase or acquisition

22  would cause such person or group of persons to have control,

23  as defined herein, of that association, such person or group

24  of persons must first make application to the office

25  department for a certificate of approval of such purchase or

26  acquisition.

27         (b)  An application for control shall be in such form

28  and request such information as the commission requires

29  department may, by rule, require.

30  

31  

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 1         (2)  The office department shall issue the certificate

 2  of approval only after it has made an investigation and

 3  determined that:

 4         (a)  The proposed new owner or owners of voting capital

 5  stock are qualified by character, experience, and financial

 6  responsibility to control the association in a legal and

 7  proper manner and none of the proposed new owners have been

 8  convicted of, or pled guilty or nolo contendere to, a

 9  violation of s. 655.50, relating to the Florida Control of

10  Money Laundering in Financial Institutions Act; chapter 896,

11  relating to offenses related to financial transactions; or any

12  similar state or federal law.

13         (b)  The interests of the public generally will not be

14  jeopardized by the proposed purchase or acquisition of voting

15  capital stock.

16         (4)  For purposes of this section, a person or group of

17  persons shall be deemed to have control of an association if

18  such person or group of persons:

19         (e)  In any case in which a proposed purchase or

20  acquisition of voting securities of an association would give

21  rise to the presumption created under paragraph (d), the

22  person or group of persons who propose to purchase or acquire

23  the voting securities shall first give written notice of the

24  proposal to the office department. Such notice may present

25  information that the proposed purchase or acquisition will not

26  result in control. The office department shall afford the

27  person seeking to rebut the presumption an opportunity to

28  present views in writing or orally before its designated

29  representatives at an informal conference.

30         (5)(a)  A foreign association, as defined in s.

31  665.1001, whether controlled directly or indirectly by another

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 1  business organization, may acquire a Florida association,

 2  subject to approval by the office department.  The office

 3  department shall not approve the proposed acquisition unless:

 4         1.  The laws of the state in which the foreign

 5  association has its principal place of business permit

 6  associations in that state to be acquired by Florida

 7  associations; and

 8         2.  The Florida association which is to be acquired has

 9  been in existence and continuously operating for more than 2

10  years.

11         (c)  A foreign association which has a subsidiary

12  association in Florida is authorized to acquire a Florida

13  association upon approval by the office department pursuant to

14  the laws and rules which are applicable to the acquisition of

15  a Florida association by an association having its principal

16  place of business in this state, but such acquired association

17  shall not be considered a Florida association for purposes of

18  this subsection or s. 665.0315.

19         Section 1870.  Section 665.0345, Florida Statutes, is

20  amended to read:

21         665.0345  Regulatory supervision of foreign

22  associations.--The office may department is authorized to

23  enter into cooperative agreements with other regulatory

24  agencies to facilitate the regulation of foreign associations

25  doing business in this state. The office department may accept

26  reports of examinations and other records from such other

27  agencies in lieu of conducting its own examinations of foreign

28  associations.  The office department may take any action

29  jointly with other regulatory agencies having concurrent

30  jurisdiction over associations doing business in this state or

31  

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 1  may take such actions independently in order to carry out its

 2  responsibilities.

 3         Section 1871.  Section 665.0711, Florida Statutes, is

 4  amended to read:

 5         665.0711  Loans.--As an annual average, based on

 6  monthly computations, at least 50 percent of assets other than

 7  liquid assets of an association shall be invested in either

 8  real estate loans or interests therein on home property or

 9  primarily residential property for terms not in excess of 40

10  years or for such additional terms as may be provided by rule.

11  Recognizing that associations are chartered to serve the

12  convenience and needs of the communities in which they are

13  chartered to do business, that the convenience and needs of

14  communities include the need for credit services as well as

15  deposit services, and that associations have a continuing and

16  affirmative obligation to help meet the credit needs of the

17  local communities in which they are chartered, at least 40

18  percent of the assets required to be invested by this section

19  shall be secured by property within this state, unless a lower

20  percentage is established by the commission or office

21  department pursuant to s. 655.061, except that loans insured

22  or guaranteed in whole or in part by the United States are not

23  subject to this restriction.

24         Section 1872.  Subsection (3) and paragraph (a) of

25  subsection (4) of section 665.1001, Florida Statutes, are

26  amended to read:

27         665.1001  Foreign associations.--

28         (3)  ACTION BY OFFICE DEPARTMENT.--The office

29  department is authorized, empowered, and directed to obtain an

30  injunction or to take any other action necessary to prevent

31  

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 1  any foreign association from doing any business of an

 2  association in this state.

 3         (4)  ACTIVITIES NOT CONSIDERED "DOING BUSINESS."--For

 4  the purposes of this section and any other law of this state

 5  prohibiting, limiting, or regulating the doing of business in

 6  this state by foreign associations or foreign corporations of

 7  any type, any federal association, the principal office of

 8  which is located outside this state, and any foreign

 9  association which is subject to state or federal supervision,

10  or both, which by law are subject to periodic examination by

11  such supervisory authority and to a requirement of periodic

12  audit, shall not be considered to be doing business in this

13  state by reason of engaging in any of the following

14  activities:

15         (a)  The purchase, acquisition, holding, sale,

16  assignment, transfer, collecting, and enforcement of

17  obligations or any interest therein secured by real estate

18  mortgages or other instruments in the nature of a mortgage,

19  covering real property located in this state, or the

20  foreclosure of such instruments, or the acquisition of title

21  to such property by foreclosure, or otherwise, as a result of

22  default under such instruments, or the holding, protection,

23  rental, maintenance, and operation of the property so

24  acquired, or the disposition thereof; provided such

25  associations shall not hold, own, or operate such property for

26  a period exceeding 5 years without securing the approval of

27  the office department.

28         Section 1873.  Paragraph (d) of subsection (5) of

29  section 667.002, Florida Statutes, is amended to read:

30         667.002  Definitions.--Except to the extent

31  specifically qualified by context, when used in this chapter:

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 1         (5)  "Liquid assets" means:

 2         (d)  Such other assets as may be approved by the office

 3  department which are accepted as liquid assets for federally

 4  insured savings banks by the appropriate federal regulatory

 5  agency.

 6         Section 1874.  Subsections (4), (26), (40), and (44) of

 7  section 667.003, Florida Statutes, are amended to read:

 8         667.003  Applicability of chapter 658.--Any state

 9  savings bank is subject to all the provisions, and entitled to

10  all the privileges, of the financial institutions codes except

11  where it appears, from the context or otherwise, that such

12  provisions clearly apply only to banks or trust companies

13  organized under the laws of this state or the United States.

14  Without limiting the foregoing general provisions, it is the

15  intent of the Legislature that the following provisions apply

16  to a savings bank to the same extent as if the savings bank

17  were a "bank" operating under such provisions:

18         (4)  Section 658.20, relating to investigation by

19  office department.

20         (26)  Section 658.43, relating to approval by office

21  department; valuation of assets; emergency action.

22         (40)  Section 658.81, relating to office department

23  action; notice and court confirmation.

24         (44)  Section 658.90, relating to receivers or

25  liquidators under supervision of office department.

26         Section 1875.  Subsections (1) and (2) of section

27  667.005, Florida Statutes, are amended to read:

28         667.005  Reorganization, merger, or consolidation with

29  a foreign savings bank.--

30         (1)  A savings bank shall have the power to reorganize,

31  merge, or consolidate with a foreign savings bank, as defined

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 1  in s. 667.013, subject to the approval of the office

 2  department.

 3         (2)  If the resulting or surviving savings bank is to

 4  be a foreign savings bank, the office department shall not

 5  approve the proposed transaction unless:

 6         (a)  The laws of the state in which the foreign savings

 7  bank has its principal place of business permit savings banks

 8  in that state to reorganize, merge, or consolidate with

 9  Florida savings banks in transactions in which the resulting

10  or surviving savings bank is a Florida savings bank.

11         (b)  The constituent Florida savings bank has been in

12  existence and continuously operating for more than 2 years.

13         Section 1876.  Subsections (1), (2), (3), and (5) of

14  section 667.006, Florida Statutes, are amended to read:

15         667.006  Conversion of state or federal mutual savings

16  bank or state or federal mutual association to capital stock

17  savings bank.--

18         (1)  CONVERSION INTO CAPITAL STOCK SAVINGS BANK.--Any

19  state or federal mutual savings bank or state or federal

20  mutual association may apply to the office department for

21  permission to convert itself into a capital stock savings bank

22  operated under the provisions of this chapter in accordance

23  with the following procedures:

24         (a)  The board of directors shall approve a plan of

25  conversion by resolution adopted by a majority vote of all the

26  directors. The plan shall include, but not be limited to:

27         1.  Financial statements of the savings bank as of the

28  last day of the month preceding adoption of the plan.

29         2.  Such financial data as may be required to determine

30  compliance with applicable regulatory requirements respecting

31  financial condition.

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 1         3.  A provision that each savings account holder of the

 2  mutual savings bank will receive a withdrawable account in the

 3  capital stock savings bank equal in amount to his or her

 4  withdrawable account in the mutual savings bank.

 5         4.  A provision that each member of record will be

 6  entitled to receive rights to purchase voting common stock.

 7         5.  Pro forma financial statements of the savings bank

 8  as a capital stock savings bank, which shall include data

 9  required to determine compliance with applicable regulatory

10  requirements respecting financial condition.

11         6.  With particularity, the business purpose to be

12  accomplished by the conversion.

13         7.  Such other information as the commission requires

14  department may require by rule.

15         (b)  The plan of conversion shall be executed by a

16  majority of the board of directors and submitted to the office

17  department for approval prior to any vote on conversion by the

18  members.

19         (c)  The office department may approve or disapprove

20  the plan in its discretion, but it shall not approve the plan

21  unless it finds that the savings bank will comply sufficiently

22  with the requirements of the financial institutions codes

23  after conversion to entitle it to become a savings bank

24  operating under the financial institutions codes and the rules

25  of the commission department. The office department may deny

26  any application from any federal savings bank that is subject

27  to any cease and desist order or other supervisory restriction

28  or order imposed by any state or the federal supervisory

29  authority, or insurer, or guarantor or that has been convicted

30  of, or pled guilty or nolo contendere to, a violation of s.

31  655.50, relating to the Florida Control of Money Laundering in

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 1  Financial Institutions Act; chapter 896, relating to offenses

 2  related to financial transactions; or any similar state or

 3  federal law.

 4         (d)  If the office department approves the plan of

 5  conversion, the question of such conversion may be submitted

 6  to the members at a meeting of voting members called to

 7  consider such action. A vote of 51 percent or more of the

 8  total number of votes eligible to be cast shall be required

 9  for approval, unless federal law permits a lesser percentage

10  of votes for a federal mutual savings bank to convert, in

11  which case that percentage shall control.  Notice of the

12  meeting, giving the time, place, and purpose thereof, together

13  with a proxy statement and proxy form covering all matters to

14  be brought before the meeting, shall be mailed at least 30

15  days prior to the meeting to the office department for review

16  and to each voting member at his or her last address as shown

17  on the books of the savings bank.

18         (2)  MINUTES OF MEETING.--Copies of the minutes of the

19  meeting of members, verified by the affidavit of the secretary

20  or assistant secretary of the savings bank, shall be filed

21  with the office department and with the appropriate federal

22  regulatory agency, within a reasonable time after the meeting.

23  When so filed, the verified copies of the minutes are

24  presumptive evidence of the holding of the meeting and of the

25  action taken.

26         (3)  FILING OF ARTICLES OF INCORPORATION AND COMMITMENT

27  FOR INSURANCE OF ACCOUNTS.--The directors of the savings bank

28  shall have executed and filed with the office department

29  proposed articles of incorporation as provided in s. 658.23,

30  together with the application for conversion and a firm

31  commitment for, or evidence of, insurance of deposits and

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 1  other accounts of a withdrawable type. The articles shall

 2  contain a statement that the savings bank resulted from the

 3  conversion of a state or federal mutual savings bank to a

 4  capital stock savings bank. Approval by the office department

 5  shall be affixed to the articles of incorporation. A copy of

 6  the articles of incorporation shall be filed with the

 7  Department of State, and one copy of the articles of

 8  incorporation and the certificate of incorporation shall be

 9  returned to the savings bank. The savings bank shall cease to

10  be a mutual savings bank at the time and on the date specified

11  in the approved articles of incorporation.

12         (5)  FEE.--The application for conversion from a state

13  or federal mutual to a state capital stock savings bank shall

14  be accompanied by a nonrefundable filing fee of $7,500.

15  Additionally, the office may department is authorized to

16  assess any savings bank applying to convert pursuant to this

17  section a nonrefundable examination fee to cover the actual

18  costs of any examination required as part of the application

19  process.

20         Section 1877.  Section 667.007, Florida Statutes, is

21  amended to read:

22         667.007  Supervisory case; emergency conversion,

23  reorganization, merger; consolidation; acquisition of

24  assets.--

25         (1)  The office department may determine that a state

26  or federal savings bank is a supervisory case if it finds

27  that:

28         (a)  The savings bank is insolvent; or

29         (b)  The savings bank is imminently insolvent.

30  

31  

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 1  Any such finding by the office department shall be based upon

 2  reports furnished to it by a state or federal regulatory

 3  agency or upon other evidence from which it is reasonable to

 4  conclude that the savings bank is a supervisory case.

 5         (2)  Notwithstanding any other provision of this

 6  chapter or chapter 120, if the office department finds that

 7  immediate action is necessary to protect the interests of

 8  depositors and reduce the potential for claims against the

 9  insurance fund, or in order to prevent the probable failure of

10  a state or federal savings bank which is a supervisory case,

11  the office may department shall have the power, with the

12  concurrence of the appropriate federal regulatory agency in

13  the case of any savings bank the deposits of which are

14  federally insured, to issue an emergency order authorizing:

15         (a)  The conversion of such savings bank from a state

16  to a federal charter, or vice versa, without change of

17  business form;

18         (b)  The reorganization, merger, or consolidation of

19  such state or federal savings bank with another state or

20  federal savings bank;

21         (c)  The conversion of such state or federal savings

22  bank into a state or federal capital stock savings bank; or

23         (d)  Any state or federal savings bank to acquire the

24  assets of, and assume the liabilities of, such failing savings

25  bank.

26         Section 1878.  Subsections (1) and (2), paragraph (d)

27  of subsection (4), and paragraph (a) of subsection (5) of

28  section 667.008, Florida Statutes, are amended to read:

29         667.008  Acquisition of assets of or control over a

30  savings bank.--

31  

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 1         (1)(a)  In any case in which a person or group of

 2  persons proposes to purchase or acquire voting common stock of

 3  any capital stock savings bank, which purchase or acquisition

 4  would cause such person or group of persons to have control,

 5  as defined herein, of that savings bank, such person or group

 6  of persons must first make application to the office

 7  department for a certificate of approval of such purchase or

 8  acquisition.

 9         (b)  An application for control shall be in such form

10  and request such information as the commission requires

11  department may require by rule.

12         (c)  The application for control shall be accompanied

13  by a nonrefundable filing fee of $7,500; however, if more than

14  one savings bank is being acquired in any such application,

15  the fee shall be increased by $3,000 for each additional

16  savings bank.

17         (2)  The office department shall issue the certificate

18  of approval only after it has made an investigation and

19  determined that:

20         (a)  The proposed new owner or owners of voting capital

21  stock are qualified by character, experience, and financial

22  responsibility to control the savings bank in a legal and

23  proper manner and none of the proposed new owners have been

24  convicted of, or pled guilty or nolo contendere to, a

25  violation of s. 655.50, relating to the Florida Control of

26  Money Laundering in Financial Institutions Act; chapter 896,

27  relating to offenses related to financial transactions; or any

28  similar state or federal law.

29         (b)  The interests of the public generally will not be

30  jeopardized by the proposed purchase or acquisition of voting

31  capital stock.

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 1         (4)  For purposes of this section, a person or group of

 2  persons shall be deemed to have control of a savings bank if

 3  such person or group of persons:

 4         (d)  Owns, controls, or has power to vote 10 percent or

 5  more of any class of voting securities of the savings bank, if

 6  no other person or group of persons owns, controls, or has

 7  power to vote a greater proportion of that class of voting

 8  securities.  In any case in which a proposed purchase or

 9  acquisition of voting securities of a savings bank would give

10  rise to the presumption created under this paragraph, the

11  person or group of persons who proposes to purchase or acquire

12  the voting securities shall first give written notice of the

13  proposal to the office department. Such notice may present

14  information that the proposed purchase or acquisition will not

15  result in control. The office department shall afford the

16  person seeking to rebut the presumption an opportunity to

17  present views in writing or orally before its designated

18  representatives at an informal conference.

19         (5)(a)  A foreign savings bank, as defined in s.

20  667.013, whether controlled directly or indirectly by another

21  business organization, may acquire a Florida savings bank,

22  subject to approval by the office department. The office

23  department shall not approve the proposed acquisition unless:

24         1.  The laws of the state in which the foreign savings

25  bank has its principal place of business permit savings banks

26  in that state to be acquired by Florida savings banks.

27         2.  The Florida savings bank which is to be acquired

28  has been in existence and continuously operating for more than

29  2 years.

30  

31  

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 1         Section 1879.  Subsection (2) and paragraph (a) of

 2  subsection (3) of section 667.013, Florida Statutes, are

 3  amended to read:

 4         667.013  Foreign savings banks.--

 5         (2)  ACTION BY OFFICE DEPARTMENT.--The office

 6  department is authorized, empowered, and directed to obtain an

 7  injunction or to take any other action necessary to prevent

 8  any foreign savings bank from unlawfully doing any business of

 9  a savings bank in this state.

10         (3)  ACTIVITIES NOT CONSIDERED "DOING BUSINESS."--For

11  the purposes of this section and any other law of this state

12  prohibiting, limiting, or regulating the doing of business in

13  this state by foreign savings banks or foreign corporations of

14  any type, any federal savings bank, the principal office of

15  which is located outside this state, and any foreign savings

16  bank which is subject to state or federal supervision, or

17  both, which by law are subject to periodic examination by such

18  supervisory authority and to a requirement of periodic audit,

19  shall not be considered to be doing business in this state by

20  reason of engaging in any of the following activities:

21         (a)  The purchase, acquisition, holding, sale,

22  assignment, transfer, collecting, and enforcement of

23  obligations or any interest therein secured by real estate

24  mortgages or other instruments in the nature of a mortgage,

25  covering real property located in this state, or the

26  foreclosure of such instruments, or the acquisition of title

27  to such property by foreclosure, or otherwise, as a result of

28  default under such instruments, or the holding, protection,

29  rental, maintenance, and operation of the property so

30  acquired, or the disposition thereof, provided such savings

31  banks shall not hold, own, or operate such property for a

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 1  period exceeding 5 years without securing the approval of the

 2  office department.

 3         Section 1880.  Subsection (2) of section 687.13,

 4  Florida Statutes, is amended to read:

 5         687.13  International transactions.--

 6         (2)  The provisions of this chapter shall not apply to

 7  any international banking facility "deposit," "borrowing," or

 8  "extension of credit," as those terms are defined by the

 9  commission Department of Banking and Finance pursuant to s.

10  655.071.

11         Section 1881.  Subsection (3) of section 687.14,

12  Florida Statutes, is amended, and subsection (6) is added to

13  that section, to read:

14         687.14  Definitions.--As used in this act, unless the

15  context otherwise requires:

16         (3)  "Commission" means the Financial Services

17  Commission "Department" means the Department of Banking and

18  Finance.

19         (6)  "Office" means the Office of Financial

20  Institutions and Securities Regulation of the commission.

21         Section 1882.  Subsection (3) of section 687.141,

22  Florida Statutes, is amended to read:

23         687.141  Loan brokers; prohibited acts.--No loan broker

24  shall:

25         (3)  Make or use any false or deceptive representation

26  in its business dealings or to the office department or

27  conceal a material fact from the office department.

28         Section 1883.  Section 687.143, Florida Statutes, is

29  amended to read:

30         687.143  Loan brokers; investigations; cease and desist

31  orders; administrative fines.--

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 1         (1)  The office department may investigate the actions

 2  of any person for compliance with this act.

 3         (2)  The office department may order a loan broker to

 4  cease and desist whenever the office department determines

 5  that the loan broker has violated or is violating or will

 6  violate any provision of this act, any rule of the commission,

 7  or order of promulgated by the office department, or any

 8  written agreement entered into with the office department.

 9         (3)  The office department may impose and collect an

10  administrative fine against any person found to have violated

11  any provision of this act, any rule of the commission, or

12  order of promulgated by the office department, or any written

13  agreement entered into with the office department in any

14  amount not to exceed $5,000 for each such violation.  All

15  fines collected hereunder shall be deposited in the Bureau

16  Division of Financial Investigations Administrative Trust

17  Fund.

18         Section 1884.  Section 687.144, Florida Statutes, is

19  amended to read:

20         687.144  Investigations; examinations; subpoenas;

21  hearings; witnesses.--

22         (1)  The office department may make investigations and

23  examinations upon reasonable suspicion within or outside of

24  this state as it deems necessary to determine whether a person

25  has violated or is about to violate any provision of this act

26  or any rule or order promulgated thereunder.

27         (2)  The office department may gather evidence in the

28  matter. The office department may administer oaths, examine

29  witnesses, and issue subpoenas.

30         (3)  Subpoenas for witnesses whose evidence is deemed

31  material to any investigation or examination may be issued by

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 1  the office department under the seal of the office department

 2  commanding such witnesses to be or appear before the office

 3  department at a time and place to be therein named and to

 4  bring such books, records, and documents as may be specified

 5  or to submit such books, records, and documents to inspection.

 6  Such subpoenas may be served by an authorized representative

 7  of the office department.

 8         (4)(a)  In the event of substantial noncompliance with

 9  a subpoena or subpoena duces tecum issued by the office

10  department, the office department may petition the circuit

11  court of the county in which the person subpoenaed resides or

12  has its principal place of business for an order requiring the

13  person to appear and fully comply with the subpoena.  The

14  court may grant injunctive relief restraining the violation of

15  this act and may grant such other relief, including, but not

16  limited to, the restraint, by injunction or appointment of a

17  receiver, of any transfer, pledge, assignment, or other

18  disposition of such person's assets or any concealment,

19  alteration, destruction, or other disposition of subpoenaed

20  books, records, or documents, as the court deems appropriate,

21  until such person has fully complied with such subpoena or

22  subpoena duces tecum and the office department has completed

23  its investigation or examination.  The office department is

24  entitled to the summary procedure provided in s. 51.011, and

25  the court shall advance the cause on its calendar.  Costs

26  incurred by the office department to obtain an order granting,

27  in whole or in part, such petition for enforcement of a

28  subpoena or subpoena duces tecum shall be taxed against the

29  subpoenaed person, and failure to comply with such order shall

30  be a contempt of court.

31  

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 1         (b)  When it shall appear to the office department that

 2  the compliance with a subpoena or subpoena duces tecum issued

 3  by the office department is essential to an investigation or

 4  examination, the office department, in addition to the other

 5  remedies provided for in this act, may, by verified petition

 6  setting forth the facts, apply to the circuit court of the

 7  county in which the subpoenaed person resides or has its

 8  principal place of business for a writ of ne exeat.  The court

 9  may thereupon direct the issuance of the writ against the

10  subpoenaed person requiring sufficient bond conditioned on

11  compliance with the subpoena or subpoena duces tecum.  The

12  court shall cause to be endorsed on the writ a suitable amount

13  of bond on payment of which the person named in the writ shall

14  be freed, having a due regard to the nature of the case.

15         (5)  Witnesses shall be entitled to the same fees and

16  mileage as they may be entitled by law for attending as

17  witnesses in the circuit court, except where such examination

18  or investigation is held at the place of business or residence

19  of the witness.

20         (6)  The material compiled by the office department in

21  an investigation or examination under this act is confidential

22  until the investigation or examination is complete.  The

23  investigation or examination is not deemed complete if the

24  office department has submitted the material or any part of it

25  to any law enforcement agency or other regulatory agency for

26  further investigation or for the filing of a criminal or civil

27  prosecution and such investigation and prosecution has not

28  been completed or becomes inactive.

29         Section 1885.  Section 687.145, Florida Statutes, is

30  amended to read:

31         687.145  Injunction to restrain violations.--

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 1         (1)  Whenever the office department determines, from

 2  evidence satisfactory to it, that any person has engaged, is

 3  engaged, or is about to engage in an act or practice

 4  constituting a violation of this act or a rule or order

 5  promulgated thereunder, the office department may bring action

 6  in the name and on behalf of the state against such person and

 7  any other person concerned in or in any way participating in

 8  or about to participate in such practice or engaging therein

 9  or doing any act or acts in furtherance thereof or in

10  violation of this act to enjoin the person or persons from

11  continuing the violation or acts in furtherance thereof.  In

12  such court proceedings, the office department may apply for

13  and on due showing be entitled to have issued, the court's

14  subpoena requiring the appearance of any defendant and his or

15  her employees or agents, and the production of documents,

16  books, and records that may appear necessary for the hearing

17  of such petition, to testify or give evidence concerning the

18  acts or conduct or things complained of in such application

19  for injunction.

20         (2)  In addition to all other means provided by law for

21  the enforcement of any temporary restraining order, temporary

22  injunction, or permanent injunction issued in such court

23  proceedings, the court shall have the power and jurisdiction,

24  upon application of the office department, to impound and to

25  appoint a receiver or administrator for the property, assets,

26  and business of the defendant, including, but not limited to,

27  the books, records, documents, and papers appertaining

28  thereto.  Such receiver or administrator, when appointed and

29  qualified, shall have all powers and duties as to custody,

30  collection, administration, winding up, and liquidation of

31  said property and business as shall from time to time be

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 1  conferred upon him or her by the court. In such action, the

 2  court may issue orders and decrees staying all pending suits

 3  and enjoining any further suits affecting the receiver's or

 4  administrator's custody or possession of the said property,

 5  assets, and business or, in its discretion, may, with the

 6  consent of the presiding judge of the circuit, require that

 7  all such suits be assigned to the circuit court judge

 8  appointing the said receiver or administrator.

 9         (3)  In addition to any other remedies provided by this

10  act, the office department may apply to the court hearing this

11  matter for an order of restitution whereby the defendants in

12  such action shall be ordered to make restitution of those sums

13  shown by the office department to have been obtained by them

14  in violation of any of the provisions of this act.  Such

15  restitution shall, at the option of the court, be payable to

16  the administrator or receiver appointed pursuant to this

17  section or directly to the persons whose assets were obtained

18  in violation of this act.

19         Section 1886.  Section 687.148, Florida Statutes, is

20  amended to read:

21         687.148  Duties and powers of the commission and office

22  department.--

23         (1)  The office is department shall be responsible for

24  the administration and enforcement of this act.

25         (2)  The commission department may adopt such rules as

26  it may deem necessary in the administration of this act and

27  not inconsistent therewith.

28         Section 1887.  Subsection (4) of section 697.05,

29  Florida Statutes, is amended to read:

30  

31  

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 1         697.05  Balloon mortgages; scope of law; definition;

 2  requirements as to contents; penalties for violations;

 3  exemptions.--

 4         (4)  This section does not apply to the following:

 5         (a)  Any mortgage in effect prior to January 1, 1960;

 6         (b)  Any first mortgage, excluding a mortgage in favor

 7  of a home improvement contractor defined in s. 520.61(13) s.

 8  520.61(12) the execution of which is required solely by the

 9  terms of a home improvement contract which is governed by the

10  provisions of ss. 520.60-520.98;

11         (c)  Any mortgage created for a term of 5 years or

12  more, excluding a mortgage in favor of a home improvement

13  contractor defined in s. 520.61(13) s. 520.61(12) the

14  execution of which is required solely by the terms of a home

15  improvement contract which is governed by the provisions of

16  ss. 520.60-520.98;

17         (d)  Any mortgage, the periodic payments on which are

18  to consist of interest payments only, with the entire original

19  principal sum to be payable upon maturity;

20         (e)  Any mortgage securing an extension of credit in

21  excess of $500,000;

22         (f)  Any mortgage granted in a transaction covered by

23  the federal Truth in Lending Act, 15 U.S.C. ss. 1601 et seq.,

24  in which each mortgagor thereunder is furnished a Truth in

25  Lending Disclosure Statement that satisfies the requirements

26  of the federal Truth in Lending Act; or

27         (g)  Any mortgage granted by a purchaser to a seller

28  pursuant to a written agreement to buy and sell real property

29  which provides that the final payment of said mortgage debt

30  will exceed the periodic payments thereon.

31  

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 1         Section 1888.  Paragraph (c) of subsection (3) of

 2  section 713.596, Florida Statutes, is amended to read:

 3         713.596  Molder's liens.--

 4         (3)  SALE.--

 5         (c)1.  The proceeds of the sale must be paid first to

 6  any holder of a security interest perfected in this state. Any

 7  excess must be paid to the molder holding the lien created by

 8  this section. Any remaining amount is to be paid to the

 9  customer, if the customer's address is known, or to the Chief

10  Financial Officer State Treasurer for deposit in the General

11  Revenue Fund if the customer's address is unknown to the

12  molder at the time of the sale.

13         2.  A sale may not be made under this section if it

14  would be in violation of any right of a customer under federal

15  patent or copyright law.

16         Section 1889.  Subsection (4) of section 716.02,

17  Florida Statutes, is amended to read:

18         716.02  Escheat of funds in the possession of federal

19  agencies.--All property within the provisions of subsections

20  (1), (2), (3), (4) and (5), are declared to have escheated, or

21  to escheat, including all principal and interest accruing

22  thereon, and to have become the property of the state.

23         (4)  In the event any money is due to any resident of

24  this state as a refund, rebate or tax rebate from the United

25  States Commissioner of Internal Revenue, the United States

26  Treasurer, or other governmental agency or department, which

27  said resident will, or is likely to have her or his rights to

28  apply for and secure such refund or rebate barred by any

29  statute of limitations or, in any event, has failed for a

30  period of 1 year after said resident could have filed a claim

31  for said refund or rebate, the Department of Financial

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 1  Services Banking and Finance is hereby appointed agent of such

 2  resident to demand, file and apply for said refund or rebate,

 3  and is hereby appointed to do any act which a natural person

 4  could do to recover such said money, and it is hereby declared

 5  that when the department files such said application or any

 6  other proceeding to secure such said refund or rebate, its

 7  agency is coupled with an interest in the money sought and

 8  money recovered.

 9         Section 1890.  Section 716.03, Florida Statutes, is

10  amended to read:

11         716.03  Department to institute proceedings to recover

12  escheated property.--When there exists, or may exist,

13  escheated funds or property under this chapter, the Department

14  of Financial Services Banking and Finance shall demand or

15  institute proceedings in the name of the state for an

16  adjudication that an escheat to the state of such funds or

17  property has occurred; and shall take appropriate action to

18  recover such funds or property.

19         Section 1891.  Section 716.04, Florida Statutes, is

20  amended to read:

21         716.04  Jurisdiction.--Whenever the Department of

22  Financial Services Banking and Finance is of the opinion an

23  escheat has occurred, or shall occur, of any money or other

24  property deposited in the custody of, or under the control of,

25  any court of the United States, in and for any district within

26  the state, or in the custody of any depository, registry or

27  clerk or other officer of such court, or the treasury of the

28  United States, it shall cause to be filed a complaint in the

29  Circuit Court of Leon County, or in any other court of

30  competent jurisdiction, to ascertain if any escheat has

31  occurred, and to cause said court to enter a judgment or

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 1  decree of escheat in favor of the state, with costs,

 2  disbursements, and attorney fee.

 3         Section 1892.  Section 716.05, Florida Statutes, is

 4  amended to read:

 5         716.05  Money recovered to be paid into State

 6  Treasury.--When any funds or property which has escheated

 7  within the meaning of this chapter has been recovered by the

 8  Department of Financial Services Banking and Finance, the

 9  department shall first pay all costs incident to the

10  collection and recovery of such funds or property and shall

11  promptly deposit the remaining balance of such funds or

12  property with the Chief Financial Officer Treasurer of the

13  state, to be distributed in accordance with law.

14         Section 1893.  Section 716.06, Florida Statutes, is

15  amended to read:

16         716.06  Public records.--All records in the office of

17  the Chief Financial Officer State Treasurer or the Department

18  of Financial Services Banking and Finance relating to federal

19  funds, pursuant to this chapter, shall be public records.

20         Section 1894.  Section 716.07, Florida Statutes, is

21  amended to read:

22         716.07  Recovery of escheated property by claimant.--

23         (1)  Any person who claims any property, funds, or

24  money delivered to the State Treasurer or Chief Financial

25  Officer under this chapter, shall, within 5 years from the

26  date of receipt of such said property, funds, or money, file a

27  verified claim with the Chief Financial Officer State

28  Treasurer, setting forth the facts upon which such said party

29  claims to be entitled to recover such said money or property.

30  The State Treasurer, within 5 days after receipt of such

31  claim, shall submit said verified claim or a verified copy

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 1  thereof, to the Department of Banking and Finance. All claims

 2  made for recovery of property, funds, or money, not filed

 3  within 5 years from the date that such said property, funds,

 4  or money is received by the Chief Financial Officer State

 5  Treasurer, shall be forever barred, and the Chief Financial

 6  Officer Treasurer of the state shall be without power to

 7  consider or determine any claims so made by any claimant after

 8  5 years from the date that the property, funds, or money was

 9  received by the Chief Financial Officer State Treasurer.

10         (2)  The Chief Financial Officer Comptroller shall

11  approve or disapprove the claim.  If the claim is approved,

12  the funds, money, or property of the claimant, less any

13  expenses and costs which shall have been incurred by the state

14  in securing the possession of said property, as provided by

15  this chapter, shall be delivered to the claimant by the Chief

16  Financial Officer State Treasurer upon warrant issued

17  according to law and her or his receipt taken therefor.  If

18  the court finds, upon any judicial review, that the claimant

19  is entitled to the property, money, or funds claimed, and

20  shall render judgment in her or his or its favor, declaring

21  that the claimant is entitled to such said property, funds, or

22  money, then upon presentation of said judgment or a certified

23  copy thereof to the Chief Financial Officer State Comptroller,

24  the Chief Financial Officer said Comptroller shall draw her or

25  his warrant for the amount of money stated in such said

26  judgment, without interest or cost to the state, less any sum

27  paid by the state as costs or expenses in securing possession

28  of such said property, funds, or money. When payment has been

29  made to any claimant, no action thereafter shall be maintained

30  by any other claimant against the state or any officer

31  

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 1  thereof, for or on account of such said money, property, or

 2  funds.

 3         Section 1895.  Subsection (6) of section 717.101,

 4  Florida Statutes, is amended to read:

 5         717.101  Definitions.--As used in this chapter, unless

 6  the context otherwise requires:

 7         (6)  "Department" means the Department of Financial

 8  Services Banking and Finance.

 9         Section 1896.  Subsection (8) of section 717.117,

10  Florida Statutes, is amended to read:

11         717.117  Report of unclaimed property.--

12         (8)  Social security numbers and financial account

13  numbers contained in reports required under this section, held

14  by the department of Banking and Finance, are confidential and

15  exempt from s. 119.07(1) and s. 24(a), Art. I of the State

16  Constitution. Notwithstanding this exemption, social security

17  numbers shall be released, for the limited purpose of locating

18  owners of abandoned or unclaimed property, to an attorney,

19  Florida-certified public accountant, private investigator who

20  is duly licensed in this state, or a private investigative

21  agency licensed under chapter 493 and registered with the

22  department of Banking and Finance under this chapter.  This

23  exemption applies to social security numbers and financial

24  account numbers held by the department of Banking and Finance

25  before, on, or after the effective date of this exemption.

26  This subsection is subject to the Open Government Sunset

27  Review Act of 1995 in accordance with s. 119.15, and shall

28  stand repealed October 2, 2007, unless reviewed and saved from

29  repeal through reenactment by the Legislature.

30         Section 1897.  Subsection (1) of section 717.135,

31  Florida Statutes, is amended to read:

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 1         717.135  Agreement to locate reported property.--

 2         (1)  All agreements between an owner's representative

 3  and an owner for compensation to recover or assist in the

 4  recovery of property reported to the department under s.

 5  717.117 shall either:

 6         (a)  Limit the fees for services for each owner

 7  contract to $25 for all contracts relating to unclaimed

 8  property with a dollar value below $250. For all contracts

 9  relating to unclaimed property with a dollar value of $250 and

10  above, fees shall be limited to 15 percent on property held by

11  the department for 24 months or less and 25 percent on

12  property held by the department for more than 24 months. Fees

13  for cash accounts shall be based on the value of the property

14  at the time the agreement for recovery is signed by the

15  apparent owner. Fees for accounts containing securities or

16  other intangible ownership interests, which securities or

17  interests are not converted to cash, shall be based on the

18  purchase price of the security as quoted on a national

19  exchange or other market on which the ownership interest is

20  regularly traded at the time the securities or other ownership

21  interest is remitted to the owner or the owner's

22  representative. Fees for tangible property or safe-deposit box

23  accounts shall be based on the value of the tangible property

24  or contents of the safe-deposit box at the time the ownership

25  interest is transferred or remitted to the owner or the

26  owner's representative; or

27         (b)  Disclose that the property is held by the

28  Department of Financial Services Banking and Finance pursuant

29  to this chapter, the person or name of the entity that held

30  the property prior to the property becoming unclaimed, the

31  date of the holder's last contact with the owner, if known,

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 1  and the approximate value of the property, and identify which

 2  of the following categories of unclaimed property the owner's

 3  representative is seeking to recover:

 4         1.  Cash accounts.

 5         2.  Stale dated checks.

 6         3.  Life insurance or annuity contract assets.

 7         4.  Utility deposits.

 8         5.  Securities or other interests in business

 9  associations.

10         6.  Wages.

11         7.  Accounts receivable.

12         8.  Contents of safe-deposit boxes.

13  

14  However, this section shall not apply to contracts made in

15  connection with guardianship proceedings or the probate of an

16  estate.

17         Section 1898.  Section 717.138, Florida Statutes, is

18  amended to read:

19         717.138  Rulemaking authority.--The department of

20  Banking and Finance shall administer and provide for the

21  enforcement of this chapter. The department has authority to

22  adopt rules pursuant to ss. 120.536(1) and 120.54 to implement

23  the provisions of this chapter. The department may adopt rules

24  to allow for electronic filing of fees, forms, and reports

25  required by this chapter.

26         Section 1899.  Paragraph (d) of subsection (1) of

27  section 718.501, Florida Statutes, is amended to read:

28         718.501  Powers and duties of Division of Florida Land

29  Sales, Condominiums, and Mobile Homes.--

30         (1)  The Division of Florida Land Sales, Condominiums,

31  and Mobile Homes of the Department of Business and

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 1  Professional Regulation, referred to as the "division" in this

 2  part, in addition to other powers and duties prescribed by

 3  chapter 498, has the power to enforce and ensure compliance

 4  with the provisions of this chapter and rules promulgated

 5  pursuant hereto relating to the development, construction,

 6  sale, lease, ownership, operation, and management of

 7  residential condominium units. In performing its duties, the

 8  division has the following powers and duties:

 9         (d)  Notwithstanding any remedies available to unit

10  owners and associations, if the division has reasonable cause

11  to believe that a violation of any provision of this chapter

12  or rule promulgated pursuant hereto has occurred, the division

13  may institute enforcement proceedings in its own name against

14  any developer, association, officer, or member of the board of

15  administration, or its assignees or agents, as follows:

16         1.  The division may permit a person whose conduct or

17  actions may be under investigation to waive formal proceedings

18  and enter into a consent proceeding whereby orders, rules, or

19  letters of censure or warning, whether formal or informal, may

20  be entered against the person.

21         2.  The division may issue an order requiring the

22  developer, association, officer, or member of the board of

23  administration, or its assignees or agents, to cease and

24  desist from the unlawful practice and take such affirmative

25  action as in the judgment of the division will carry out the

26  purposes of this chapter. Such affirmative action may include,

27  but is not limited to, an order requiring a developer to pay

28  moneys determined to be owed to a condominium association.

29         3.  The division may bring an action in circuit court

30  on behalf of a class of unit owners, lessees, or purchasers

31  for declaratory relief, injunctive relief, or restitution.

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 1         4.  The division may impose a civil penalty against a

 2  developer or association, or its assignee or agent, for any

 3  violation of this chapter or a rule promulgated pursuant

 4  hereto. The division may impose a civil penalty individually

 5  against any officer or board member who willfully and

 6  knowingly violates a provision of this chapter, a rule adopted

 7  pursuant hereto, or a final order of the division. The term

 8  "willfully and knowingly" means that the division informed the

 9  officer or board member that his or her action or intended

10  action violates this chapter, a rule adopted under this

11  chapter, or a final order of the division and that the officer

12  or board member refused to comply with the requirements of

13  this chapter, a rule adopted under this chapter, or a final

14  order of the division. The division, prior to initiating

15  formal agency action under chapter 120, shall afford the

16  officer or board member an opportunity to voluntarily comply

17  with this chapter, a rule adopted under this chapter, or a

18  final order of the division. An officer or board member who

19  complies within 10 days is not subject to a civil penalty. A

20  penalty may be imposed on the basis of each day of continuing

21  violation, but in no event shall the penalty for any offense

22  exceed $5,000. By January 1, 1998, the division shall adopt,

23  by rule, penalty guidelines applicable to possible violations

24  or to categories of violations of this chapter or rules

25  adopted by the division. The guidelines must specify a

26  meaningful range of civil penalties for each such violation of

27  the statute and rules and must be based upon the harm caused

28  by the violation, the repetition of the violation, and upon

29  such other factors deemed relevant by the division. For

30  example, the division may consider whether the violations were

31  committed by a developer or owner-controlled association, the

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 1  size of the association, and other factors. The guidelines

 2  must designate the possible mitigating or aggravating

 3  circumstances that justify a departure from the range of

 4  penalties provided by the rules. It is the legislative intent

 5  that minor violations be distinguished from those which

 6  endanger the health, safety, or welfare of the condominium

 7  residents or other persons and that such guidelines provide

 8  reasonable and meaningful notice to the public of likely

 9  penalties that may be imposed for proscribed conduct. This

10  subsection does not limit the ability of the division to

11  informally dispose of administrative actions or complaints by

12  stipulation, agreed settlement, or consent order. All amounts

13  collected shall be deposited with the Chief Financial Officer

14  Treasurer to the credit of the Division of Florida Land Sales,

15  Condominiums, and Mobile Homes Trust Fund. If a developer

16  fails to pay the civil penalty, the division shall thereupon

17  issue an order directing that such developer cease and desist

18  from further operation until such time as the civil penalty is

19  paid or may pursue enforcement of the penalty in a court of

20  competent jurisdiction. If an association fails to pay the

21  civil penalty, the division shall thereupon pursue enforcement

22  in a court of competent jurisdiction, and the order imposing

23  the civil penalty or the cease and desist order will not

24  become effective until 20 days after the date of such order.

25  Any action commenced by the division shall be brought in the

26  county in which the division has its executive offices or in

27  the county where the violation occurred.

28         Section 1900.  Paragraph (d) of subsection (1) of

29  section 719.501, Florida Statutes, is amended to read:

30         719.501  Powers and duties of Division of Florida Land

31  Sales, Condominiums, and Mobile Homes.--

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 1         (1)  The Division of Florida Land Sales, Condominiums,

 2  and Mobile Homes of the Department of Business and

 3  Professional Regulation, referred to as the "division" in this

 4  part, in addition to other powers and duties prescribed by

 5  chapter 498, has the power to enforce and ensure compliance

 6  with the provisions of this chapter and rules promulgated

 7  pursuant hereto relating to the development, construction,

 8  sale, lease, ownership, operation, and management of

 9  residential cooperative units. In performing its duties, the

10  division shall have the following powers and duties:

11         (d)  Notwithstanding any remedies available to unit

12  owners and associations, if the division has reasonable cause

13  to believe that a violation of any provision of this chapter

14  or rule promulgated pursuant hereto has occurred, the division

15  may institute enforcement proceedings in its own name against

16  a developer, association, officer, or member of the board, or

17  its assignees or agents, as follows:

18         1.  The division may permit a person whose conduct or

19  actions may be under investigation to waive formal proceedings

20  and enter into a consent proceeding whereby orders, rules, or

21  letters of censure or warning, whether formal or informal, may

22  be entered against the person.

23         2.  The division may issue an order requiring the

24  developer, association, officer, or member of the board, or

25  its assignees or agents, to cease and desist from the unlawful

26  practice and take such affirmative action as in the judgment

27  of the division will carry out the purposes of this chapter.

28  Such affirmative action may include, but is not limited to, an

29  order requiring a developer to pay moneys determined to be

30  owed to a condominium association.

31  

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 1         3.  The division may bring an action in circuit court

 2  on behalf of a class of unit owners, lessees, or purchasers

 3  for declaratory relief, injunctive relief, or restitution.

 4         4.  The division may impose a civil penalty against a

 5  developer or association, or its assignees or agents, for any

 6  violation of this chapter or a rule promulgated pursuant

 7  hereto. The division may impose a civil penalty individually

 8  against any officer or board member who willfully and

 9  knowingly violates a provision of this chapter, a rule adopted

10  pursuant to this chapter, or a final order of the division.

11  The term "willfully and knowingly" means that the division

12  informed the officer or board member that his or her action or

13  intended action violates this chapter, a rule adopted under

14  this chapter, or a final order of the division, and that the

15  officer or board member refused to comply with the

16  requirements of this chapter, a rule adopted under this

17  chapter, or a final order of the division. The division, prior

18  to initiating formal agency action under chapter 120, shall

19  afford the officer or board member an opportunity to

20  voluntarily comply with this chapter, a rule adopted under

21  this chapter, or a final order of the division. An officer or

22  board member who complies within 10 days is not subject to a

23  civil penalty. A penalty may be imposed on the basis of each

24  day of continuing violation, but in no event shall the penalty

25  for any offense exceed $5,000. By January 1, 1998, the

26  division shall adopt, by rule, penalty guidelines applicable

27  to possible violations or to categories of violations of this

28  chapter or rules adopted by the division. The guidelines must

29  specify a meaningful range of civil penalties for each such

30  violation of the statute and rules and must be based upon the

31  harm caused by the violation, the repetition of the violation,

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 1  and upon such other factors deemed relevant by the division.

 2  For example, the division may consider whether the violations

 3  were committed by a developer or owner-controlled association,

 4  the size of the association, and other factors. The guidelines

 5  must designate the possible mitigating or aggravating

 6  circumstances that justify a departure from the range of

 7  penalties provided by the rules. It is the legislative intent

 8  that minor violations be distinguished from those which

 9  endanger the health, safety, or welfare of the cooperative

10  residents or other persons and that such guidelines provide

11  reasonable and meaningful notice to the public of likely

12  penalties that may be imposed for proscribed conduct. This

13  subsection does not limit the ability of the division to

14  informally dispose of administrative actions or complaints by

15  stipulation, agreed settlement, or consent order. All amounts

16  collected shall be deposited with the Chief Financial Officer

17  Treasurer to the credit of the Division of Florida Land Sales,

18  Condominiums, and Mobile Homes Trust Fund. If a developer

19  fails to pay the civil penalty, the division shall thereupon

20  issue an order directing that such developer cease and desist

21  from further operation until such time as the civil penalty is

22  paid or may pursue enforcement of the penalty in a court of

23  competent jurisdiction. If an association fails to pay the

24  civil penalty, the division shall thereupon pursue enforcement

25  in a court of competent jurisdiction, and the order imposing

26  the civil penalty or the cease and desist order shall not

27  become effective until 20 days after the date of such order.

28  Any action commenced by the division shall be brought in the

29  county in which the division has its executive offices or in

30  the county where the violation occurred.

31  

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 1         Section 1901.  Subsection (3) of section 721.24,

 2  Florida Statutes, is amended to read:

 3         721.24  Firesafety.--

 4         (3)  The Division of State Fire Marshal of the

 5  Department of Financial Services Insurance may prescribe

 6  uniform standards for firesafety equipment for timeshare units

 7  of timeshare plans for which the construction contracts were

 8  let before October 1, 1983. An entire building shall be

 9  equipped as outlined, except that the approved sprinkler

10  system may be delayed by the Division of State Fire Marshal

11  until October 1, 1991, on a schedule for complete compliance

12  in accordance with rules adopted by the Division of State Fire

13  Marshal, which schedule shall include a provision for a 1-year

14  extension which may be granted not more than three times for

15  any individual requesting an extension.  The entire system

16  must be installed and operational by October 1, 1994.  The

17  Division of State Fire Marshal shall not grant an extension

18  for the approved sprinkler system unless a written request for

19  the extension and a construction work schedule is submitted.

20  The Division of State Fire Marshal may grant an extension upon

21  demonstration that compliance with this section by the date

22  required would impose an extreme hardship and a

23  disproportionate financial impact.  Any establishment that has

24  been granted an extension by the Division of State Fire

25  Marshal shall post, in a conspicuous place on the premises, a

26  public notice stating that the establishment has not yet

27  installed the approved sprinkler system required by law.

28         Section 1902.  Paragraph (e) of subsection (5) of

29  section 721.26, Florida Statutes, is amended to read:

30         721.26  Regulation by division.--The division has the

31  power to enforce and ensure compliance with the provisions of

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 1  this chapter, except for parts III and IV, using the powers

 2  provided in this chapter, as well as the powers prescribed in

 3  chapters 498, 718, and 719. In performing its duties, the

 4  division shall have the following powers and duties:

 5         (5)  Notwithstanding any remedies available to

 6  purchasers, if the division has reasonable cause to believe

 7  that a violation of this chapter, or of any division rule or

 8  order promulgated or issued pursuant to this chapter, has

 9  occurred, the division may institute enforcement proceedings

10  in its own name against any regulated party, as such term is

11  defined in this subsection:

12         (e)1.  The division may impose a penalty against any

13  regulated party for a violation of this chapter or any rule

14  adopted thereunder.  A penalty may be imposed on the basis of

15  each day of continuing violation, but in no event may the

16  penalty for any offense exceed $10,000.  All accounts

17  collected shall be deposited with the Chief Financial Officer

18  Treasurer to the credit of the Division of Florida Land Sales,

19  Condominiums, and Mobile Homes Trust Fund.

20         2.a.  If a regulated party fails to pay a penalty, the

21  division shall thereupon issue an order directing that such

22  regulated party cease and desist from further operation until

23  such time as the penalty is paid; or the division may pursue

24  enforcement of the penalty in a court of competent

25  jurisdiction.

26         b.  If an association or managing entity fails to pay a

27  civil penalty, the division may pursue enforcement in a court

28  of competent jurisdiction.

29         Section 1903.  Paragraph (e) of subsection (5) of

30  section 723.006, Florida Statutes, is amended to read:

31  

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 1         723.006  Powers and duties of division.--In performing

 2  its duties, the division has the following powers and duties:

 3         (5)  Notwithstanding any remedies available to mobile

 4  home owners, mobile home park owners, and homeowners'

 5  associations, if the division has reasonable cause to believe

 6  that a violation of any provision of this chapter or any rule

 7  promulgated pursuant hereto has occurred, the division may

 8  institute enforcement proceedings in its own name against a

 9  developer, mobile home park owner, or homeowners' association,

10  or its assignee or agent, as follows:

11         (e)1.  The division may impose a civil penalty against

12  a mobile home park owner or homeowners' association, or its

13  assignee or agent, for any violation of this chapter, a

14  properly promulgated park rule or regulation, or a rule or

15  regulation promulgated pursuant hereto.  A penalty may be

16  imposed on the basis of each separate violation and, if the

17  violation is a continuing one, for each day of continuing

18  violation, but in no event may the penalty for each separate

19  violation or for each day of continuing violation exceed

20  $5,000. All amounts collected shall be deposited with the

21  Chief Financial Officer Treasurer to the credit of the

22  Division of Florida Land Sales, Condominiums, and Mobile Homes

23  Trust Fund.

24         2.  If a violator fails to pay the civil penalty, the

25  division shall thereupon issue an order directing that such

26  violator cease and desist from further violation until such

27  time as the civil penalty is paid or may pursue enforcement of

28  the penalty in a court of competent jurisdiction.  If a

29  homeowners' association fails to pay the civil penalty, the

30  division shall thereupon pursue enforcement in a court of

31  competent jurisdiction, and the order imposing the civil

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 1  penalty or the cease and desist order shall not become

 2  effective until 20 days after the date of such order.  Any

 3  action commenced by the division shall be brought in the

 4  county in which the division has its executive offices or in

 5  which the violation occurred.

 6         Section 1904.  Subsections (2) and (3) and paragraph

 7  (a) of subsection (5) of section 732.107, Florida Statutes,

 8  are amended to read:

 9         732.107  Escheat.--

10         (2)  Property that escheats shall be sold as provided

11  in the Florida Probate Rules and the proceeds paid to the

12  Chief Financial Officer Treasurer of the state and deposited

13  in the State School Fund.

14         (3)  At any time within 10 years after the payment to

15  the Chief Financial Officer Treasurer, a person claiming to be

16  entitled to the proceeds may reopen the administration to

17  assert entitlement to the proceeds.  If no claim is timely

18  asserted, the state's rights to the proceeds shall become

19  absolute.

20         (5)(a)  If a person entitled to the proceeds assigns

21  the rights to receive payment to an attorney,

22  Florida-certified public accountant, or private investigative

23  agency which is duly licensed to do business in this state

24  pursuant to a written agreement with that person, the

25  Department of Financial Services Banking and Finance is

26  authorized to make distribution in accordance with the

27  assignment.

28         Section 1905.  Subsections (1), (2), and (3) and

29  paragraph (a) of subsection (5) of section 733.816, Florida

30  Statutes, are amended to read:

31  

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 1         733.816  Disposition of unclaimed property held by

 2  personal representatives.--

 3         (1)  In all cases in which there is unclaimed property

 4  in the hands of a personal representative that cannot be

 5  distributed or paid because of the inability to find the

 6  lawful owner or because no lawful owner is known or because

 7  the lawful owner refuses to accept the property after a

 8  reasonable attempt to distribute it and after notice to that

 9  lawful owner, the court shall order the personal

10  representative to sell the property and deposit the proceeds

11  and cash already in hand, after retaining those amounts

12  provided for in subsection (4), with the clerk and receive a

13  receipt, and the clerk shall deposit the funds in the registry

14  of the court to be disposed of as follows:

15         (a)  If the value of the funds is $500 or less, the

16  clerk shall post a notice for 30 days at the courthouse door

17  giving the amount involved, the name of the personal

18  representative, and the other pertinent information that will

19  put interested persons on notice.

20         (b)  If the value of the funds is over $500, the clerk

21  shall publish the notice once a month for 2 consecutive months

22  in a newspaper of general circulation in the county.

23  

24  After the expiration of 6 months from the posting or first

25  publication, the clerk shall deposit the funds with the Chief

26  Financial Officer State Treasurer after deducting the clerk's

27  fees and the costs of publication.

28         (2)  Upon receipt of the funds, the Chief Financial

29  Officer State Treasurer shall deposit them to the credit of

30  the State School Fund, to become a part of the school fund.

31  All interest and all income that may accrue from the money

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 1  while so deposited shall belong to the fund. The funds so

 2  deposited shall constitute and be a permanent appropriation

 3  for payments by the Chief Financial Officer State Treasurer in

 4  obedience to court orders entered as provided by subsection

 5  (3).

 6         (3)  Within 10 years from the date of deposit with the

 7  Chief Financial Officer State Treasurer, on written petition

 8  to the court that directed the deposit of the funds and

 9  informal notice to the Department of Legal Affairs, and after

10  proof of entitlement, any person entitled to the funds before

11  or after payment to the Chief Financial Officer State

12  Treasurer and deposit as provided by subsection (1) may obtain

13  a court order directing the payment of the funds to that

14  person. All funds deposited with the Chief Financial Officer

15  State Treasurer and not claimed within 10 years from the date

16  of deposit shall escheat to the state for the benefit of the

17  State School Fund.

18         (5)(a)  If a person entitled to the funds assigns the

19  right to receive payment or part payment to an attorney or

20  private investigative agency which is duly licensed to do

21  business in this state pursuant to a written agreement with

22  that person, the Department of Financial Services Banking and

23  Finance is authorized to make distribution in accordance with

24  the assignment.

25         Section 1906.  Paragraphs (a), (b), and (c) of

26  subsection (2) of section 744.534, Florida Statutes, are

27  amended to read:

28         744.534  Disposition of unclaimed funds held by

29  guardian.--

30         (2)(a)  In those cases in which it is appropriate for

31  the guardianship to terminate pursuant to s. 744.521 and in

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 1  which property in the hands of a guardian cannot be

 2  distributed to the ward or the ward's estate solely because

 3  the guardian is unable to locate the ward through diligent

 4  search, the court shall order the guardian of the property to

 5  sell the property of the ward and deposit the proceeds and

 6  cash already on hand after retaining those amounts provided

 7  for in paragraph (e) with the clerk of the court exercising

 8  jurisdiction over the guardianship and receive a receipt.  The

 9  clerk shall deposit the funds in the registry of the court, to

10  be disposed of as follows:

11         1.  If the value of the funds is $50 or less, the clerk

12  shall post a notice for 30 days at the courthouse door giving

13  the amount involved, the name of the ward, and other pertinent

14  information that will put interested persons on notice.

15         2.  If the value of the funds is over $50, the clerk

16  shall publish the notice once a month for 2 consecutive months

17  in a newspaper of general circulation in the county.

18         3.  After the expiration of 6 months from the posting

19  or first publication, the clerk shall deposit the funds with

20  the Chief Financial Officer State Treasurer after deducting

21  his or her fees and the costs of publication.

22         (b)  Upon receipt of the funds, the Chief Financial

23  Officer State Treasurer shall deposit them to the credit of

24  public guardianship. All interest and all income that may

25  accrue from the money while so deposited shall belong to the

26  fund.  The funds so deposited shall constitute and be a

27  permanent appropriation for payments by the Chief Financial

28  Officer State Treasurer in obedience to court orders entered

29  as provided by paragraph (c).

30         (c)  Within 5 years from the date of deposit with the

31  Chief Financial Officer State Treasurer, on written petition

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 1  to the court that directed the deposit of the funds and

 2  informal notice to the Department of Legal Affairs, and after

 3  proof of his or her right to them, any person entitled to the

 4  funds, before or after payment to the Chief Financial Officer

 5  State Treasurer and deposit as provided for in paragraph (a),

 6  may obtain a court order directing the payment of the funds to

 7  him or her. All funds deposited with the Chief Financial

 8  Officer State Treasurer and not claimed within 5 years from

 9  the date of deposit shall escheat to the state to be deposited

10  in the Department of Elderly Affairs Administrative Trust Fund

11  to be used solely for the benefit of public guardianship as

12  determined by the Statewide Public Guardianship Office

13  established in part IX of this chapter.

14         Section 1907.  Paragraphs (b), (c), (d), (e), and (g)

15  of subsection (3) of section 766.105, Florida Statutes, are

16  amended to read:

17         766.105  Florida Patient's Compensation Fund.--

18         (3)  THE FUND.--

19         (b)  Fund administration and operation.--

20         1.  The fund shall operate subject to the supervision

21  and approval of a board of governors consisting of a

22  representative of the insurance industry appointed by the

23  Chief Financial Officer Insurance Commissioner, an attorney

24  appointed by The Florida Bar, a representative of physicians

25  appointed by the Florida Medical Association, a representative

26  of physicians' insurance appointed by the Chief Financial

27  Officer Insurance Commissioner, a representative of

28  physicians' self-insurance appointed by the Chief Financial

29  Officer Insurance Commissioner, two representatives of

30  hospitals appointed by the Florida Hospital Association, a

31  representative of hospital insurance appointed by the Chief

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 1  Financial Officer Insurance Commissioner, a representative of

 2  hospital self-insurance appointed by the Chief Financial

 3  Officer Insurance Commissioner, a representative of the

 4  osteopathic physicians' or podiatric physicians' insurance or

 5  self-insurance appointed by the Chief Financial Officer

 6  Insurance Commissioner, and a representative of the general

 7  public appointed by the Chief Financial Officer Insurance

 8  Commissioner. The board of governors shall, during the first

 9  meeting after June 30 of each year, choose one of its members

10  to serve as chair of the board and another member to serve as

11  vice chair of the board.  The members of the board shall be

12  appointed to serve terms of 4 years, except that the initial

13  appointments of a representative of the general public by the

14  Chief Financial Officer Insurance Commissioner, an attorney by

15  The Florida Bar, a representative of physicians by the Florida

16  Medical Association, and one of the two representatives of the

17  Florida Hospital Association shall be for terms of 3 years;

18  thereafter, such representatives shall be appointed for terms

19  of 4 years. Subsequent to initial appointments for 4-year

20  terms, the representative of the osteopathic physicians' or

21  podiatric physicians' insurance or self-insurance appointed by

22  the Chief Financial Officer Insurance Commissioner and the

23  representative of hospital self-insurance appointed by the

24  Chief Financial Officer Insurance Commissioner shall be

25  appointed for 2-year terms; thereafter, such representatives

26  shall be appointed for terms of 4 years. Each appointed member

27  may designate in writing to the chair an alternate to act in

28  the member's absence or incapacity. A member of the board, or

29  the member's alternate, may be reimbursed from the assets of

30  the fund for expenses incurred by him or her as a member, or

31  alternate member, of the board and for committee work, but he

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 1  or she may not otherwise be compensated by the fund for his or

 2  her service as a board member or alternate.

 3         2.  There shall be no liability on the part of, and no

 4  cause of action of any nature shall arise against, the fund or

 5  its agents or employees, professional advisers or consultants,

 6  members of the board of governors or their alternates, or the

 7  Department of Financial Services or the Office of Insurance

 8  Regulation of the Financial Services Commission Insurance or

 9  their its representatives for any action taken by them in the

10  performance of their powers and duties pursuant to this

11  section.

12         (c)  Powers of the fund.--The fund has the power to:

13         1.  Sue and be sued, and appear and defend, in all

14  actions and proceedings in its name to the same extent as a

15  natural person.

16         2.  Adopt, change, amend, and repeal a plan of

17  operation, not inconsistent with law, for the regulation and

18  administration of the affairs of the fund.  The plan and any

19  changes thereto shall be filed with the Office of Insurance

20  Regulation of the Financial Services Commission Insurance

21  Commissioner and are all subject to its his or her approval

22  before implementation by the fund.  All fund members, board

23  members, and employees shall comply with the plan of

24  operation.

25         3.  Have and exercise all powers necessary or

26  convenient to effect any or all of the purposes for which the

27  fund is created.

28         4.  Enter into such contracts as are necessary or

29  proper to carry out the provisions and purposes of this

30  section.

31  

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 1         5.  Employ or retain such persons as are necessary to

 2  perform the administrative and financial transactions and

 3  responsibilities of the fund and to perform other necessary or

 4  proper functions unless prohibited by law.

 5         6.  Take such legal action as may be necessary to avoid

 6  payment of improper claims.

 7         7.  Indemnify any employee, agent, member of the board

 8  of governors or his or her alternate, or person acting on

 9  behalf of the fund in an official capacity, for expenses,

10  including attorney's fees, judgments, fines, and amounts paid

11  in settlement actually and reasonably incurred by him or her

12  in connection with any action, suit, or proceeding, including

13  any appeal thereof, arising out of his or her capacity in

14  acting on behalf of the fund, if he or she acted in good faith

15  and in a manner he or she reasonably believed to be in, or not

16  opposed to, the best interests of the fund and, with respect

17  to any criminal action or proceeding, he or she had reasonable

18  cause to believe his or her conduct was lawful.

19         (d)  Fees and assessments.--Each health care provider,

20  as set forth in subsection (2), electing to comply with

21  paragraph (2)(b) for a given fiscal year shall pay the fees

22  and any assessments established under this section relative to

23  such fiscal year, for deposit into the fund.  Those entering

24  the fund after the fiscal year has begun shall pay a prorated

25  share of the yearly fees for a prorated membership.

26  Actuarially sound membership fees payable annually,

27  semiannually, or quarterly with appropriate service charges

28  shall be established by the fund before January 1 of each

29  fiscal year, based on the following considerations:

30  

31  

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 1         1.  Past and prospective loss and expense experience in

 2  different types of practice and in different geographical

 3  areas within the state;

 4         2.  The prior claims experience of the members covered

 5  under the fund; and

 6         3.  Risk factors for persons who are retired,

 7  semiretired, or part-time professionals.

 8  

 9  Such fees shall be based on not more than three geographical

10  areas, not necessarily contiguous, with five categories of

11  practice and with categories which contemplate separate risk

12  ratings for hospitals, for health maintenance organizations,

13  for ambulatory surgical facilities, and for other medical

14  facilities. The fund is authorized to adjust the fees of an

15  individual member to reflect the claims experience of such

16  member.  Each fiscal year of the fund shall operate

17  independently of preceding fiscal years. Participants shall

18  only be liable for assessments for claims from years during

19  which they were members of the fund; in cases in which a

20  participant is a member of the fund for less than the total

21  fiscal year, a member shall be subject to assessments for that

22  year on a pro rata basis determined by the percentage of

23  participation for the year.  The fund shall submit to the

24  Office of Insurance Regulation Insurance Commissioner the

25  classifications and membership fees to be charged, and the

26  Office of Insurance Regulation Insurance Commissioner shall

27  review such fees and shall approve them if they comply with

28  all the requirements of this section and fairly reflect the

29  considerations provided for in this section.  If the

30  classifications or membership fees do not comply with this

31  section, the Office of Insurance Regulation Insurance

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 1  Commissioner shall set classifications or membership fees

 2  which do comply and which give due recognition to all

 3  considerations provided for in this section.  Nothing

 4  contained herein shall be construed as imposing liability for

 5  payment of any part of a fund deficit on the Joint

 6  Underwriting Association authorized by s. 627.351(4) or its

 7  member insurers. If the fund determines that the amount of

 8  money in an account for a given fiscal year is in excess of or

 9  not sufficient to satisfy the claims made against the account,

10  the fund shall certify the amount of the projected excess or

11  insufficiency to the Office of Insurance Regulation Insurance

12  Commissioner and request the office Insurance Commissioner to

13  levy an assessment against or refund to all participants in

14  the fund for that fiscal year, prorated, based on the number

15  of days of participation during the year in question. The

16  Office of Insurance Regulation Insurance Commissioner shall

17  approve the request of the fund to refund to, or levy any

18  assessment against, the participants, provided the refund or

19  assessment fairly reflects the same considerations and

20  classifications upon which the membership fees were based. The

21  assessment shall be in an amount sufficient to satisfy reserve

22  requirements for known claims, including expenses to satisfy

23  the claims, made against the account for a given fiscal year.

24  In any proceeding to challenge the amount of the refund or

25  assessment, it is to be presumed that the amount of refund or

26  assessment requested by the fund is correct, if the fund

27  demonstrates that it has used reasonable claims handling and

28  reserving procedures. Additional assessments may be certified

29  and levied in accordance with this paragraph as necessary for

30  any fiscal year.  If a fund member objects to his or her

31  assessment, he or she shall, as a condition precedent to

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 1  bringing legal action contesting the assessment, pay the

 2  assessment, under protest, to the fund.  The fund may borrow

 3  money needed for current operations, if necessary to pay

 4  claims and related expenses, fees, and costs timely for a

 5  given fiscal year, from an account for another fiscal year

 6  until such time as sufficient funds have been obtained through

 7  the assessment process.  Any such money, together with

 8  interest at the mean interest rate earned on the investment

 9  portfolio of the fund, shall be repaid from the next

10  assessment for the given fiscal year. If any assessments are

11  levied in accordance with this subsection as a result of

12  claims in excess of $500,000 per occurrence, and such

13  assessments are a result of the liability of certain

14  individuals and entities specified in paragraph (2)(e), only

15  hospitals shall be subject to such assessments.  Before

16  approving the request of the fund to charge membership fees,

17  issue refunds, or levy assessments, the Office of Insurance

18  Regulation Insurance Commissioner shall publish notice of the

19  request in the Florida Administrative Weekly. Pursuant to

20  chapter 120, any party substantially affected may request an

21  appropriate proceeding. Any petition for such a proceeding

22  shall be filed with the Office of Insurance Regulation

23  Department of Insurance within 21 days after the date of

24  publication of the notice in the Florida Administrative

25  Weekly.

26         (e)  Fund accounting and audit.--

27         1.  Money shall be withdrawn from the fund only upon a

28  voucher as authorized by the board of governors.

29         2.  All books, records, and audits of the fund shall be

30  open for reasonable inspection to the general public, except

31  that a claim file in possession of the fund, fund members, and

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 1  their insurers is confidential and exempt from the provisions

 2  of s. 119.07(1) and s. 24(a), Art. I of the State Constitution

 3  until termination of litigation or settlement of the claim,

 4  although medical records and other portions of the claim file

 5  may remain confidential and exempt as otherwise provided by

 6  law. Any book, record, document, audit, or asset acquired by,

 7  prepared for, or paid for by the fund is subject to the

 8  authority of the board of governors, which shall be

 9  responsible therefor.

10         3.  Persons authorized to receive deposits, issue

11  vouchers, or withdraw or otherwise disburse any fund moneys

12  shall post a blanket fidelity bond in an amount reasonably

13  sufficient to protect fund assets. The cost of such bond shall

14  be paid from the fund.

15         4.  Annually, the fund shall furnish, upon request,

16  audited financial reports to any fund participant and to the

17  Office of Insurance Regulation Department of Insurance and the

18  Joint Legislative Auditing Committee. The reports shall be

19  prepared in accordance with accepted accounting procedures and

20  shall include income and such other information as may be

21  required by the Office of Insurance Regulation Department of

22  Insurance or the Joint Legislative Auditing Committee.

23         5.  Any money held in the fund shall be invested in

24  interest-bearing investments by the board of governors of the

25  fund as administrator. However, in no case may any such money

26  be invested in the stock of any insurer participating in the

27  Joint Underwriting Association authorized by s. 627.351(4) or

28  in the parent company of, or company owning a controlling

29  interest in, such insurer. All income derived from such

30  investments shall be credited to the fund.

31  

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 1         6.  Any health care provider participating in the fund

 2  may withdraw from such participation only at the end of a

 3  fiscal year; however, such health care provider shall remain

 4  subject to any assessment or any refund pertaining to any year

 5  in which such member participated in the fund.

 6         (g)  Risk management program.--The fund shall establish

 7  a risk management program as part of its administrative

 8  functions.  All health care providers, as defined in

 9  subparagraphs (1)(b)1., 5., 6., and 7., participating in the

10  fund shall comply with the provisions of the risk management

11  program established by the fund. The risk management program

12  shall include the following components:

13         1.  The investigation and analysis of the frequency and

14  causes of general categories and specific types of adverse

15  incidents causing injury to patients;

16         2.  The development of appropriate measures to minimize

17  the risk of injuries and adverse incidents to patients;

18         3.  The analysis of patient grievances which relate to

19  patient care and the quality of medical services;

20         4.  The development and implementation of an incident

21  reporting system based upon the affirmative duty of all health

22  care providers and all agents and employees of health care

23  providers and health care facilities to report injuries and

24  incidents; and

25         5.  Auditing of participating health care providers to

26  assure compliance with the provisions of the risk management

27  program.

28  

29  The fund shall establish a schedule of fee surcharges which it

30  shall levy upon participating health care providers found to

31  be in violation of the provisions of the risk management

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 1  program. Such schedule shall be subject to approval by the

 2  Office of Insurance Regulation department and shall provide an

 3  escalating scale of surcharges based upon the frequency and

 4  severity of the incidents in violation of the risk management

 5  program.  No health care provider shall be required to pay a

 6  surcharge if it has corrected all violations of the provisions

 7  of the risk management program and established an affirmative

 8  program to remain in compliance by the time its next fee or

 9  assessment is due.

10         Section 1908.  Subsection (7) of section 766.1115,

11  Florida Statutes, is amended to read:

12         766.1115  Health care providers; creation of agency

13  relationship with governmental contractors.--

14         (7)  RISK MANAGEMENT REPORT.--The Division of Risk

15  Management of the Department of Financial Services Insurance

16  shall annually compile a report of all claims statistics for

17  all entities participating in the risk management program

18  administered by the division, which shall include the number

19  and total of all claims pending and paid, and defense and

20  handling costs associated with all claims brought against

21  contract providers under this section.  This report shall be

22  forwarded to the department and included in the annual report

23  submitted to the Legislature pursuant to this section.

24         Section 1909.  Subsections (2) and (5), paragraph (a)

25  of subsection (6), subsection (7), and paragraph (c) of

26  subsection (9) of section 766.314, Florida Statutes, are

27  amended to read:

28         766.314  Assessments; plan of operation.--

29         (2)  The assessments and appropriations dedicated to

30  the plan shall be administered by the Florida Birth-Related

31  

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 1  Neurological Injury Compensation Association established in s.

 2  766.315, in accordance with the following requirements:

 3         (a)  On or before July 1, 1988, the directors of the

 4  association shall submit to the Department of Insurance for

 5  review a plan of operation which shall provide for the

 6  efficient administration of the plan and for prompt processing

 7  of claims against and awards made on behalf of the plan. The

 8  plan of operation shall include provision for:

 9         1.  Establishment of necessary facilities;

10         2.  Management of the funds collected on behalf of the

11  plan;

12         3.  Processing of claims against the plan;

13         4.  Assessment of the persons and entities listed in

14  subsections (4) and (5) to pay awards and expenses, which

15  assessments shall be on an actuarially sound basis subject to

16  the limits set forth in subsections (4) and (5); and

17         5.  Any other matters necessary for the efficient

18  operation of the birth-related neurological injury

19  compensation plan.

20         (b)  The plan of operation shall be subject to approval

21  by the Department of Insurance after consultation with

22  representatives of state agencies which collect revenue

23  pursuant to this section and interested individuals and

24  organizations.  If the Department of Insurance disapproves all

25  or any part of the plan of operation, the directors shall

26  within 30 days submit for review an appropriate revised plan

27  of operation.  If the directors fail to do so, the Department

28  of Insurance shall promulgate a plan of operation.  The plan

29  of operation approved or promulgated by the Department of

30  Insurance shall become effective and operational upon order of

31  the Department of Insurance.

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 1         (b)(c)  Amendments to the plan of operation may be made

 2  by the directors of the plan, subject to the approval of the

 3  Office of Insurance Regulation of the Financial Services

 4  Commission Department of Insurance.

 5         (5)(a)  Beginning January 1, 1990, the persons and

 6  entities listed in paragraphs (4)(b) and (c), except those

 7  persons or entities who are specifically excluded from said

 8  provisions, as of the date determined in accordance with the

 9  plan of operation, taking into account persons licensed

10  subsequent to the payment of the initial assessment, shall pay

11  an annual assessment in the amount equal to the initial

12  assessments provided in paragraphs (4)(b) and (c).  On January

13  1, 1991, and on each January 1 thereafter, the association

14  shall determine the amount of additional assessments necessary

15  pursuant to subsection (7), in the manner required by the plan

16  of operation, subject to any increase determined to be

17  necessary by the Office of Insurance Regulation Department of

18  Insurance pursuant to paragraph (7)(b).  On July 1, 1991, and

19  on each July 1 thereafter, the persons and entities listed in

20  paragraphs (4)(b) and (c), except those persons or entities

21  who are specifically excluded from said provisions, shall pay

22  the additional assessments which were determined on January 1.

23  Beginning January 1, 1990, the entities listed in paragraph

24  (4)(a), including those licensed on or after October 1, 1988,

25  shall pay an annual assessment of $50 per infant delivered

26  during the prior calendar year.  The additional assessments

27  which were determined on January 1, 1991, pursuant to the

28  provisions of subsection (7) shall not be due and payable by

29  the entities listed in paragraph (4)(a) until July 1.

30         (b)  If the assessments collected pursuant to

31  subsection (4) and the appropriation of funds provided by s.

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 1  76, chapter 88-1, Laws of Florida, as amended by s. 41,

 2  chapter 88-277, Laws of Florida, to the plan from the

 3  Insurance Commissioner's Regulatory Trust Fund are

 4  insufficient to maintain the plan on an actuarially sound

 5  basis, there is hereby appropriated for transfer to the

 6  association from the Insurance Commissioner's Regulatory Trust

 7  Fund an additional amount of up to $20 million.

 8         (c)1.  Taking into account the assessments collected

 9  pursuant to subsection (4) and appropriations from the

10  Insurance Commissioner's Regulatory Trust Fund, if required to

11  maintain the plan on an actuarially sound basis, the Office of

12  Insurance Regulation Department of Insurance shall require

13  each entity licensed to issue casualty insurance as defined in

14  s. 624.605(1)(b), (k), and (q) to pay into the association an

15  annual assessment in an amount determined by the office

16  department pursuant to paragraph (7)(a), in the manner

17  required by the plan of operation.

18         2.  All annual assessments shall be made on the basis

19  of net direct premiums written for the business activity which

20  forms the basis for each such entity's inclusion as a funding

21  source for the plan in the state during the prior year ending

22  December 31, as reported to the Office of Insurance Regulation

23  Department of Insurance, and shall be in the proportion that

24  the net direct premiums written by each carrier on account of

25  the business activity forming the basis for its inclusion in

26  the plan bears to the aggregate net direct premiums for all

27  such business activity written in this state by all such

28  entities.

29         3.  No entity listed in this paragraph shall be

30  individually liable for an annual assessment in excess of 0.25

31  percent of that entity's net direct premiums written.

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 1         4.  Casualty insurance carriers shall be entitled to

 2  recover their initial and annual assessments through a

 3  surcharge on future policies, a rate increase applicable

 4  prospectively, or a combination of the two.

 5         (6)(a)  The association shall make all assessments

 6  required by this section, except initial assessments of

 7  physicians licensed on or after October 1, 1988, which

 8  assessments will be made by the Department of Business and

 9  Professional Regulation, and except assessments of casualty

10  insurers pursuant to subparagraph (5)(c)1., which assessments

11  will be made by the Office of Insurance Regulation Department

12  of Insurance. Beginning October 1, 1989, for any physician

13  licensed between October 1 and December 31 of any year, the

14  Department of Business and Professional Regulation shall make

15  the initial assessment plus the assessment for the following

16  calendar year. The Department of Business and Professional

17  Regulation shall provide the association, with such frequency

18  as determined to be necessary, a listing, in a

19  computer-readable form, of the names and addresses of all

20  physicians licensed under chapter 458 or chapter 459.

21         (7)(a)  The Office of Insurance Regulation Department

22  of Insurance shall undertake an actuarial investigation of the

23  requirements of the plan based on the plan's experience in the

24  first year of operation and any additional relevant

25  information, including without limitation the assets and

26  liabilities of the plan. Pursuant to such investigation, the

27  Office of Insurance Regulation Department of Insurance shall

28  establish the rate of contribution of the entities listed in

29  paragraph (5)(c) for the tax year beginning January 1, 1990.

30  Following the initial valuation, the Office of Insurance

31  Regulation Department of Insurance shall cause an actuarial

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 1  valuation to be made of the assets and liabilities of the plan

 2  no less frequently than biennially. Pursuant to the results of

 3  such valuations, the Office of Insurance Regulation Department

 4  of Insurance shall prepare a statement as to the contribution

 5  rate applicable to the entities listed in paragraph (5)(c).

 6  However, at no time shall the rate be greater than 0.25

 7  percent of net direct premiums written.

 8         (b)  If the Office of Insurance Regulation Department

 9  of Insurance finds that the plan cannot be maintained on an

10  actuarially sound basis based on the assessments and

11  appropriations listed in subsections (4) and (5), the office

12  department shall increase the assessments specified in

13  subsection (4) on a proportional basis as needed.

14         (9)

15         (c)  In the event the total of all current estimates

16  equals 80 percent of the funds on hand and the funds that will

17  become available to the association within the next 12 months

18  from all sources described in subsections (4) and (5) and

19  paragraph (7)(a), the association shall not accept any new

20  claims without express authority from the Legislature. Nothing

21  herein shall preclude the association from accepting any claim

22  if the injury occurred 18 months or more prior to the

23  effective date of this suspension. Within 30 days of the

24  effective date of this suspension, the association shall

25  notify the Governor, the Speaker of the House of

26  Representatives, the President of the Senate, the Office of

27  Insurance Regulation Department of Insurance, the Agency for

28  Health Care Administration, the Department of Health, and the

29  Department of Business and Professional Regulation of this

30  suspension.

31  

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 1         Section 1910.  Paragraph (c) of subsection (1),

 2  subsection (2), and paragraph (d) of subsection (5) of section

 3  766.315, Florida Statutes, are amended to read:

 4         766.315  Florida Birth-Related Neurological Injury

 5  Compensation Association; board of directors.--

 6         (1)

 7         (c)  The directors shall be appointed by the Chief

 8  Financial Officer Insurance Commissioner as follows:

 9         1.  One citizen representative.

10         2.  One representative of participating physicians.

11         3.  One representative of hospitals.

12         4.  One representative of casualty insurers.

13         5.  One representative of physicians other than

14  participating physicians.

15         (2)(a)  The Chief Financial Officer Insurance

16  Commissioner may select the representative of the

17  participating physicians from a list of at least three names

18  to be recommended by the Florida Obstetric and Gynecologic

19  Society; the representative of hospitals from a list of at

20  least three names to be recommended by the Florida Hospital

21  Association; the representative of casualty insurers from a

22  list of at least three names, one of which is recommended by

23  the American Insurance Association, one by the Alliance of

24  American Insurers, and one by the National Association of

25  Independent Insurers; and the representative of physicians

26  other than participating physicians from a list of three names

27  to be recommended by the Florida Medical Association and a

28  list of three names to be recommended by the Florida

29  Osteopathic Medical Association.  In no case shall the Chief

30  Financial Officer Insurance Commissioner be bound to make any

31  

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 1  appointment from among the nominees of such respective

 2  associations.

 3         (b)  The Chief Financial Officer Insurance Commissioner

 4  shall promptly notify the appropriate medical association upon

 5  the occurrence of any vacancy, and like nominations may be

 6  made for the filling of the vacancy.

 7         (5)

 8         (d)  Annually, the association shall furnish audited

 9  financial reports to any plan participant upon request, to the

10  Office of Insurance Regulation of the Financial Services

11  Commission Department of Insurance, and to the Joint

12  Legislative Auditing Committee. The reports must be prepared

13  in accordance with accepted accounting procedures and must

14  include such information as may be required by the Office of

15  Insurance Regulation Department of Insurance or the Joint

16  Legislative Auditing Committee.  At any time determined to be

17  necessary, the Office of Insurance Regulation Department of

18  Insurance or the Joint Legislative Auditing Committee may

19  conduct an audit of the plan.

20         Section 1911.  Subsection (3), paragraphs (a) and (d)

21  of subsection (6), and subsection (7) of section 768.28,

22  Florida Statutes, are amended to read:

23         768.28  Waiver of sovereign immunity in tort actions;

24  recovery limits; limitation on attorney fees; statute of

25  limitations; exclusions; indemnification; risk management

26  programs.--

27         (3)  Except for a municipality and the Florida Space

28  Authority, the affected agency or subdivision may, at its

29  discretion, request the assistance of the Department of

30  Financial Services Insurance in the consideration, adjustment,

31  and settlement of any claim under this act.

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 1         (6)(a)  An action may not be instituted on a claim

 2  against the state or one of its agencies or subdivisions

 3  unless the claimant presents the claim in writing to the

 4  appropriate agency, and also, except as to any claim against a

 5  municipality or the Florida Space Authority, presents such

 6  claim in writing to the Department of Financial Services

 7  Insurance, within 3 years after such claim accrues and the

 8  Department of Financial Services Insurance or the appropriate

 9  agency denies the claim in writing; except that, if such claim

10  is for contribution pursuant to s. 768.31, it must be so

11  presented within 6 months after the judgment against the

12  tortfeasor seeking contribution has become final by lapse of

13  time for appeal or after appellate review or, if there is no

14  such judgment, within 6 months after the tortfeasor seeking

15  contribution has either discharged the common liability by

16  payment or agreed, while the action is pending against her or

17  him, to discharge the common liability.

18         (d)  For purposes of this section, complete, accurate,

19  and timely compliance with the requirements of paragraph (c)

20  shall occur prior to settlement payment, close of discovery or

21  commencement of trial, whichever is sooner; provided the

22  ability to plead setoff is not precluded by the delay. This

23  setoff shall apply only against that part of the settlement or

24  judgment payable to the claimant, minus claimant's reasonable

25  attorney's fees and costs.  Incomplete or inaccurate

26  disclosure of unpaid adjudicated claims due the state, its

27  agency, officer, or subdivision, may be excused by the court

28  upon a showing by the preponderance of the evidence of the

29  claimant's lack of knowledge of an adjudicated claim and

30  reasonable inquiry by, or on behalf of, the claimant to obtain

31  the information from public records. Unless the appropriate

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 1  agency had actual notice of the information required to be

 2  disclosed by paragraph (c) in time to assert a setoff, an

 3  unexcused failure to disclose shall, upon hearing and order of

 4  court, cause the claimant to be liable for double the original

 5  undisclosed judgment and, upon further motion, the court shall

 6  enter judgment for the agency in that amount.  The failure of

 7  the Department of Financial Services Insurance or the

 8  appropriate agency to make final disposition of a claim within

 9  6 months after it is filed shall be deemed a final denial of

10  the claim for purposes of this section.  For purposes of this

11  subsection, in medical malpractice actions, the failure of the

12  Department of Financial Services Insurance or the appropriate

13  agency to make final disposition of a claim within 90 days

14  after it is filed shall be deemed a final denial of the claim.

15  The provisions of this subsection do not apply to such claims

16  as may be asserted by counterclaim pursuant to s. 768.14.

17         (7)  In actions brought pursuant to this section,

18  process shall be served upon the head of the agency concerned

19  and also, except as to a defendant municipality or the Florida

20  Space Authority, upon the Department of Financial Services

21  Insurance; and the department or the agency concerned shall

22  have 30 days within which to plead thereto.

23         Section 1912.  Subsection (5) of section 790.001,

24  Florida Statutes, is amended to read:

25         790.001  Definitions.--As used in this chapter, except

26  where the context otherwise requires:

27         (5)  "Explosive" means any chemical compound or mixture

28  that has the property of yielding readily to combustion or

29  oxidation upon application of heat, flame, or shock, including

30  but not limited to dynamite, nitroglycerin, trinitrotoluene,

31  or ammonium nitrate when combined with other ingredients to

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 1  form an explosive mixture, blasting caps, and detonators; but

 2  not including:

 3         (a)  Shotgun shells, cartridges, or ammunition for

 4  firearms;

 5         (b)  Fireworks as defined in s. 791.01;

 6         (c)  Smokeless propellant powder or small arms

 7  ammunition primers, if possessed, purchased, sold,

 8  transported, or used in compliance with s. 552.241;

 9         (d)  Black powder in quantities not to exceed that

10  authorized by chapter 552, or by any rules adopted or

11  regulations promulgated thereunder by the Department of

12  Financial Services Insurance, when used for, or intended to be

13  used for, the manufacture of target and sporting ammunition or

14  for use in muzzle-loading flint or percussion weapons.

15  

16  The exclusions contained in paragraphs (a)-(d) do not apply to

17  the term "explosive" as used in the definition of "firearm" in

18  subsection (6).

19         Section 1913.  Section 790.1612, Florida Statutes, is

20  amended to read:

21         790.1612  Authorization for governmental manufacture,

22  possession, and use of destructive devices.--The governing

23  body of any municipality or county and the Division of State

24  Fire Marshal of the Department of Financial Services Insurance

25  have the power to authorize the manufacture, possession, and

26  use of destructive devices as defined in s. 790.001(4).

27         Section 1914.  Subsection (2) of section 791.01,

28  Florida Statutes, is amended to read:

29         791.01  Definitions.--As used in this chapter, the

30  term:

31  

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 1         (2)  "Division" means the Division of the State Fire

 2  Marshal of the Department of Financial Services Insurance.

 3         Section 1915.  Paragraph (b) of subsection (3) of

 4  section 791.015, Florida Statutes, is amended to read:

 5         791.015  Registration of manufacturers, distributors,

 6  wholesalers, and retailers of sparklers.--

 7         (3)  FEES.--

 8         (b)  Revenue from registration fee payments shall be

 9  deposited in the Insurance Commissioner's Regulatory Trust

10  Fund for the purposes of implementing the registration and

11  testing provisions of this chapter.

12         Section 1916.  Section 817.16, Florida Statutes, is

13  amended to read:

14         817.16  False reports, etc., by officers of banks,

15  trust companies, etc., under supervision of Department of

16  Banking and Finance with intent to defraud.--Any officer,

17  director, agent or clerk of any bank, trust company, building

18  and loan association, small loan licensee, credit union, or

19  other corporation under the supervision of the Office of

20  Financial Institutions and Securities Regulation of the

21  Financial Services Commission or formerly the Department of

22  Banking and Finance, who willfully and knowingly subscribes or

23  exhibits any false paper with intent to deceive any person

24  authorized to examine as to the records of such bank, trust

25  company, building and loan association, small loan licensee,

26  credit union, or other corporation under the supervision of

27  the Office of Financial Institution and Securities Regulation

28  or formerly the Department of Banking and Finance, or

29  willfully and knowingly subscribes to or makes any false

30  reports to the Office of Financial Institutions and Securities

31  Regulation or subscribed to or made any such false report to

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 1  the Department of Banking and Finance or causes to be

 2  published any false report, shall be guilty of a felony of the

 3  third degree, punishable as provided s. 775.082 or s. 775.083.

 4         Section 1917.  Paragraph (b) of subsection (1),

 5  paragraph (b) of subsection (2), and subsection (10) of

 6  section 817.234, Florida Statutes, are amended to read:

 7         817.234  False and fraudulent insurance claims.--

 8         (1)

 9         (b)  All claims and application forms shall contain a

10  statement that is approved by the Office of Insurance

11  Regulation of the Financial Services Commission which

12  Department of Insurance that clearly states in substance the

13  following: "Any person who knowingly and with intent to

14  injure, defraud, or deceive any insurer files a statement of

15  claim or an application containing any false, incomplete, or

16  misleading information is guilty of a felony of the third

17  degree."  This paragraph shall not apply to reinsurance

18  contracts, reinsurance agreements, or reinsurance claims

19  transactions.

20         (2)

21         (b)  In addition to any other provision of law,

22  systematic upcoding by a provider, as defined in s. 641.19(14)

23  s. 641.19(15), with the intent to obtain reimbursement

24  otherwise not due from an insurer is punishable as provided in

25  s. 641.52(5).

26         (10)  As used in this section, the term "insurer" means

27  any insurer, health maintenance organization, self-insurer,

28  self-insurance fund, or other similar entity or person

29  regulated under chapter 440 or chapter 641 or by the Office of

30  Insurance Regulation Department of Insurance under the Florida

31  Insurance Code.

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 1         Section 1918.  Section 817.2341, Florida Statutes, is

 2  amended to read:

 3         817.2341  False or misleading statements or supporting

 4  documents; penalty.--

 5         (1)  Any person who willfully files with the department

 6  or office, or who willfully signs for filing with the

 7  department or office, a materially false or materially

 8  misleading financial statement or document in support of such

 9  statement required by law or rule, with intent to deceive and

10  with knowledge that the statement or document is materially

11  false or materially misleading, commits a felony of the third

12  degree, punishable as provided in s. 775.082, s. 775.083, or

13  s. 775.084.

14         (2)(a)  Any person who makes a false entry of a

15  material fact in any book, report, or statement relating to a

16  transaction of an insurer or entity organized pursuant to

17  chapter 624 or chapter 641, intending to deceive any person

18  about the financial condition or solvency of the insurer or

19  entity, commits a felony of the third degree, punishable as

20  provided in s. 775.082, s. 775.083, or s. 775.084.

21         (b)  If the false entry of a material fact is made with

22  the intent to deceive any person as to the impairment of

23  capital, as defined in s. 631.011(12), of the insurer or

24  entity or is the significant cause of the insurer or entity

25  being placed in conservation, rehabilitation, or liquidation

26  by a court, the person commits a felony of the first degree,

27  punishable as provided in s. 775.082, s. 775.083, or s.

28  775.084.

29         (3)(a)  Any person who knowingly makes a material false

30  statement or report to the department or office or any agent

31  of the department or office, or knowingly and materially

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 1  overvalues any property in any document or report prepared to

 2  be presented to the department or office or any agent of the

 3  department or office, commits a felony of the third degree,

 4  punishable as provided in s. 775.082, s. 775.083, or s.

 5  775.084.

 6         (b)  If the material false statement or report or the

 7  material overvaluation is made with the intent to deceive any

 8  person as to the impairment of capital, as defined in s.

 9  631.011(12), of an insurer or entity organized pursuant to

10  chapter 624 or chapter 641, or is the significant cause of the

11  insurer or entity being placed in receivership by a court, the

12  person commits a felony of the first degree, punishable as

13  provided in s. 775.082, s. 775.083, or s. 775.084.

14         (4)  As used in this section, the term:

15         (a)  "Department" means the Department of Financial

16  Services.

17         (b)  "Office" means the Office of Insurance Regulation

18  of the Financial Services Commission.

19         Section 1919.  Subsection (1) of section 817.50,

20  Florida Statutes, is amended to read:

21         817.50  Fraudulently obtaining goods, services, etc.,

22  from a health care provider.--

23         (1)  Whoever shall, willfully and with intent to

24  defraud, obtain or attempt to obtain goods, products,

25  merchandise, or services from any health care provider in this

26  state, as defined in s. 641.19(14) s. 641.19(15), commits a

27  misdemeanor of the second degree, punishable as provided in s.

28  775.082 or s. 775.083.

29         Section 1920.  Section 839.06, Florida Statutes, is

30  amended to read:

31  

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 1         839.06  Collectors not to deal in warrants, etc.;

 2  removal.--No tax collector of any county shall, either

 3  directly or indirectly, purchase or receive in exchange any

 4  Chief Financial Officer's or the former Comptroller's

 5  warrants, county orders, jurors' certificates or school

 6  district orders for a less amount than expressed on the face

 7  of such orders or demand, and any such person so offending

 8  shall, for each offense, be deemed guilty of a misdemeanor of

 9  the first degree, punishable as provided in s. 775.083, and be

10  removed from office.

11         Section 1921.  Paragraph (d) of subsection (5) and

12  paragraph (c) of subsection (13) of section 849.086, Florida

13  Statutes, are amended to read:

14         849.086  Cardrooms authorized.--

15         (5)  LICENSE REQUIRED; APPLICATION; FEES.--No person

16  may operate a cardroom in this state unless such person holds

17  a valid cardroom license issued pursuant to this section.

18         (d)  The annual cardroom license fee shall be $1,000

19  for the first table and $500 for each additional table to be

20  operated at the cardroom.  This license fee shall be deposited

21  by the division with the Chief Financial Officer Treasurer to

22  the credit of the Pari-mutuel Wagering Trust Fund.

23         (13)  TAXES AND OTHER PAYMENTS.--

24         (c)  Payment of the admission tax and gross receipts

25  tax imposed by this section shall be paid to the division. The

26  division shall deposit these sums with the Chief Financial

27  Officer Treasurer, one-half being credited to the Pari-mutuel

28  Wagering Trust Fund and one-half being credited to the General

29  Revenue Fund.  The cardroom licensee shall remit to the

30  division payment for the admission tax, the gross receipts

31  tax, and the licensee fees.  Such payments shall be remitted

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 1  to the division on the fifth day of each calendar month for

 2  taxes and fees imposed for the preceding month's cardroom

 3  activities.  Licensees shall file a report under oath by the

 4  fifth day of each calendar month for all taxes remitted during

 5  the preceding calendar month.  Such report shall, under oath,

 6  indicate the total of all admissions, the cardroom activities

 7  for the preceding calendar month, and such other information

 8  as may be prescribed by the division.

 9         Section 1922.  Section 849.33, Florida Statutes, is

10  amended to read:

11         849.33  Judgment and collection of money;

12  execution.--Any judgment recovered in such a suit shall

13  adjudge separately the amounts recovered for the use of the

14  state, and the plaintiff shall not have execution therefor,

15  and such amounts shall not be paid to the plaintiff, but shall

16  be payable to the state attorney, who shall promptly transmit

17  the sums collected by him or her to the Chief Financial

18  Officer State Treasurer. The state attorney shall diligently

19  seek the collection of such amounts and may cause a separate

20  execution to issue for the collection thereof.

21         Section 1923.  Subsection (1) of section 860.154,

22  Florida Statutes, is amended to read:

23         860.154  Florida Motor Vehicle Theft Prevention

24  Authority.--

25         (1)  There is hereby established within the Department

26  of Legal Affairs the Florida Motor Vehicle Theft Prevention

27  Authority, which shall exercise its powers, duties, and

28  responsibilities independently of the department.  The

29  purposes, powers, and duties of the authority shall be vested

30  in and exercised by a board of directors.  There shall be nine

31  members of the board, consisting of the Chief Financial

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 1  Officer commissioner of the Department of Insurance or his or

 2  her the commissioner's designee; the executive director of the

 3  Department of Highway Safety and Motor Vehicles; the executive

 4  director of the Department of Law Enforcement; six additional

 5  members, each of whom shall be appointed by the Attorney

 6  General: a state attorney or city or county executive, a chief

 7  executive law enforcement official, a sheriff, one

 8  representative of companies authorized to sell motor vehicle

 9  insurance, one representative of insurers authorized to write

10  motor vehicle insurance in this state, and one representative

11  of purchasers of motor vehicle insurance in this state who is

12  not employed by or connected with the business of insurance.

13         Section 1924.  Subsection (7) of section 860.157,

14  Florida Statutes, is amended to read:

15         860.157  Powers and duties of the authority.--The

16  authority shall have the following powers, duties, and

17  responsibilities:

18         (7)  To report annually, on or before January 1, to the

19  Governor, Attorney General, Chief Financial Officer Insurance

20  Commissioner, President of the Senate, Speaker of the House of

21  Representatives, Minority Leader of the House of

22  Representatives, Minority Leader of the Senate, and

23  appropriate committee chairs in the House of Representatives

24  and the Senate, and, upon request, to members of the general

25  public on the authority's activities in the preceding year.

26         Section 1925.  Subsections (1) and (2) of section

27  896.102, Florida Statutes, are amended to read:

28         896.102  Currency more than $10,000 received in trade

29  or business; report required; noncompliance penalties.--

30         (1)  All persons engaged in a trade or business, except

31  for those financial institutions that report to the Office of

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 1  Financial Institutions and Securities Regulation Comptroller

 2  pursuant to s. 655.50, who receive more than $10,000 in

 3  currency, including foreign currency, in one transaction, or

 4  who receive this amount through two or more related

 5  transactions, must complete and file with the Department of

 6  Revenue the information required pursuant to 26 U.S.C. s.

 7  6050I., concerning returns relating to currency received in

 8  trade or business. Any person who willfully fails to comply

 9  with the reporting requirements of this subsection is guilty

10  of a misdemeanor of the first degree, punishable as provided

11  in s. 775.082, or by a fine not exceeding $250,000 or twice

12  the value of the amount of the currency transaction involved,

13  whichever is greater, or by both such imprisonment and fine.

14  For a second or subsequent conviction of a violation of the

15  provisions of this subsection, the maximum fine that may be

16  imposed is $500,000 or quintuple the value of the amount of

17  the currency transaction involved, whichever is greater.

18         (2)  The Department of Revenue shall enforce compliance

19  with the provisions of subsection (1) and is to be the

20  custodian of all information and documents filed pursuant to

21  subsection (1). Such information and documents are

22  confidential and exempt from the provisions of s. 119.07(1)

23  and s. 24(a), Art. I of the State Constitution; however, the

24  department must provide any report filed under this section,

25  or information contained therein, to federal, state, and local

26  law enforcement and prosecutorial agencies, and to the

27  Department of Financial Services, and to the Office of

28  Financial Institutions and Securities Regulation Banking and

29  Finance, and the information is subject to disclosure pursuant

30  to subpoena as provided in s. 213.053(8).

31  

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 1         Section 1926.  Subsection (5) of section 896.104,

 2  Florida Statutes, is amended to read:

 3         896.104  Structuring transactions to evade reporting or

 4  registration requirements prohibited.--

 5         (5)  INFERENCE.--Proof that a person engaged for

 6  monetary consideration in the business of a funds transmitter

 7  as defined in s. 560.103(10) s. 560.103(9) and who is

 8  transporting more than $10,000 in currency, or foreign

 9  equivalent, without being registered as a money transmitter or

10  designated as an authorized vendor under the provisions of

11  chapter 560, gives rise to an inference that the

12  transportation was done with knowledge of the registration

13  requirements of chapter 560 and the reporting requirements of

14  this chapter.

15         Section 1927.  Subsection (2) of section 903.09,

16  Florida Statutes, is amended to read:

17         903.09  Justification of sureties.--

18         (2)  A bond agent, as defined in s. 648.25(2) s.

19  648.25(1), shall justify her or his suretyship by attaching a

20  copy of the power of attorney issued by the company to the

21  bond or by attaching to the bond United States currency, a

22  United States postal money order, or a cashier's check in the

23  amount of the bond; but the United States currency, United

24  States postal money order, or cashier's check cannot be used

25  to secure more than one bond.  Nothing herein shall prohibit

26  two or more qualified sureties from each posting any portion

27  of a bond amount, and being liable for only that amount, so

28  long as the total posted by all cosureties is equal to the

29  amount of bond required.

30         Section 1928.  Section 903.101, Florida Statutes, is

31  amended to read:

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 1         903.101  Sureties; licensed persons; to have equal

 2  access.--Subject to rules adopted regulations promulgated by

 3  the Department of Financial Services and by the Financial

 4  Services Commission Insurance, every surety who meets the

 5  requirements of ss.  903.05, 903.06, 903.08, and 903.09, and

 6  every person who is currently licensed by the Department of

 7  Financial Services Insurance and registered as required by s.

 8  648.42 shall have equal access to the jails of this state for

 9  the purpose of making bonds.

10         Section 1929.  Subsection (1) of section 903.27,

11  Florida Statutes, is amended to read:

12         903.27  Forfeiture to judgment.--

13         (1)  If the forfeiture is not paid or discharged by

14  order of a court of competent jurisdiction within 60 days and

15  the bond is secured other than by money and bonds authorized

16  in s. 903.16, the clerk of the circuit court for the county

17  where the order was made shall enter a judgment against the

18  surety for the amount of the penalty and issue execution.

19  Within 10 days, the clerk shall furnish the Department of

20  Financial Services and the Office of Insurance Regulation of

21  the Financial Services Commission Insurance with a certified

22  copy of the judgment docket and shall furnish the surety

23  company at its home office a copy of the judgment, which shall

24  include the power of attorney number of the bond and the name

25  of the executing agent.  If the judgment is not paid within 35

26  days, the clerk shall furnish the Department of Financial

27  Services, the Office of Insurance Regulation, Insurance and

28  the sheriff of the county in which the bond was executed, or

29  the official responsible for operation of the county jail, if

30  other than the sheriff, two copies of the judgment and a

31  certificate stating that the judgment remains unsatisfied.

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 1  When and if the judgment is properly paid or an order to

 2  vacate the judgment has been entered by a court of competent

 3  jurisdiction, the clerk shall immediately notify the sheriff,

 4  or the official responsible for the operation of the county

 5  jail, if other than the sheriff, and the Department of

 6  Financial Services and the Office of Insurance Regulation

 7  Insurance, if the department and office had been previously

 8  notified of nonpayment, of such payment or order to vacate the

 9  judgment.  The clerk shall also immediately prepare and record

10  in the public records a satisfaction of the judgment or record

11  the order to vacate judgment. If the defendant is returned to

12  the county of jurisdiction of the court, whenever a motion to

13  set aside the judgment is filed, the operation of this section

14  is tolled until the court makes a disposition of the motion.

15         Section 1930.  Paragraph (a) and (b) of subsection (5)

16  of section 925.037, Florida Statutes, are amended to read:

17         925.037  Reimbursement of counties for fees paid to

18  appointed counsel; circuit conflict committees.--

19         (5)(a)  The clerk of the circuit court in each county

20  shall submit to the Justice Administrative Commission a

21  statement of conflict counsel fees at least annually. Such

22  statement shall identify total expenditures incurred by the

23  county on fees of counsel appointed by the court pursuant to

24  this section where such fees are taxed against the county by

25  judgment of the court. On the basis of such statement of

26  expenditures, the Justice Administrative Commission shall pay

27  state conflict case appropriations to the county. The

28  statement of conflict counsel fees shall be on a form

29  prescribed by the Justice Administrative Commission in

30  consultation with the Legislative Committee on

31  Intergovernmental Relations and the Chief Financial Officer

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 1  Comptroller. Such form also shall provide for the separate

 2  reporting of total expenditures made by the county on attorney

 3  fees in cases in which other counsel were appointed by the

 4  court where the public defender was unable to accept the case

 5  as a result of a stated lack of resources. To facilitate such

 6  expenditure identification and reporting, the public defender,

 7  within 7 days of the appointment of such counsel by the court,

 8  shall report to the clerk of circuit court case-related

 9  information sufficient to permit the clerk to identify

10  separately county expenditures on fees of such counsel. No

11  county shall be required to submit any additional information

12  to the commission on an annual or other basis in order to

13  document or otherwise verify the expenditure information

14  provided on the statement of conflict counsel fees form,

15  except as provided in paragraph (c).

16         (b)  Before September 30 of each year, the clerk of the

17  circuit court in each county shall submit to the Justice

18  Administrative Commission a report of conflict counsel

19  expenses and costs for the previous local government fiscal

20  year. Such report shall identify expenditures incurred by the

21  county on expenses and costs of counsel appointed by the court

22  pursuant to this section where such expenses and costs are

23  taxed against the county by judgment of the court. Such report

24  of expenditures shall be on a form prescribed by the

25  commission in consultation with the Legislative Committee on

26  Intergovernmental Relations and the Chief Financial Officer

27  Comptroller, provided that such form shall at a minimum

28  separately identify total county expenditures for witness fees

29  and expenses, court reporter fees and costs, and defense

30  counsel travel and per diem. Such form also shall provide for

31  the separate reporting of total county expenditures on

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 1  attorney expenses and costs in cases in which other counsel

 2  were appointed by the court where the public defender was

 3  unable to accept the case as a result of a stated lack of

 4  resources. To facilitate such expenditure identification and

 5  reporting, the public defender, within 7 days of the

 6  appointment of such counsel by the court, shall report to the

 7  clerk of the circuit court case-related information sufficient

 8  to permit the clerk to identify separately county expenditures

 9  on expenses and costs of such counsel. No county shall be

10  required to submit any additional information to the Justice

11  Administrative Commission on an annual or other basis in order

12  to document or otherwise verify the expenditure information

13  provided on the report of conflict counsel expenses and costs

14  form, except as provided in paragraph (c).

15         Section 1931.  Paragraph (b) of subsection (8) of

16  section 932.7055, Florida Statutes, is amended to read:

17         932.7055  Disposition of liens and forfeited

18  property.--

19         (8)

20         (b)  The Department of Law Enforcement shall submit an

21  annual report to the criminal justice committees of the House

22  of Representatives and of the Senate compiling the information

23  and data related in the semiannual reports submitted by the

24  law enforcement agencies.  The annual report shall also

25  contain a list of law enforcement agencies which have failed

26  to meet the reporting requirements and a summary of any action

27  which has been taken against the noncomplying agency by the

28  Office of the Chief Financial Officer Comptroller.

29         Section 1932.  Section 932.707, Florida Statutes, is

30  amended to read:

31  

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 1         932.707  Penalty for noncompliance with reporting

 2  requirements.--Any seizing agency which fails to comply with

 3  the reporting requirements as described in s. 932.7055(8)(a),

 4  is subject to a civil fine of $5,000 payable to the General

 5  Revenue Fund.  However, such agency will not be subject to the

 6  fine if, within 60 days of receipt of written notification

 7  from the Department of Law Enforcement of the noncompliance

 8  with the reporting requirements of the Florida Contraband

 9  Forfeiture Act, the agency substantially complies with said

10  requirements.  The Department of Law Enforcement shall submit

11  any substantial noncompliance to the Office of the Chief

12  Financial Officer Comptroller, which shall be responsible for

13  the enforcement of this section.

14         Section 1933.  Subsection (1) of section 938.27,

15  Florida Statutes, is amended to read:

16         938.27  Judgment for costs on conviction.--

17         (1)  In all criminal cases the costs of prosecution,

18  including investigative costs incurred by law enforcement

19  agencies, by fire departments for arson investigations, and by

20  investigations of the Division of Financial Investigations of

21  the Department of Financial Services or the Office of

22  Financial Institutions and Securities Regulation of the

23  Financial Services Commission Banking and Finance, if

24  requested and documented by such agencies, shall be included

25  and entered in the judgment rendered against the convicted

26  person.

27         Section 1934.  Section 939.13, Florida Statutes, is

28  amended to read:

29         939.13  Power of Chief Financial Officer

30  Comptroller.--The Chief Financial Officer Comptroller may

31  audit and approve or disapprove any claim or any item thereof

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 1  against the state for costs, fees or expenses of criminal

 2  cases prosecuted in the name of the state, and for which the

 3  state is liable, if the Chief Financial Officer Comptroller is

 4  satisfied that the same is legal, just, necessary and correct

 5  or otherwise, and may prescribe forms and methods for the

 6  same.  The Chief Financial Officer Comptroller shall not

 7  dispense with any of the requirements of law relative to the

 8  auditing and payment of such accounts, but may prescribe

 9  additional requirements.

10         Section 1935.  Paragraph (h) of subsection (1) of

11  section 943.031, Florida Statutes, is amended to read:

12         943.031  Florida Violent Crime and Drug Control

13  Council.--The Legislature finds that there is a need to

14  develop and implement a statewide strategy to address violent

15  criminal activity and drug control efforts by state and local

16  law enforcement agencies, including investigations of illicit

17  money laundering. In recognition of this need, the Florida

18  Violent Crime and Drug Control Council is created within the

19  department. The council shall serve in an advisory capacity to

20  the department.

21         (1)  MEMBERSHIP.--The council shall consist of 14

22  members, as follows:

23         (h)  The Chief Financial Officer Comptroller, or a

24  designate.

25  

26  The Governor, when making appointments under this subsection,

27  must take into consideration representation by geography,

28  population, ethnicity, and other relevant factors to ensure

29  that the membership of the council is representative of the

30  state at large. Designates appearing on behalf of a council

31  member who is unable to attend a meeting of the council are

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 1  empowered to vote on issues before the council to the same

 2  extent the designating council member is so empowered.

 3         Section 1936.  Subsection (2) of section 943.032,

 4  Florida Statutes, is amended to read:

 5         943.032  Financial Crime Analysis Center and Financial

 6  Transaction Database.--

 7         (2)  The department shall compile information and data

 8  available from financial transaction reports required to be

 9  submitted by state or federal law that are provided to the

10  Department of Financial Services, to the Office of Financial

11  Institutions and Securities Regulation of the Financial

12  Services Commission Banking and Finance, to the Department of

13  Revenue, or to which the department otherwise has access.

14  Information and data so received shall be utilized by the

15  department in the Financial Transaction Database.  The

16  department shall implement a system utilizing the database

17  that allows data review and processing to reveal patterns,

18  trends, and correlations that are indicative of money

19  laundering or other financial transactions indicative of

20  criminal activity.  The department shall, in consultation with

21  the Department of Financial Services, the Office of Financial

22  Institutions and Securities Regulation of the Financial

23  Services Commission, Banking and Finance and the Department of

24  Revenue, establish the methods and parameters by which

25  information and data received by such agencies the Department

26  of Banking and Finance or the Department of Revenue are

27  transferred to the department for inclusion in the database.

28  Information developed in or through the use of the database

29  shall be made available to law enforcement agencies and

30  prosecutors in this state in a manner defined by the

31  department and as allowed by state or federal law or

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 1  regulation.  All information contained in the database shall

 2  be considered "active criminal intelligence" or "active

 3  criminal investigative information" as defined in s. 119.011.

 4         Section 1937.  Subsections (3) and (4) of section

 5  944.516, Florida Statutes, are amended to read:

 6         944.516  Money or other property received for personal

 7  use or benefit of inmate; deposit; disposition of unclaimed

 8  trust funds.--The Department of Corrections shall protect the

 9  financial interest of the state with respect to claims which

10  the state may have against inmates in state institutions under

11  its supervision and control and shall administer money and

12  other property received for the personal benefit of such

13  inmates.  In carrying out the provisions of this section, the

14  department may delegate any of its enumerated powers and

15  duties affecting inmates of an institution to the warden or

16  regional director who shall personally, or through designated

17  employees of his or her personal staff under his or her direct

18  supervision, exercise such powers or perform such duties.

19         (3)  Moneys received by the department in payment of

20  claims of the state against inmates shall be transmitted to

21  the Chief Financial Officer Treasurer for deposit into the

22  General Revenue Fund.

23         (4)  Upon the death of any inmate in an institution

24  affected by the provisions of this section, any unclaimed

25  money held for the inmate in trust by the department or by the

26  Chief Financial Officer Treasurer shall be applied first to

27  the payment of any unpaid state claim against the inmate, and

28  any balance remaining unclaimed for a period of 1 year shall

29  escheat to the state as unclaimed funds held by fiduciaries.

30         Section 1938.  Section 946.33, Florida Statutes, is

31  amended to read:

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 1         946.33  Disbursements from fund.--The funds in the

 2  Correctional Work Program Trust Fund shall be deposited in the

 3  State Treasury and paid out only on warrants drawn by the

 4  Chief Financial Officer Comptroller, duly approved by the

 5  Department of Corrections.  The department shall maintain all

 6  necessary records and accounts relative to such funds.

 7         Section 1939.  Subsection (2) of section 946.509,

 8  Florida Statutes, is amended to read:

 9         946.509  Insurance of property leased or acquired by

10  the corporation.--

11         (2)  Coverage under the State Risk Management Trust

12  Fund of property leased to or otherwise acquired by the

13  corporation shall be secured and maintained through the

14  existing policy and account of the Department of Corrections

15  with the Division of Risk Management of the Department of

16  Financial Services Insurance.  All matters, including premium

17  calculations, assessments and payments, retrospective premium

18  adjustments, reporting requirements, and other requirements,

19  concerning coverage of such property under the State Risk

20  Management Trust Fund shall be conducted as if all such

21  property were owned solely by the department. Except as

22  required by chapter 284, if the corporation finds that it is

23  more economical to do so, the corporation may secure private

24  insurance coverage on all or a portion of the activities of or

25  properties used by the corporation. If coverage through the

26  State Risk Management Trust Fund is not secured, the

27  corporation must present documentation of insurance coverage

28  to the Division of Risk Management equal to the coverage that

29  could otherwise be provided by the State Risk Management Trust

30  Fund.

31  

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 1         Section 1940.  Section 946.5095, Florida Statutes, is

 2  amended to read:

 3         946.5095  Elimination of hazardous

 4  conditions.--Pursuant to the applicable provisions of part I

 5  of chapter 284, whenever state-insured property leased to or

 6  otherwise held by the corporation is inspected by the Division

 7  of Risk Management of the Department of Financial Services and

 8  any condition is found to exist which, in the opinion of the

 9  division, is hazardous from the standpoint of destruction by

10  fire or other insurable causes, the corporation shall either

11  promptly repair the property to eliminate any observed hazard

12  or otherwise promptly remove the hazardous condition at its

13  own expense.

14         Section 1941.  Section 946.510, Florida Statutes, is

15  amended to read:

16         946.510  Insurance by Division of Risk

17  Management.--Pursuant to the applicable provisions of chapter

18  284, the Division of Risk Management of the Department of

19  Financial Services Insurance is authorized to insure the

20  corporation under the same general terms and conditions as the

21  Department of Corrections was insured by the division prior to

22  the corporation leasing the correctional work programs as

23  authorized by this chapter.

24         Section 1942.  Section 946.517, Florida Statutes, is

25  amended to read:

26         946.517  Corporation records.--Corporation records are

27  public records; however, proprietary confidential business

28  information shall be confidential and exempt from the

29  provisions of s. 119.07(1) and s. 24(a), Art. I of the State

30  Constitution. However, the Legislature, the Chief Financial

31  Officer Comptroller, and the Governor, pursuant to their

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 1  oversight and auditing functions, shall have access to all

 2  proprietary confidential business information upon request and

 3  without subpoena and shall retain the confidentiality of

 4  information so received. "Proprietary confidential business

 5  information" means information regardless of form or

 6  characteristics, that is owned or controlled by the

 7  corporation; is intended to be and is treated by the

 8  corporation as private and the disclosure of the information

 9  would cause harm to the corporation's business operations; has

10  not been disclosed unless disclosed pursuant to a statutory

11  provision, an order of a court or administrative body, a

12  legislative proceeding pursuant to s. 5, Art. III of the State

13  Constitution, or a private agreement that provides that the

14  information may be released to the public; and, which is

15  information regarding:

16         (1)  Internal auditing controls and reports of internal

17  auditors.

18         (2)  Matters reasonably encompassed in privileged

19  attorney-client communications.

20         (3)  Security measures, systems, or procedures.

21         (4)  Information concerning bids or other contractual

22  data, banking records, and credit agreements, the disclosure

23  of which would impair the efforts of the corporation to

24  contract for goods or services on favorable terms.

25         (5)  Information relating to private contractual data,

26  the disclosure of which would impair the competitive interest

27  of the provider of the information.

28         (6)  Corporate officer, employee personnel, or inmate

29  worker information unrelated to compensation, duties,

30  qualifications, or responsibilities.

31  

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 1         Section 1943.  Subsections (1) and (2) of section

 2  946.522, Florida Statutes, are amended to read:

 3         946.522  Prison Industries Trust Fund.--

 4         (1)  The Prison Industries Trust Fund is created, to be

 5  administered by the Department of Financial Services Banking

 6  and Finance. The trust fund shall consist of moneys authorized

 7  to be deducted pursuant to 18 U.S.C. s. 1761(c) and the

 8  applicable federal guidelines, to be appropriated by the

 9  Legislature, and moneys deposited by the corporation

10  authorized under this part to manage and operate correctional

11  work programs. The appropriated funds shall be used by the

12  corporation for purposes of construction or renovation of its

13  facilities or for the expansion or establishment of

14  correctional work programs as described in this part or for

15  prison industries enhancement (PIE) programs as authorized

16  under s. 946.523.

17         (2)  The funds must be deposited in the State Treasury

18  and may be paid out only on warrants drawn by the Chief

19  Financial Officer Comptroller upon receipt of a corporate

20  resolution that has been duly authorized by the board of

21  directors of the corporation authorized under this part to

22  manage and operate correctional work programs. The corporation

23  shall maintain all necessary records and accounts relative to

24  such funds.

25         Section 1944.  Paragraph (f) of subsection (3) of

26  section 946.525, Florida Statutes, is amended to read:

27         946.525  Participation by the corporation in the state

28  group health insurance and prescription drug programs.--

29         (3)  If the Department of Management Services

30  determines that the corporation is eligible to enroll, the

31  corporation must agree to the following terms and conditions:

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 1         (f)  If the corporation fails to make the payments

 2  required by this section to fully reimburse the state, the

 3  Department of Revenue or the Department of Financial Services

 4  Banking and Finance shall, upon the request of the Department

 5  of Management Services, deduct the amount owed by the employer

 6  from any funds to be distributed by it to the corporation. The

 7  amounts so deducted shall be transferred to the Department of

 8  Management Services for further distribution to the trust

 9  funds in accordance with this chapter.

10         Section 1945.  Subsection (1) of section 947.12,

11  Florida Statutes, is amended to read:

12         947.12  Members, employees, expenses.--

13         (1)  The members of the commission and its employees

14  shall be reimbursed for travel expenses as provided in s.

15  112.061. All bills for expenses shall be properly receipted,

16  audited, and approved and forwarded to the Chief Financial

17  Officer Comptroller and shall be paid in a manner and form as

18  the bills for the expenses of the several departments of the

19  state government are paid.  All expenses, including salaries

20  and other compensation, shall be paid from the General Revenue

21  Fund and within the appropriation as fixed therefor by the

22  Legislature.  Such expenses shall be paid by the Chief

23  Financial Officer Treasurer upon proper warrants issued by the

24  Comptroller of the state, drawn upon vouchers and requisitions

25  approved by the commission, and signed by the Comptroller.

26         Section 1946.  Subsection (8) of section 950.002,

27  Florida Statutes, is amended to read:

28         950.002  County work camps.--

29         (8)  Pursuant to the applicable provisions of chapter

30  284, the Division of Risk Management of the Department of

31  Financial Services Insurance is authorized to insure any

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 1  county work camp facility established pursuant to this act

 2  under the same general terms and conditions as the Department

 3  of Corrections is insured by the division for any of its

 4  comparable work camps.

 5         Section 1947.  Paragraph (b) of subsection (1) of

 6  section 957.04, Florida Statutes, is amended to read:

 7         957.04  Contract requirements.--

 8         (1)  A contract entered into under this chapter for the

 9  operation of private correctional facilities shall maximize

10  the cost savings of such facilities and shall:

11         (b)  Indemnify the state and the department, including

12  their officials and agents, against any and all liability,

13  including, but not limited to, civil rights liability.  Proof

14  of satisfactory insurance is required in an amount to be

15  determined by the commission, following consultation with the

16  Division of Risk Management of the Department of Financial

17  Services Insurance.  Not less than 30 days prior to the

18  release of each request for proposals by the commission, the

19  commission shall request the written recommendation of the

20  division regarding indemnification of the state and the

21  department under this paragraph.  Within 15 days after such

22  request, the division shall provide a written recommendation

23  to the commission regarding the amount and manner of such

24  indemnification.  The commission shall adopt the division's

25  recommendation unless, based on substantial competent

26  evidence, the commission determines a different amount and

27  manner of indemnification is sufficient.

28         Section 1948.  Paragraph (a) of subsection (6) and

29  subsection (8) of section 985.406, Florida Statutes, are

30  amended to read:

31  

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 1         985.406  Juvenile justice training academies

 2  established; Juvenile Justice Standards and Training

 3  Commission created; Juvenile Justice Training Trust Fund

 4  created.--

 5         (6)  SCHOLARSHIPS AND STIPENDS.--

 6         (a)  By rule, the commission shall establish criteria

 7  to award scholarships or stipends to qualified juvenile

 8  justice personnel who are residents of the state who want to

 9  pursue a bachelor's or associate in arts degree in juvenile

10  justice or a related field. The department shall handle the

11  administration of the scholarship or stipend. The Department

12  of Education shall handle the notes issued for the payment of

13  the scholarships or stipends. All scholarship and stipend

14  awards shall be paid from the Juvenile Justice Training Trust

15  Fund upon vouchers approved by the Department of Education and

16  properly certified by the Chief Financial Officer Comptroller.

17  Prior to the award of a scholarship or stipend, the juvenile

18  justice employee must agree in writing to practice her or his

19  profession in juvenile justice or a related field for 1 month

20  for each month of grant or to repay the full amount of the

21  scholarship or stipend together with interest at the rate of 5

22  percent per annum over a period not to exceed 10 years.

23  Repayment shall be made payable to the state for deposit into

24  the Juvenile Justice Training Trust Fund.

25         (8)  PARTICIPATION OF CERTAIN PROGRAMS IN THE STATE

26  RISK MANAGEMENT TRUST FUND.--Pursuant to s. 284.30, the

27  Division of Risk Management of the Department of Financial

28  Services Insurance is authorized to insure a private agency,

29  individual, or corporation operating a state-owned training

30  school under a contract to carry out the purposes and

31  responsibilities of any program of the department. The

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 1  coverage authorized herein shall be under the same general

 2  terms and conditions as the department is insured for its

 3  responsibilities under chapter 284.

 4         Section 1949.  Section 985.409, Florida Statutes, is

 5  amended to read:

 6         985.409  Participation of certain programs in the State

 7  Risk Management Trust Fund.--Pursuant to s. 284.30, the

 8  Division of Risk Management of the Department of Financial

 9  Services Insurance is authorized to insure a private agency,

10  individual, or corporation operating a state-owned training

11  school under a contract to carry out the purposes and

12  responsibilities of any program of the department. The

13  coverage authorized herein shall be under the same general

14  terms and conditions as the department is insured for its

15  responsibilities under chapter 284.

16         Section 1950.  Paragraph (g) of subsection (6) of

17  section 1000.05, Florida Statutes, is amended to read:

18         1000.05  Discrimination against students and employees

19  in the Florida K-20 public education system prohibited;

20  equality of access required.--

21         (6)  The functions of the Office of Equal Educational

22  Opportunity of the Department of Education shall include, but

23  are not limited to:

24         (g)  Reporting to the Commissioner of Education any

25  district school board, community college board of trustees, or

26  state university board of trustees found to be out of

27  compliance with rules of the State Board of Education adopted

28  as required by paragraph (f) or paragraph (3)(d).  To penalize

29  the board, the State Board of Education shall:

30         1.  Declare the educational agency ineligible for

31  competitive state grants.

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 1         2.  Notwithstanding the provisions of s. 216.192,

 2  direct the Chief Financial Officer Comptroller to withhold

 3  general revenue funds sufficient to obtain compliance from the

 4  educational agency.

 5  

 6  The educational agency shall remain ineligible and the funds

 7  shall not be paid until the agency comes into compliance or

 8  the State Board of Education approves a plan for compliance.

 9         Section 1951.  Paragraph (b) of subsection (4) of

10  section 1001.23, Florida Statutes, is amended to read:

11         1001.23  Specific powers and duties of the Department

12  of Education.--In addition to all other duties assigned to it

13  by law or by rule of the State Board of Education, the

14  department shall:

15         (4)  After complying with the provisions of s. 257.37,

16  the Department of Education may:

17         (b)  Destroy general correspondence that is over 3

18  years old; records of bills, accounts, vouchers, and

19  requisitions that are over 5 years old and copies of which

20  have been filed with the Chief Financial Officer Comptroller;

21  and other records, papers, and documents over 3 years old that

22  do not serve as part of an agreement or understanding and do

23  not have value as permanent records.

24         Section 1952.  Paragraph (b) of subsection (4) of

25  section 1002.36, Florida Statutes, is amended to read:

26         1002.36  Florida School for the Deaf and the Blind.--

27         (4)  BOARD OF TRUSTEES.--

28         (b)  The board of trustees shall elect a chair

29  annually. The trustees shall be reimbursed for travel expenses

30  as provided in s. 112.061, the accounts of which shall be paid

31  

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 1  by the Chief Financial Officer Treasurer upon itemized

 2  vouchers duly approved by the chair.

 3         Section 1953.  Paragraph (g) of subsection (6) of

 4  section 1002.38, Florida Statutes, is amended to read:

 5         1002.38  Opportunity Scholarship Program.--

 6         (6)  OPPORTUNITY SCHOLARSHIP FUNDING AND PAYMENT.--

 7         (g)  Upon proper documentation reviewed and approved by

 8  the Department of Education, the Chief Financial Officer

 9  Comptroller shall make opportunity scholarship payments in

10  four equal amounts no later than September 1, November 1,

11  February 1, and April 1 of each academic year in which the

12  opportunity scholarship is in force. The initial payment shall

13  be made after Department of Education verification of

14  admission acceptance, and subsequent payments shall be made

15  upon verification of continued enrollment and attendance at

16  the private school. Payment must be by individual warrant made

17  payable to the student's parent and mailed by the Department

18  of Education to the private school of the parent's choice, and

19  the parent shall restrictively endorse the warrant to the

20  private school.

21         Section 1954.  Paragraph (f) of subsection (6) of

22  section 1002.39, Florida Statutes, is amended to read:

23         1002.39  The John M. McKay Scholarships for Students

24  with Disabilities Program.--There is established a program

25  that is separate and distinct from the Opportunity Scholarship

26  Program and is named the John M. McKay Scholarships for

27  Students with Disabilities Program, pursuant to this section.

28         (6)  SCHOLARSHIP FUNDING AND PAYMENT.--

29         (f)  Upon proper documentation reviewed and approved by

30  the Department of Education, the Chief Financial Officer

31  Comptroller shall make scholarship payments in four equal

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 1  amounts no later than September 1, November 1, February 1, and

 2  April 15 of each academic year in which the scholarship is in

 3  force. The initial payment shall be made after Department of

 4  Education verification of admission acceptance, and subsequent

 5  payments shall be made upon verification of continued

 6  enrollment and attendance at the private school. Payment must

 7  be by individual warrant made payable to the student's parent

 8  and mailed by the Department of Education to the private

 9  school of the parent's choice, and the parent shall

10  restrictively endorse the warrant to the private school for

11  deposit into the account of the private school.

12         Section 1955.  Paragraph (b) of subsection (3) of

13  section 1003.48, Florida Statutes, is amended to read:

14         1003.48  Instruction in operation of motor vehicles.--

15         (3)

16         (b)  For the purpose of financing the Driver Education

17  Program in the secondary schools, there shall be levied an

18  additional 50 cents per year to the driver's license fee

19  required by s. 322.21.  The additional fee shall be promptly

20  remitted to the Department of Highway Safety and Motor

21  Vehicles, which shall transmit the fee to the Chief Financial

22  Officer Treasurer to be deposited in the General Revenue Fund.

23         Section 1956.  Subsection (1) of section 1004.30,

24  Florida Statutes, is amended to read:

25         1004.30  University health services support

26  organization; confidentiality of information.--

27         (1)  All meetings of a governing board of a university

28  health services support organization and all university health

29  services support organization records shall be open and

30  available to the public in accordance with s. 286.011 and s.

31  24(b), Art. I of the State Constitution and chapter 119 and s.

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 1  24(a), Art. I of the State Constitution, respectively, unless

 2  made confidential or exempt by law. Records required by the

 3  Department of Financial Services or the Office of Insurance

 4  Regulation of the Financial Services Commission Insurance to

 5  discharge their its duties shall be made available to the

 6  department upon request.

 7         Section 1957.  Subsection (1) of section 1004.725,

 8  Florida Statutes, is amended to read:

 9         1004.725  Expenditures for self-insurance services;

10  special account.--

11         (1)  The community college boards of trustees, singly

12  or collectively, are authorized to contract with an

13  administrator or service company approved by the Department of

14  Insurance pursuant to chapter 626 to provide self-insurance

15  services, including, but not limited to, the evaluation,

16  settlement, and payment of self-insurance claims on behalf of

17  the board of trustees or a consortium of boards of trustees.

18         Section 1958.  Paragraph (c) of subsection (2) of

19  section 1006.29, Florida Statutes, is amended to read:

20         1006.29  State instructional materials committees.--

21         (2)

22         (c)  The district school board shall be reimbursed for

23  the actual cost of substitute teachers for each workday that a

24  member of its instructional staff is absent from his or her

25  assigned duties for the purpose of rendering service to the

26  state instructional materials committee. In addition,

27  committee members shall be reimbursed for travel expenses and

28  per diem in accordance with s. 112.061 for actual service in

29  meetings of committees called by the commissioner. Payment of

30  such travel expenses shall be made by the Treasurer from the

31  appropriation for the administration of the instructional

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 1  materials program, on warrants to be drawn by the Chief

 2  Financial Officer Comptroller upon requisition approved by the

 3  commissioner.

 4         Section 1959.  Subsection (3) of section 1006.33,

 5  Florida Statutes, is amended to read:

 6         1006.33  Bids or proposals; advertisement and its

 7  contents.--

 8         (3)  The department shall require each publisher or

 9  manufacturer of instructional materials who submits a bid

10  under this part to deposit with the department such sum of

11  money or certified check as may be determined by the

12  department, the amount to be not less than $500 and not more

13  than $2,500, according to the number of instructional

14  materials covered by the bid, which deposit shall be forfeited

15  to the state and placed in the General Revenue Fund if the

16  bidder making the deposit fails or refuses to execute the

17  contract and bond within 30 days after receipt of the contract

18  in case his or her bid or proposal is accepted. The

19  commissioner shall, upon determining that the deposit is

20  correct and proper, transmit the deposit to the Chief

21  Financial Officer Treasurer, who shall deposit the funds for

22  credit to the Textbook Bid Trust Fund and issue his or her

23  official receipt.

24         Section 1960.  Subsections (5) and (6) of section

25  1006.34, Florida Statutes, are amended to read:

26         1006.34  Powers and duties of the commissioner and the

27  department in selecting and adopting instructional

28  materials.--

29         (5)  RETURN OF DEPOSITS.--

30         (a)  The successful bidder shall be notified by

31  registered mail of the award of contract and shall, within 30

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 1  days after receipt of the contract, execute the proper

 2  contract and post the required bond. When the bond and

 3  contract have been executed, the department shall notify the

 4  Chief Financial Officer Comptroller and request that a warrant

 5  be issued against the Textbook Bid Trust Fund payable to the

 6  successful bidder in the amount deposited pursuant to this

 7  part. The Chief Financial Officer Comptroller shall issue and

 8  forward the warrant to the department for distribution to the

 9  bidder.

10         (b)  At the same time or prior thereto, the department

11  shall inform the Chief Financial Officer Comptroller of the

12  names of the unsuccessful bidders. Upon receipt of such

13  notice, the Chief Financial Officer Comptroller shall issue

14  warrants against the Textbook Bid Trust Fund payable to the

15  unsuccessful bidders in the amounts deposited pursuant to this

16  part and shall forward the warrants to the department for

17  distribution to the unsuccessful bidders.

18         (c)  One copy of each contract and an original of each

19  bid, whether accepted or rejected, shall be preserved with the

20  department for at least 3 years after the termination of the

21  contract.

22         (6)  DEPOSITS FORFEITED.--If any successful bidder

23  fails or refuses to execute contract and bond within 30 days

24  after receipt of the contract, the cash deposit shall be

25  forfeited to the state and placed by the Chief Financial

26  Officer Treasurer in the General Revenue Fund.

27         Section 1961.  Subsection (3) of section 1006.39,

28  Florida Statutes, is amended to read:

29         1006.39  Production and dissemination of educational

30  materials and products by department.--

31  

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 1         (3)  All proceeds from the sale of educational

 2  materials and products shall be remitted to the Chief

 3  Financial Officer Treasurer and shall be kept in a separate

 4  fund to be known as the "Educational Media and Technology

 5  Trust Fund" and, when properly budgeted as approved by the

 6  Legislature and the Executive Office of the Governor, used to

 7  pay the cost of producing and disseminating educational

 8  materials and products.

 9         Section 1962.  Subsection (4) of section 1008.33,

10  Florida Statutes, is amended to read:

11         1008.33  Authority to enforce public school

12  improvement.--It is the intent of the Legislature that all

13  public schools be held accountable for students performing at

14  acceptable levels.  A system of school improvement and

15  accountability that assesses student performance by school,

16  identifies schools in which students are not making adequate

17  progress toward state standards, institutes appropriate

18  measures for enforcing improvement, and provides rewards and

19  sanctions based on performance shall be the responsibility of

20  the State Board of Education.

21         (4)  The State Board of Education may require the

22  Department of Education or Chief Financial Officer Comptroller

23  to withhold any transfer of state funds to the school district

24  if, within the timeframe specified in state board action, the

25  school district has failed to comply with the action ordered

26  to improve the district's low-performing schools. Withholding

27  the transfer of funds shall occur only after all other

28  recommended actions for school improvement have failed to

29  improve performance. The State Board of Education may impose

30  the same penalty on any district school board that fails to

31  

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 1  develop and implement a plan for assistance and intervention

 2  for low-performing schools as specified in s. 1001.42(16)(c).

 3         Section 1963.  Subsection (2) of section 1009.265,

 4  Florida Statutes, is amended to read:

 5         1009.265  State employee fee waivers.--

 6         (2)  The Chief Financial Officer Comptroller, in

 7  cooperation with the community colleges and state

 8  universities, shall identify and implement ways to ease the

 9  administrative burden to community colleges and state

10  universities, including, but not limited to, providing easier

11  access to verify state employment.

12         Section 1964.  Section 1009.54, Florida Statutes, is

13  amended to read:

14         1009.54  Critical Teacher Shortage Program.--There is

15  created the Critical Teacher Shortage Program. Funds

16  appropriated by the Legislature for the program shall be

17  deposited in the State Student Financial Assistance Trust

18  Fund. The Chief Financial Officer Comptroller shall authorize

19  expenditures from the trust fund upon receipt of vouchers

20  approved by the Department of Education for the critical

21  teacher shortage programs established in s. 1009.57, s.

22  1009.58, or s. 1009.59. The Chief Financial Officer

23  Comptroller shall also authorize expenditures from the trust

24  fund for the "Chappie" James Most Promising Teacher

25  Scholarship Loan Program and the Critical Teacher Shortage

26  Scholarship Loan Program recipients who participated in these

27  programs prior to July 1, 1993, provided that such students

28  continue to meet the renewal eligibility requirements that

29  were in effect at the time that their original awards were

30  made.  Students who participated in the "Chappie" James Most

31  Promising Teacher Scholarship Loan Program prior to July 1,

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 1  1993, shall not have their awards reduced as a result of the

 2  addition of new students to the program. All scholarship loan

 3  repayments pursuant to s. 1009.57 shall be deposited into the

 4  State Student Financial Assistance Trust Fund. Any remaining

 5  balance at the end of any fiscal year that has been allocated

 6  to the program shall remain in the trust fund and be available

 7  for the individual programs in future years.

 8         Section 1965.  Subsection (4) of section 1009.56,

 9  Florida Statutes, is amended to read:

10         1009.56  Seminole and Miccosukee Indian Scholarships.--

11         (4)  The amount of the scholarship shall be determined

12  by the Seminole Tribe of Florida or the Miccosukee Tribe of

13  Indians of Florida, for its respective applicants, within the

14  amount of funds appropriated for this purpose. The amount

15  shall be prorated accordingly for part-time students. At the

16  beginning of each semester or quarter, the department shall

17  certify the name of each scholarship holder eligible to

18  receive funds for that registration period to the Chief

19  Financial Officer Comptroller, who shall draw a warrant in

20  favor of each scholarship recipient. Each recipient shall be

21  eligible to have the scholarship renewed from year to year,

22  provided all academic and other requirements of the college or

23  university and rules established by the State Board of

24  Education are met.

25         Section 1966.  Subsection (5) of section 1009.66,

26  Florida Statutes, is amended to read:

27         1009.66  Nursing Student Loan Forgiveness Program.--

28         (5)  There is created the Nursing Student Loan

29  Forgiveness Trust Fund to be administered by the Department of

30  Health pursuant to this section and s. 1009.67 and department

31  rules. The Chief Financial Officer Comptroller shall authorize

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 1  expenditures from the trust fund upon receipt of vouchers

 2  approved by the Department of Health. All moneys collected

 3  from the private health care industry and other private

 4  sources for the purposes of this section shall be deposited

 5  into the Nursing Student Loan Forgiveness Trust Fund. Any

 6  balance in the trust fund at the end of any fiscal year shall

 7  remain therein and shall be available for carrying out the

 8  purposes of this section and s. 1009.67.

 9         Section 1967.  Effective July 1, 2003, subsection (7)

10  of section 1009.66, Florida Statutes, as amended by chapters

11  2002-400 and 2002-402, Laws of Florida, is amended to read:

12         1009.66  Nursing Student Loan Forgiveness Program.--

13         (7)(a)  Funds contained in the Nursing Student Loan

14  Forgiveness Trust Fund which are to be used for loan

15  forgiveness for those nurses employed by hospitals, birth

16  centers, and nursing homes must be matched on a

17  dollar-for-dollar basis by contributions from the employing

18  institutions, except that this provision shall not apply to

19  state-operated medical and health care facilities, public

20  schools, county health departments, federally sponsored

21  community health centers, teaching hospitals as defined in s.

22  408.07, family practice teaching hospitals as defined in s.

23  395.805, or specialty hospitals for children as used in s.

24  409.9119. An estimate of the annual trust fund dollars shall

25  be made at the beginning of the fiscal year based on historic

26  expenditures from the trust fund. Applicant requests shall be

27  reviewed on a quarterly basis, and applicant awards shall be

28  based on the following priority of employer until all such

29  estimated trust funds are awarded: state-operated medical and

30  health care facilities; public schools; county health

31  departments; federally sponsored community health centers;

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 1  teaching hospitals as defined in s. 408.07; family practice

 2  teaching hospitals as defined in s. 395.805; specialty

 3  hospitals for children as used in s. 409.9119; and other

 4  hospitals, birth centers, and nursing homes.

 5         (b)  All Nursing Student Loan Forgiveness Trust Fund

 6  moneys shall be invested pursuant to s. 17.61 s. 18.125.

 7  Interest income accruing to that portion of the trust fund not

 8  matched shall increase the total funds available for loan

 9  forgiveness and scholarships. Pledged contributions shall not

10  be eligible for matching prior to the actual collection of the

11  total private contribution for the year.

12         Section 1968.  Subsections (2) and (3) of section

13  1009.72, Florida Statutes, are amended to read:

14         1009.72  Jose Marti Scholarship Challenge Grant

15  Program.--

16         (2)  Funds appropriated by the Legislature for the

17  program shall be deposited in the State Student Financial

18  Assistance Trust Fund. The Chief Financial Officer Comptroller

19  shall authorize expenditures from the trust fund upon receipt

20  of vouchers approved by the Department of Education.  All

21  moneys collected from private sources for the purposes of this

22  section shall be deposited into the trust fund. Any balance in

23  the trust fund at the end of any fiscal year that has been

24  allocated to the program shall remain therein and shall be

25  available for carrying out the purposes of the program.

26         (3)  The Legislature shall designate funds to be

27  transferred to the trust fund for the program from the General

28  Revenue Fund.  Such funds shall be divided into challenge

29  grants to be administered by the Department of Education.  All

30  appropriated funds deposited into the trust fund for the

31  program shall be invested pursuant to the provisions of s.

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 1  17.61 s. 18.125. Interest income accruing to that portion of

 2  the funds that are allocated to the program in the trust fund

 3  and not matched shall increase the total funds available for

 4  the program.

 5         Section 1969.  Subsections (2) and (3) of section

 6  1009.73, Florida Statutes, are amended to read:

 7         1009.73  Mary McLeod Bethune Scholarship Program.--

 8         (2)  Funds appropriated by the Legislature for the

 9  program shall be deposited in the State Student Financial

10  Assistance Trust Fund. The Chief Financial Officer Comptroller

11  shall authorize expenditures from the trust fund upon receipt

12  of vouchers approved by the Department of Education. The

13  Department of Education shall receive all moneys collected

14  from private sources for the purposes of this section and

15  shall deposit such moneys into the trust fund. Notwithstanding

16  the provisions of s. 216.301 and pursuant to s. 216.351, any

17  balance in the trust fund at the end of any fiscal year that

18  has been allocated to the program shall remain in the trust

19  fund and shall be available for carrying out the purposes of

20  the program.

21         (3)  The Legislature shall appropriate moneys to the

22  trust fund for the program from the General Revenue Fund. Such

23  moneys shall be applied to scholarships to be administered by

24  the Department of Education. All moneys deposited into the

25  trust fund for the program shall be invested pursuant to the

26  provisions of s. 17.61 s. 18.125. Interest income accruing to

27  the program shall be expended to increase the total moneys

28  available for scholarships.

29         Section 1970.  Section 1009.765, Florida Statutes, is

30  amended to read:

31  

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 1         1009.765  Ethics in Business scholarships for community

 2  colleges and independent postsecondary educational

 3  institutions.--When the Department of Insurance or the Office

 4  of Insurance Regulation of the Financial Services Commission

 5  receives a $6 million settlement as specified in the Consent

 6  Order of the Treasurer and Insurance Commissioner, case number

 7  18900-96-c, that portion of the $6 million not used to satisfy

 8  the requirements of section 18 of the Consent Order must be

 9  transferred from the Insurance Commissioner's Regulatory Trust

10  Fund to the State Student Financial Assistance Trust Fund is

11  appropriated from the State Student Financial Assistance Trust

12  Fund to provide Ethics in Business scholarships to students

13  enrolled in public community colleges and independent

14  postsecondary educational institutions eligible to participate

15  in the William L. Boyd, IV, Florida Resident Access Grant

16  Program under s. 1009.89. The funds shall be allocated to

17  institutions for scholarships in the following ratio:

18  Two-thirds for community colleges and one-third for eligible

19  independent institutions. The Department of Education shall

20  administer the scholarship program for students attending

21  community colleges and independent institutions. These funds

22  must be allocated to institutions that provide an equal amount

23  of matching funds generated by private donors for the purpose

24  of providing Ethics in Business scholarships. Public funds may

25  not be used to provide the match, nor may funds collected for

26  other purposes. Notwithstanding any other provision of law,

27  the State Board of Administration shall have the authority to

28  invest the funds appropriated under this section. The

29  Department of Education may adopt rules for administration of

30  the program.

31  

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 1         Section 1971.  Subsection (8) of section 1009.77,

 2  Florida Statutes, is amended to read:

 3         1009.77  Florida Work Experience Program.--

 4         (8)  Funds appropriated by the Legislature for the

 5  Florida Work Experience Program shall be deposited in the

 6  State Student Financial Assistance Trust Fund. The Chief

 7  Financial Officer Comptroller shall authorize expenditures

 8  from the trust fund upon receipt of vouchers approved by the

 9  Department of Education. Any balance therein at the end of any

10  fiscal year that has been allocated to the program shall

11  remain therein and shall be available for carrying out the

12  purposes of the program.

13         Section 1972.  Paragraph (d) of subsection (5) of

14  section 1009.971, Florida Statutes, is amended to read:

15         1009.971  Florida Prepaid College Board.--

16         (5)  FLORIDA PREPAID COLLEGE BOARD; CONTRACTUAL

17  SERVICES.--The board shall solicit proposals and contract,

18  pursuant to s. 287.057, for:

19         (d)  Investment managers to provide investment

20  portfolios for the prepaid program or the savings program.

21  Investment managers shall be limited to authorized insurers as

22  defined in s. 624.09, banks as defined in s. 658.12,

23  associations as defined in s. 665.012, authorized Securities

24  and Exchange Commission investment advisers, and investment

25  companies as defined in the Investment Company Act of 1940.

26  All investment managers shall have their principal place of

27  business and corporate charter located and registered in the

28  United States. In addition, each investment manager shall

29  agree to meet the obligations of the board to qualified

30  beneficiaries if moneys in the fund fail to offset the

31  obligations of the board as a result of imprudent investing by

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 1  such provider. Each authorized insurer shall evidence superior

 2  performance overall on an acceptable level of surety in

 3  meeting its obligations to its policyholders and other

 4  contractual obligations. Only qualified public depositories

 5  approved by the Chief Financial Officer Insurance Commissioner

 6  and Treasurer shall be eligible for board consideration. Each

 7  investment company shall provide investment plans as specified

 8  within the request for proposals.

 9  

10  The goals of the board in procuring such services shall be to

11  provide all purchasers and benefactors with the most secure,

12  well-diversified, and beneficially administered prepaid

13  program or savings program possible, to allow all qualified

14  firms interested in providing such services equal

15  consideration, and to provide such services to the state at no

16  cost and to the purchasers and benefactors at the lowest cost

17  possible. Evaluations of proposals submitted pursuant to this

18  subsection shall include, but not be limited to, fees and

19  other costs that are charged to purchasers or benefactors that

20  affect account values, or that impact the operational costs of

21  the prepaid program or the savings program; past experience

22  and past performance in providing the required services;

23  financial history and current financial strength and capital

24  adequacy to provide the required services; and capabilities

25  and experience of the proposed personnel that will provide the

26  required services.

27         Section 1973.  Subsection (4) of section 1009.972,

28  Florida Statutes, is amended to read:

29         1009.972  Florida Prepaid College Trust Fund.--

30         (4)  Any balance contained within the trust fund, and

31  within each fund in the trust fund, at the end of a fiscal

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 1  year shall remain therein and shall be available for carrying

 2  out the purposes of each respective program and the

 3  direct-support organization established pursuant to s.

 4  1009.983. Moneys contained within the trust fund shall be

 5  exempt from the investment requirements of s. 17.57 s. 18.10.

 6  All funds deposited in the prepaid fund may be invested

 7  pursuant to s. 215.47. Any funds of a direct-support

 8  organization created pursuant to s. 1009.983 shall be exempt

 9  from the provisions of this section.

10         Section 1974.  Subsection (4) of section 1010.56,

11  Florida Statutes, is amended to read:

12         1010.56  Board of Administration to act as fiscal agent

13  in issuance and sale of motor vehicle anticipation

14  certificates.--

15         (4)  The proceeds of any sale of original bonds or

16  original certificates shall be deposited in the State Treasury

17  to the credit of the particular construction account for which

18  the original bonds or original certificates were issued and

19  shall be under the direct control and supervision of the State

20  Board of Education, and withdrawals from such construction

21  accounts shall be made only upon warrants signed by the Chief

22  Financial Officer Comptroller and drawn upon the Treasurer.

23  Such warrants shall be issued by the Chief Financial Officer

24  Comptroller only when the vouchers requesting such warrants

25  are accompanied by the certificates of the State Board of

26  Education to the effect that such withdrawals are proper

27  expenditures for the cost of the particular construction

28  account against which the requested warrants are to be drawn.

29         Section 1975.  Section 1010.74, Florida Statutes, is

30  amended to read:

31  

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 1         1010.74  Educational Certification and Services Trust

 2  Fund.--The proceeds from the collection of certification fees,

 3  fines, penalties, and costs levied pursuant to s. 1012.59

 4  shall be remitted by the Department of Education to the Chief

 5  Financial Officer Treasurer for deposit into and disbursed

 6  from the "Educational Certification and Services Trust Fund"

 7  as re-created by chapter 99-31, Laws of Florida.

 8         Section 1976.  Section 1010.75, Florida Statutes, is

 9  amended to read:

10         1010.75  Teacher Certification Examination Trust

11  Fund.--The proceeds for the certification examination fee

12  levied pursuant to s. 1012.59 shall be remitted by the

13  Department of Education to the Chief Financial Officer

14  Treasurer for deposit into and disbursed for the "Teacher

15  Certification Examination Trust Fund" as re-created by chapter

16  99-28, Laws of Florida.

17         Section 1977.  Subsection (2) of section 1011.10,

18  Florida Statutes, is amended to read:

19         1011.10  Penalty.--

20         (2)  Each member of any district school board voting to

21  incur an indebtedness against the district school funds in

22  excess of the expenditure allowed by law, or in excess of any

23  appropriation as adopted in the original official budget or

24  amendments thereto, or to approve or pay any illegal charge

25  against the funds, and any chair of a district school board or

26  district school superintendent who signs a warrant for payment

27  of any such claim or bill of indebtedness against any of the

28  funds shall be personally liable for the amount, and shall be

29  guilty of malfeasance in office and subject to removal by the

30  Governor. It shall be the duty of the Auditor General, other

31  state officials, or independent certified public accountants

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 1  charged by law with the responsibility for auditing school

 2  accounts, upon discovering any such illegal expenditure or

 3  expenditures in excess of the appropriations in the budget as

 4  officially amended, to certify such fact to the Department of

 5  Financial Services Banking and Finance, which thereupon shall

 6  verify such fact and it shall be the duty of the Department of

 7  Financial Services Banking and Finance to advise the

 8  Department of Legal Affairs thereof, and it shall be the duty

 9  of the Department of Legal Affairs to cause to be instituted

10  and prosecuted, either through its office or through any state

11  attorney, proceedings at law or in equity against such member

12  or members of a district school board or district school

13  superintendent. If either of the officers does not institute

14  proceedings within 90 days after the audit has been certified

15  to them by the Department of Financial Services Banking and

16  Finance, any taxpayer may institute suit in his or her own

17  name on behalf of the district.

18         Section 1978.  Section 1011.17, Florida Statutes, is

19  amended to read:

20         1011.17  School funds to be paid to Chief Financial

21  Officer Treasurer or into depository.--

22         (1)  Every tax collector or other person having moneys

23  which by law go to any district school fund shall at least

24  once each month pay the same over to the depository or

25  depositories designated by the district school board for such

26  purpose, and shall provide said board with confirmation of the

27  deposit. Every officer having moneys which by law go to any

28  state school fund shall pay the same to the Chief Financial

29  Officer Treasurer of the state, and the Chief Financial

30  Officer Treasurer shall see that these moneys are deposited to

31  the credit of the proper state school fund.

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 1         (2)  The district school board shall have the authority

 2  to designate that funds due it be placed for investment for

 3  its account with the State Board of Administration rather than

 4  be deposited, and said board may direct those persons having

 5  moneys due it or due any state school fund to pay out such

 6  funds to the State Board of Administration to make authorized

 7  investments for its account.

 8         Section 1979.  Paragraph (b) of subsection (6) of

 9  section 1011.18, Florida Statutes, is amended to read:

10         1011.18  School depositories; payments into and

11  withdrawals from depositories.--

12         (6)  EXEMPTION FOR SELF-INSURANCE PROGRAMS AND

13  THIRD-PARTY ADMINISTERED EMPLOYEES' FRINGE BENEFIT PROGRAMS.--

14         (b)  The district school board may contract with an

15  insurance company or professional administrator who holds a

16  valid certificate of authority issued by the Office of

17  Insurance Regulation of the Financial Services Commission

18  Department of Insurance to provide any or all services that a

19  third-party administrator is authorized by law to perform.

20  Pursuant to such contract, the district school board may

21  advance or remit money to the administrator to be deposited in

22  a designated special checking account for paying claims

23  against the district school board under its self-insurance

24  programs, and remitting premiums to the providers of insured

25  benefits on behalf of the district school board and the

26  participants in such programs, and otherwise fulfilling the

27  obligations imposed upon the administrator by law and the

28  contractual agreements between the district school board and

29  the administrator.  The special checking account shall be

30  maintained in a designated district school depository. The

31  district school board may replenish such account as often as

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 1  necessary upon the presentation by the service organization of

 2  documentation for claims or premiums due paid equal to the

 3  amount of the requested reimbursement.  Such replenishment

 4  shall be made by a warrant signed by the chair of the district

 5  school board and countersigned by the district school

 6  superintendent. Such replenishment may be made by electronic,

 7  telephonic, or other medium, and each transfer shall be

 8  confirmed in writing and signed by the district school

 9  superintendent or his or her designee.  The provisions of

10  strict accountability of all funds and an annual audit by an

11  independent certified public accountant as provided in s.

12  1001.42(10)(k) shall apply to this subsection.

13         Section 1980.  Section 1011.4105, Florida Statutes, is

14  amended to read:

15         1011.4105  Transition from state accounting system

16  (FLAIR) to university accounting system.--

17         (1)  Universities and colleges under the supervision of

18  the State Board of Education shall use the state accounting

19  system (FLAIR) for fiscal year 2002-2003. The universities

20  shall not be required to provide funds to the Department of

21  Financial Services Banking and Finance for the utilization of

22  FLAIR.

23         (2)  Beginning with the 2003-2004 fiscal year, any

24  university may transition from FLAIR to the university's

25  accounting system.

26         (3)  To accomplish the transition from FLAIR to a

27  university's accounting system, the university board of

28  trustees must submit to the State Board of Education a plan

29  developed in cooperation with the State Comptroller (Chief

30  Financial Officer). The plan must contain the actions the

31  university will take, or has taken, to implement this

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 1  transition. The plan must provide time lines for completion of

 2  actions and the target date the university will have

 3  implemented and tested parallel systems with appropriate audit

 4  and internal controls in place that will enable the university

 5  to satisfactorily and timely perform all accounting and

 6  reporting functions required by state and federal law and

 7  rules of the State Board of Education.

 8         (4)  When a university is ready to transition from

 9  FLAIR to its own system, the State Board of Education shall

10  verify that the system the university has implemented and

11  tested is adequate for the university, the university has

12  appropriate audit and internal controls in place, the

13  university has the resources required to operate and maintain

14  the system, and that the university and the State Comptroller

15  (Chief Financial Officer) are prepared to implement the

16  transition. The State Board of Education shall submit to the

17  Executive Office of the Governor and the chairs of the

18  appropriations committees of the Senate and House of

19  Representatives confirmation of this verification and the date

20  the transition will be effective. Transition for any

21  university shall not take place until after the State Board of

22  Education has submitted this confirmation.

23         (5)  The State Board of Education in cooperation with

24  each university and the Department of Financial Services

25  Banking and Finance shall develop a plan and establish the

26  deadline for all universities to have completed the transition

27  from FLAIR. The board shall submit a copy of this plan to the

28  Executive Office of the Governor and the chairs of the

29  appropriations committees of the Senate and House of

30  Representatives.

31  

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 1         Section 1981.  Subsection (2) of section 1011.57,

 2  Florida Statutes, is amended to read:

 3         1011.57  Florida School for the Deaf and the Blind;

 4  board of trustees; management flexibility.--

 5         (2)  Notwithstanding the provisions of s. 216.181 and

 6  pursuant to the provisions of s. 216.351, but subject to any

 7  requirements imposed in the General Appropriations Act, no

 8  lump-sum plan is required to implement the special categories,

 9  program categories, or lump-sum appropriations. Upon release

10  of the special categories, program categories, or lump-sum

11  appropriations to the board of trustees, the Chief Financial

12  Officer Comptroller, upon the request of the board of

13  trustees, shall transfer or reallocate funds to or among

14  accounts established for disbursement purposes. The board of

15  trustees shall maintain records to account for the original

16  appropriation.

17         Section 1982.  Subsection (1) of section 1011.94,

18  Florida Statutes, is amended to read:

19         1011.94  Trust Fund for University Major Gifts.--

20         (1)  There is established a Trust Fund for University

21  Major Gifts. The purpose of the trust fund is to enable each

22  university and New College to provide donors with an incentive

23  in the form of matching grants for donations for the

24  establishment of permanent endowments and sales tax exemption

25  matching funds received pursuant to s. 212.08(5)(j), which

26  must be invested, with the proceeds of the investment used to

27  support libraries and instruction and research programs, as

28  defined by the State Board of Education. All funds

29  appropriated for the challenge grants, new donors, major

30  gifts, sales tax exemption matching funds pursuant to s.

31  212.08(5)(j), or eminent scholars program must be deposited

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 1  into the trust fund and invested pursuant to s. 17.61 s.

 2  18.125 until the State Board of Education allocates the funds

 3  to universities to match private donations. Notwithstanding s.

 4  216.301 and pursuant to s. 216.351, any undisbursed balance

 5  remaining in the trust fund and interest income accruing to

 6  the portion of the trust fund which is not matched and

 7  distributed to universities must remain in the trust fund and

 8  be used to increase the total funds available for challenge

 9  grants. Funds deposited in the trust fund for the sales tax

10  exemption matching program authorized in s. 212.08(5)(j), and

11  interest earnings thereon, shall be maintained in a separate

12  account within the Trust Fund for University Major Gifts, and

13  may be used only to match qualified sales tax exemptions that

14  a certified business designates for use by state universities

15  and community colleges to support research and development

16  projects requested by the certified business. The State Board

17  of Education may authorize any university to encumber the

18  state matching portion of a challenge grant from funds

19  available under s. 1011.45.

20         Section 1983.  Subsection (2) of section 1012.59,

21  Florida Statutes, is amended to read:

22         1012.59  Certification fees.--

23         (2)  The proceeds from the collection of certification

24  fees, fines, penalties, and costs levied pursuant to this

25  chapter shall be remitted by the Department of Education to

26  the Chief Financial Officer Treasurer for deposit into a

27  separate fund to be known as the "Educational Certification

28  and Service Trust Fund" and disbursed for the payment of

29  expenses incurred by the Educational Practices Commission and

30  in the printing of forms and bulletins and the issuing of

31  certificates, upon vouchers approved by the department.

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 1         Section 1984.  Subsection (9) of section 1012.79,

 2  Florida Statutes, is amended to read:

 3         1012.79  Education Practices Commission;

 4  organization.--

 5         (9)  The commission shall make such expenditures as may

 6  be necessary in exercising its authority and powers and

 7  carrying out its duties and responsibilities, including

 8  expenditures for personal services, general counsel or access

 9  to counsel, and rent at the seat of government and elsewhere;

10  for books of reference, periodicals, furniture, equipment, and

11  supplies; and for printing and binding. The expenditures of

12  the commission shall be subject to the powers and duties of

13  the Department of Financial Services Banking and Finance as

14  provided in s. 17.03.

15         Section 1985.  Subsection (3) of section 1013.79,

16  Florida Statutes, is amended to read:

17         1013.79  University Facility Enhancement Challenge

18  Grant Program.--

19         (3)  There is established the Alec P. Courtelis Capital

20  Facilities Matching Trust Fund for the purpose of providing

21  matching funds from private contributions for the development

22  of high priority instructional and research-related capital

23  facilities, including common areas connecting such facilities,

24  within a university. The Legislature shall appropriate funds

25  to be transferred to the trust fund. The Public Education

26  Capital Outlay and Debt Service Trust Fund, Capital

27  Improvement Trust Fund, Division of Sponsored Research Trust

28  Fund, and Contracts and Grants Trust Fund shall not be used as

29  the source of the state match for private contributions. All

30  appropriated funds deposited into the trust fund shall be

31  invested pursuant to the provisions of s. 17.161 s. 18.125.

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    Florida Senate - 2003                                  SB 1712
    311-106B-03




 1  Interest income accruing to that portion of the trust fund

 2  shall increase the total funds available for the challenge

 3  grant program. Interest income accruing from the private

 4  donations shall be returned to the participating foundation

 5  upon completion of the project. The State Board of Education

 6  shall administer the trust fund and all related construction

 7  activities.

 8         Section 1986.  Sections 17.06, 18.03, 18.09, 18.22,

 9  20.12, 20.13, 440.135, 624.4071, 624.463, 627.0623, 627.3516,

10  627.7825, 655.019, 657.067, 657.25, 657.251, 657.252, 657.253,

11  657.254. 657.256, 657.257, 657.258, 657.259, 657.260, 657.261,

12  657.262, 657.263, 657.264, 657.265, 657.266, 657.267, 657.268,

13  and 657.269, Florida Statutes, are repealed.

14         Section 1987.  In the event of a conflict between this

15  act and any other legislation enacted during the 2003 Regular

16  Session, the provisions of this act shall prevail.

17         Section 1988.  Except as otherwise provided in this

18  act, this act takes effect upon becoming a law and operates

19  retroactively to January 7, 2003.

20  

21            *****************************************

22                          SENATE SUMMARY

23    Conforms the Florida Statutes to the consolidation of the
      functions of the Comptroller and Treasurer into the
24    constitutional office of Chief Financial Officer and to
      the statutory changes initiated by chapter 2002-404, Laws
25    of Florida. (See bill for details.)

26  

27  

28  

29  

30  

31  

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