Florida Senate - 2013                             CS for SB 1046
       By the Committee on Banking and Insurance; and Senator Brandes
       597-03465-13                                          20131046c1
    1                        A bill to be entitled                      
    2         An act relating to insurance; amending s. 316.646,
    3         F.S.; authorizing a uniform motor vehicle proof-of
    4         insurance card to be in an electronic format;
    5         providing construction with respect to the parameters
    6         of a person’s consent to access information on an
    7         electronic device presented to provide proof of
    8         insurance; providing immunity from liability to a law
    9         enforcement officer for damage to an electronic device
   10         presented to provide proof of insurance; authorizing
   11         the Department of Highway Safety and Motor Vehicles to
   12         adopt rules; amending s. 320.02, F.S.; authorizing
   13         insurers to furnish uniform proof-of-purchase cards in
   14         an electronic format for use by insureds to prove the
   15         purchase of required insurance coverage when
   16         registering a motor vehicle; amending s. 554.1021,
   17         F.S.; defining the term “authorized inspection
   18         agency”; amending s. 554.107, F.S.; requiring the
   19         chief inspector of the state boiler inspection program
   20         to issue a certificate of competency as a special
   21         inspector to certain individuals; specifying how long
   22         such certificate remains in effect; amending s.
   23         554.109, F.S.; authorizing specified insurers to
   24         contract with an authorized inspection agency for
   25         boiler inspections; requiring such insurers to
   26         annually report the identity of contracted authorized
   27         inspection agencies to the Department of Financial
   28         Services; amending s. 624.413, F.S.; revising a
   29         specified time period applicable to a certified
   30         examination that must be filed by a foreign or alien
   31         insurer applying for a certificate of authority;
   32         amending s. 626.0428, F.S.; requiring each insurance
   33         agency to be under the control of an agent licensed to
   34         transact certain lines of insurance; authorizing an
   35         agent to be in charge of more than one branch office
   36         under certain circumstances; providing requirements
   37         relating to the designation of an agent in charge;
   38         prohibiting an insurance agency from conducting
   39         insurance business at a location without a designated
   40         agent in charge; providing a definition for the term
   41         “agent in charge”; providing that the designated agent
   42         in charge is liable for certain acts of misconduct;
   43         providing grounds for the Department of Financial
   44         Services to order operations to cease at certain
   45         insurance agency locations until an agent in charge is
   46         properly designated; amending s. 626.112, F.S.;
   47         providing licensure exemptions that allow specified
   48         individuals or entities to conduct insurance business
   49         at specified locations under certain circumstances;
   50         revising licensure requirements and penalties with
   51         respect to registered insurance agencies; providing
   52         that the registration of an approved registered
   53         insurance agency automatically converts to an
   54         insurance agency license on a specified date; amending
   55         s. 626.172, F.S.; revising requirements relating to
   56         applications for insurance agency licenses; conforming
   57         provisions to changes made by the act; amending s.
   58         626.321, F.S.; providing that a limited license to
   59         offer motor vehicle rental insurance issued to a
   60         business that rents or leases motor vehicles
   61         encompasses the employees of such business; amending
   62         s. 626.382, F.S.; providing that an insurance agency
   63         license continues in force until canceled, suspended,
   64         revoked, or terminated; amending s. 626.601, F.S.;
   65         revising terminology relating to investigations
   66         conducted by the Department of Financial Services and
   67         the Office of Insurance Regulation with respect to
   68         individuals and entities involved in the insurance
   69         industry; repealing s. 626.747, F.S., relating to
   70         branch agencies, agents in charge, and the payment of
   71         additional county tax under certain circumstances;
   72         amending s. 626.8411, F.S.; conforming a cross
   73         reference; amending s. 626.8805, F.S.; revising
   74         insurance administrator application requirements;
   75         amending s. 626.8817, F.S.; authorizing an insurer’s
   76         designee to provide certain coverage information to an
   77         insurance administrator; authorizing an insurer to
   78         subcontract the audit of an insurance administrator;
   79         amending s. 626.882, F.S.; prohibiting a person from
   80         acting as an insurance administrator without a
   81         specific written agreement; amending s. 626.883, F.S.;
   82         requiring insurance administrators to furnish
   83         fiduciary account records to an insurer’s designee;
   84         providing that administrator withdrawals from a
   85         fiduciary account be made according to specific
   86         written agreements; providing that an insurer’s
   87         designee may authorize payment of claims; amending s.
   88         626.884, F.S.; revising an insurer’s right of access
   89         to certain administrator records; amending s. 626.89,
   90         F.S.; revising the deadline for filing certain
   91         financial statements; amending s. 626.931, F.S.;
   92         deleting provisions requiring a surplus lines agent to
   93         file a quarterly affidavit with the Florida Surplus
   94         Lines Service Office; amending s. 626.932, F.S.;
   95         revising the due date of surplus lines tax; amending
   96         s. 626.935, F.S.; conforming provisions to changes
   97         made by the act; amending s. 626.936, F.S.; conforming
   98         provisions to changes made by the act; amending s.
   99         627.062, F.S.; requiring the Office of Insurance
  100         Regulation to use certain models or straight averages
  101         of certain models to estimate hurricane losses when
  102         determining whether the rates in a rate filing are
  103         excessive, inadequate, or unfairly discriminatory;
  104         amending s. 627.0628, F.S.; increasing the length of
  105         time during which an insurer must adhere to certain
  106         findings made by the Commission on Hurricane Loss
  107         Projection Methodology with respect to certain
  108         methods, principles, standards, models, or output
  109         ranges used in a rate finding; providing that the
  110         requirement to adhere to such findings does not limit
  111         an insurer from using a straight average of results of
  112         certain models or output ranges under specified
  113         circumstances; amending s. 627.072, F.S.; authorizing
  114         retrospective rating plans relating to workers’
  115         compensation and employer’s liability insurance to
  116         allow negotiations between certain employers and
  117         insurers with respect to rating factors used to
  118         calculate premiums; amending s. 627.281, F.S.;
  119         conforming a cross-reference; repealing s. 627.3519,
  120         F.S., relating to an annual report from the Financial
  121         Services Commission to the Legislature of aggregate
  122         net probable maximum losses, financing options, and
  123         potential assessments of the Florida Hurricane
  124         Catastrophe Fund and Citizens Property Insurance
  125         Corporation; amending s. 627.4133, F.S.; increasing
  126         the amount of prior notice required with respect to
  127         the nonrenewal, cancellation, or termination of
  128         certain insurance policies; deleting certain
  129         provisions that require extended periods of prior
  130         notice with respect to the nonrenewal, cancellation,
  131         or termination of certain insurance policies;
  132         prohibiting the cancellation of certain policies that
  133         have been in effect for a specified amount of time
  134         except under certain circumstances; amending s.
  135         627.4137, F.S.; adding licensed company adjusters to
  136         the list of persons who may respond to a claimant’s
  137         written request for information relating to liability
  138         insurance coverage; amending s. 627.421, F.S.;
  139         authorizing the electronic delivery of certain
  140         insurance documents; amending s. 627.43141, F.S.;
  141         authorizing a notice of change in policy terms to be
  142         sent in a separate mailing to an insured under certain
  143         circumstances; requiring an insurer to provide such
  144         notice to the insured’s insurance agent; amending s.
  145         627.6484, F.S.; providing that coverage for each
  146         policyholder of the Florida Comprehensive Health
  147         Association terminates on a specified date; requiring
  148         the association to provide assistance to
  149         policyholders; requiring the association to notify
  150         policyholders of termination of coverage and provide
  151         information concerning how to obtain other coverage;
  152         requiring the association to impose a final assessment
  153         or provide a refund to member insurers, sell or
  154         dispose of physical assets, perform a final
  155         accounting, legally dissolve the association, submit a
  156         required report, and transfer all records to the
  157         Office of Insurance Regulation; repealing s.
  158         627.64872, F.S., relating to the Florida Health
  159         Insurance Plan; providing for the future repeal of ss.
  160         627.648, 627.6482, 627.6484, 627.6486, 627.6488,
  161         627.6489, 627.649, 627.6492, 627.6494, 627.6496,
  162         627.6498, and 627.6499, F.S., relating to the Florida
  163         Comprehensive Health Association Act, definitions,
  164         termination of enrollment and availability of other
  165         coverage, eligibility, the Florida Comprehensive
  166         Health Association, the Disease Management Program,
  167         the administrator of the health insurance plan,
  168         participation of insurers, insurer assessments,
  169         deferment, and assessment limitations, issuing of
  170         policies, minimum benefits coverage and exclusions,
  171         premiums, and deductibles, and reporting by insurers
  172         and third-party administrators, respectively; amending
  173         s. 627.701, F.S.; revising requirements to issue or
  174         renew personal lines residential property insurance
  175         after a certain date; increasing the deductible amount
  176         for losses from perils other than hurricane; amending
  177         s. 627.7015, F.S.; revising the rulemaking authority
  178         of the department with respect to qualifications and
  179         specified types of penalties covered under the
  180         property insurance mediation program; creating s.
  181         627.70151, F.S.; providing criteria for an insurer or
  182         policyholder to challenge the impartiality of a loss
  183         appraisal umpire for purposes of disqualifying such
  184         umpire; amending s. 627.706, F.S.; revising the
  185         definition of the term “neutral evaluator”; amending
  186         s. 627.7074, F.S.; requiring the department to adopt
  187         rules relating to the certification of neutral
  188         evaluators; amending s. 627.736, F.S.; revising the
  189         time period for applicability of certain Medicare fee
  190         schedules or payment limitations; amending s. 627.745,
  191         F.S.; revising qualifications for approval as a
  192         mediator by the department; providing grounds for the
  193         department to deny an application, or suspend or
  194         revoke approval of a mediator or certification of a
  195         neutral evaluator; authorizing the department to adopt
  196         rules; amending s. 627.841, F.S.; providing that an
  197         insurance premium finance company may impose a fee for
  198         payments returned due to insufficient funds; amending
  199         s. 627.952, F.S.; providing that certain persons who
  200         are not residents of this state must be licensed and
  201         appointed as nonresident surplus lines agents in this
  202         state in order to engage in specified activities with
  203         respect to servicing insurance contracts,
  204         certificates, or agreements for purchasing or risk
  205         retention groups; deleting a fidelity bond requirement
  206         applicable to certain nonresident agents who are
  207         licensed as surplus lines agents in another state;
  208         amending ss. 627.971 and 627.972, F.S.; including
  209         licensed mutual insurers in financial guaranty
  210         insurance corporations; amending s. 628.901, F.S.;
  211         revising the definition of terms applicable to captive
  212         insurers; amending s. 628.905, F.S.; authorizing an
  213         industrial insured captive insurance company to write
  214         workers compensation and employer liability insurance
  215         in excess of a certain amount under certain
  216         conditions; conforming provisions to changes made by
  217         the act; redesignating the Office of Insurance
  218         Regulation instead of the Insurance Commissioner as
  219         the collector of certain fees and issuer of licenses;
  220         amending s. 628.907, F.S.; conforming provisions to
  221         changes made by the act; amending s. 628.909, F.S.;
  222         providing for applicability of certain provisions of
  223         the Insurance Code to specified captive insurers;
  224         conforming provisions to changes made by the act;
  225         amending s. 628.9142, F.S.; conforming provisions to
  226         changes made by the act; amending s. 628.915, F.S.;
  227         conforming provisions to changes made by the act;
  228         amending s. 628.917, F.S.; conforming provisions to
  229         changes made by the act; amending s. 628.919, F.S.;
  230         requiring a pure captive insurance company to submit
  231         certain risk management standards to the Office of
  232         Insurance Regulation; amending s. 634.406, F.S.;
  233         revising criteria authorizing premiums of certain
  234         service warranty associations to exceed their
  235         specified net assets limitations; revising
  236         requirements relating to contractual liability
  237         policies that insure warranty associations; providing
  238         an effective date.
  240  Be It Enacted by the Legislature of the State of Florida:
  242         Section 1. Subsection (1) of section 316.646, Florida
  243  Statutes, is amended, and subsection (5) is added to that
  244  section, to read:
  245         316.646 Security required; proof of security and display
  246  thereof; dismissal of cases.—
  247         (1) A Any person required by s. 324.022 to maintain
  248  property damage liability security, required by s. 324.023 to
  249  maintain liability security for bodily injury or death, or
  250  required by s. 627.733 to maintain personal injury protection
  251  security on a motor vehicle shall have in his or her immediate
  252  possession at all times while operating such motor vehicle
  253  proper proof of maintenance of the required security. Such proof
  254  shall be a uniform proof-of-insurance card, in paper or
  255  electronic format, in a form prescribed by the department, a
  256  valid insurance policy, an insurance policy binder, a
  257  certificate of insurance, or such other proof as may be
  258  prescribed by the department. If a person presents an electronic
  259  device to a law enforcement officer for the purpose of
  260  displaying a proof-of-insurance card in an electronic format:
  261         (a) The person presenting the device is not deemed to
  262  consent to access to any information on the electronic device
  263  other than the displayed proof-of-insurance card.
  264         (b) The law enforcement officer is not liable for damage to
  265  the electronic device.
  266         (5) The department may adopt rules to implement this
  267  section.
  268         Section 2. Paragraph (a) of subsection (5) of section
  269  320.02, Florida Statutes, is amended to read:
  270         320.02 Registration required; application for registration;
  271  forms.—
  272         (5)(a) Proof that personal injury protection benefits have
  273  been purchased when required under s. 627.733, that property
  274  damage liability coverage has been purchased as required under
  275  s. 324.022, that bodily injury or death coverage has been
  276  purchased if required under s. 324.023, and that combined bodily
  277  liability insurance and property damage liability insurance have
  278  been purchased when required under s. 627.7415 shall be provided
  279  in the manner prescribed by law by the applicant at the time of
  280  application for registration of any motor vehicle that is
  281  subject to such requirements. The issuing agent shall refuse to
  282  issue registration if such proof of purchase is not provided.
  283  Insurers shall furnish uniform proof-of-purchase cards, in paper
  284  or electronic format, in a form prescribed by the department and
  285  shall include the name of the insured’s insurance company, the
  286  coverage identification number, and the make, year, and vehicle
  287  identification number of the vehicle insured. The card must
  288  shall contain a statement notifying the applicant of the penalty
  289  specified in s. 316.646(4). The card or insurance policy,
  290  insurance policy binder, or certificate of insurance or a
  291  photocopy of any of these; an affidavit containing the name of
  292  the insured’s insurance company, the insured’s policy number,
  293  and the make and year of the vehicle insured; or such other
  294  proof as may be prescribed by the department constitutes shall
  295  constitute sufficient proof of purchase. If an affidavit is
  296  provided as proof, it must shall be in substantially the
  297  following form:
  299  Under penalty of perjury, I ...(Name of insured)... do hereby
  300  certify that I have ...(Personal Injury Protection, Property
  301  Damage Liability, and, when required, Bodily Injury
  302  Liability)... Insurance currently in effect with ...(Name of
  303  insurance company)... under ...(policy number)... covering
  304  ...(make, year, and vehicle identification number of
  305  vehicle).... ...(Signature of Insured)...
  307  Such affidavit shall include the following warning:
  314  When an application is made through a licensed motor vehicle
  315  dealer as required in s. 319.23, the original or a photostatic
  316  copy of such card, insurance policy, insurance policy binder, or
  317  certificate of insurance or the original affidavit from the
  318  insured shall be forwarded by the dealer to the tax collector of
  319  the county or the Department of Highway Safety and Motor
  320  Vehicles for processing. By executing the aforesaid affidavit,
  321  no licensed motor vehicle dealer will be liable in damages for
  322  any inadequacy, insufficiency, or falsification of any statement
  323  contained therein. A card shall also indicate the existence of
  324  any bodily injury liability insurance voluntarily purchased.
  325         Section 3. Subsection (8) is added to section 554.1021,
  326  Florida Statutes, to read:
  327         554.1021 Definitions.—As used in ss. 554.1011-554.115:
  328         (8) “Authorized inspection agency” means:
  329         (a) A county, city, town, or other governmental subdivision
  330  that has adopted and administers, at a minimum, Section I of the
  331  A.S.M.E. Boiler and Pressure Vessel Code as a legal requirement
  332  and whose inspectors hold valid certificates of competency in
  333  accordance with s. 554.113; or
  334         (b) An insurance company that is licensed or registered by
  335  an appropriate authority of any state of the United States or
  336  province of Canada and whose inspectors hold valid certificates
  337  of competency in accordance with s. 554.113.
  338         Section 4. Section 554.107, Florida Statutes, is amended to
  339  read:
  340         554.107 Special inspectors.—
  341         (1) Upon application by any an authorized inspection agency
  342  company licensed to insure boilers in this state, the chief
  343  inspector shall issue a certificate of competency as a special
  344  inspector to an any inspector employed by the agency if he or
  345  she company, provided that such inspector satisfies the
  346  competency requirements for inspectors as provided in s.
  347  554.113.
  348         (2) The certificate of competency of a special inspector
  349  remains shall remain in effect only so long as the special
  350  inspector is employed by an authorized inspection agency a
  351  company licensed to insure boilers in this state. Upon
  352  termination of employment with such agency company, a special
  353  inspector shall, in writing, notify the chief inspector of such
  354  termination. Such notice shall be given within 15 days following
  355  the date of termination.
  356         Section 5. Subsection (1) of section 554.109, Florida
  357  Statutes, is amended to read:
  358         554.109 Exemptions.—
  359         (1) An Any insurance company that insures insuring a boiler
  360  located in a public assembly location in this state shall
  361  inspect or contract with an authorized inspection agency to
  362  inspect such boiler so insured, and shall annually report to the
  363  department the identity of the authorized inspection agency that
  364  performs a required boiler inspection on behalf of the company.
  365  A any county, city, town, or other governmental subdivision that
  366  which has adopted into law the Boiler and Pressure Vessel Code
  367  of the American Society of Mechanical Engineers and the National
  368  Board Inspection Code for the construction, installation,
  369  inspection, maintenance, and repair of boilers, regulating such
  370  boilers in public assembly locations, shall inspect such boilers
  371  so regulated; provided that such inspection shall be conducted
  372  by a special inspector licensed pursuant to ss. 554.1011
  373  554.115. Upon filing of a report of satisfactory inspection with
  374  the department, such boiler is exempt from inspection by the
  375  department.
  376         Section 6. Paragraph (f) of subsection (1) of section
  377  624.413, Florida Statutes, is amended to read:
  378         624.413 Application for certificate of authority.—
  379         (1) To apply for a certificate of authority, an insurer
  380  shall file its application therefor with the office, upon a form
  381  adopted by the commission and furnished by the office, showing
  382  its name; location of its home office and, if an alien insurer,
  383  its principal office in the United States; kinds of insurance to
  384  be transacted; state or country of domicile; and such additional
  385  information as the commission reasonably requires, together with
  386  the following documents:
  387         (f) If a foreign or alien insurer, a copy of the report of
  388  the most recent examination of the insurer certified by the
  389  public official having supervision of insurance in its state of
  390  domicile or of entry into the United States. The end of the most
  391  recent year covered by the examination must be within the 5-year
  392  3-year period preceding the date of application. In lieu of the
  393  certified examination report, the office may accept an audited
  394  certified public accountant’s report prepared on a basis
  395  consistent with the insurance laws of the insurer’s state of
  396  domicile, certified by the public official having supervision of
  397  insurance in its state of domicile or of entry into the United
  398  States.
  399         Section 7. Subsection (4) is added to section 626.0428,
  400  Florida Statutes, to read:
  401         626.0428 Agency personnel powers, duties, and limitations.—
  402         (4)(a) Each place of business established by an agent or
  403  agency, firm, corporation, or association must be in the active
  404  full-time charge of a licensed and appointed agent holding the
  405  required agent licenses to transact the lines of insurance being
  406  handled at the location.
  407         (b) Notwithstanding paragraph (a), the licensed agent in
  408  charge of an insurance agency may also be the agent in charge of
  409  additional branch office locations of the agency if insurance
  410  activities requiring licensure as an insurance agent do not
  411  occur at any location when the agent is not physically present
  412  and unlicensed employees at the location do not engage in
  413  insurance activities requiring licensure as an insurance agent
  414  or customer representative.
  415         (c) An insurance agency and each branch place of business
  416  of an insurance agency shall designate an agent in charge and
  417  file the name and license number of the agent in charge and the
  418  physical address of the insurance agency location with the
  419  department at the department’s designated website. The
  420  designation of the agent in charge may be changed at the option
  421  of the agency. A change of the designated agent in charge is
  422  effective upon notification to the department, which shall be
  423  provided within 30 days after such change.
  424         (d) For the purposes of this subsection, an “agent in
  425  charge” is the licensed and appointed agent who is responsible
  426  for the supervision of all individuals within an insurance
  427  agency location, regardless of whether such individuals deal
  428  with the general public in the solicitation or negotiation of
  429  insurance contracts or the collection or accounting of moneys.
  430         (e) An agent in charge of an insurance agency is
  431  accountable for wrongful acts, misconduct, or violations of
  432  provisions of this code committed by the agent or by any person
  433  under his or her supervision while acting on behalf of the
  434  agency. This section may not be construed to render the agent in
  435  charge criminally liable for an act unless he or she personally
  436  committed or knew or should have known of the act and of the
  437  facts constituting a violation of this chapter.
  438         (f)An insurance agency location may not conduct the
  439  business of insurance unless the agency designates an agent in
  440  charge at all times. If the agency fails to update the
  441  designation of the agent in charge within 90 days after the date
  442  of a change in designation, the department shall automatically
  443  revoke the agency’s license.
  444         Section 8. Subsection (7) of section 626.112, Florida
  445  Statutes, is amended to read:
  446         626.112 License and appointment required; agents, customer
  447  representatives, adjusters, insurance agencies, service
  448  representatives, managing general agents.—
  449         (7)(a) Effective October 1, 2006, No individual, firm,
  450  partnership, corporation, association, or any other entity shall
  451  act in its own name or under a trade name, directly or
  452  indirectly, as an insurance agency, unless it complies with s.
  453  626.172 with respect to possessing an insurance agency license
  454  for each place of business at which it engages in an any
  455  activity that which may be performed only by a licensed
  456  insurance agent. However, an insurance agency that is owned and
  457  operated by a single licensed agent conducting business in his
  458  or her individual name and not employing or otherwise using the
  459  services of or appointing other licensees is exempt from the
  460  agency licensing requirements of this subsection. A branch place
  461  of business that is established by a licensed agency is
  462  considered a branch agency and is not required to be licensed so
  463  long as it transacts business under the same name and federal
  464  tax identification number as the licensed agency and has
  465  designated a licensed agent in charge of the location as
  466  required by s. 626.0428 and the address and telephone number of
  467  the location have been submitted to the department for inclusion
  468  in the licensing record of the licensed agency within 30 days
  469  after insurance transactions begin at the location Each agency
  470  engaged in business in this state before January 1, 2003, which
  471  is wholly owned by insurance agents currently licensed and
  472  appointed under this chapter, each incorporated agency whose
  473  voting shares are traded on a securities exchange, each agency
  474  designated and subject to supervision and inspection as a branch
  475  office under the rules of the National Association of Securities
  476  Dealers, and each agency whose primary function is offering
  477  insurance as a service or member benefit to members of a
  478  nonprofit corporation may file an application for registration
  479  in lieu of licensure in accordance with s. 626.172(3). Each
  480  agency engaged in business before October 1, 2006, shall file an
  481  application for licensure or registration on or before October
  482  1, 2006.
  483         (b)1. If an agency is required to be licensed but fails to
  484  file an application for licensure in accordance with this
  485  section, the department shall impose on the agency an
  486  administrative penalty in an amount of up to $10,000.
  487         2. If an agency is eligible for registration but fails to
  488  file an application for registration or an application for
  489  licensure in accordance with this section, the department shall
  490  impose on the agency an administrative penalty in an amount of
  491  up to $5,000.
  492         (c)(b)Effective October 1, 2013, the department must
  493  automatically convert the registration of an approved a
  494  registered insurance agency to shall, as a condition precedent
  495  to continuing business, obtain an insurance agency license if
  496  the department finds that, with respect to any majority owner,
  497  partner, manager, director, officer, or other person who manages
  498  or controls the agency, any person has:
  499         1. Been found guilty of, or has pleaded guilty or nolo
  500  contendere to, a felony in this state or any other state
  501  relating to the business of insurance or to an insurance agency,
  502  without regard to whether a judgment of conviction has been
  503  entered by the court having jurisdiction of the cases.
  504         2. Employed any individual in a managerial capacity or in a
  505  capacity dealing with the public who is under an order of
  506  revocation or suspension issued by the department. An insurance
  507  agency may request, on forms prescribed by the department,
  508  verification of any person’s license status. If a request is
  509  mailed within 5 working days after an employee is hired, and the
  510  employee’s license is currently suspended or revoked, the agency
  511  shall not be required to obtain a license, if the unlicensed
  512  person’s employment is immediately terminated.
  513         3. Operated the agency or permitted the agency to be
  514  operated in violation of s. 626.747.
  515         4. With such frequency as to have made the operation of the
  516  agency hazardous to the insurance-buying public or other
  517  persons:
  518         a. Solicited or handled controlled business. This
  519  subparagraph shall not prohibit the licensing of any lending or
  520  financing institution or creditor, with respect to insurance
  521  only, under credit life or disability insurance policies of
  522  borrowers from the institutions, which policies are subject to
  523  part IX of chapter 627.
  524         b. Misappropriated, converted, or unlawfully withheld
  525  moneys belonging to insurers, insureds, beneficiaries, or others
  526  and received in the conduct of business under the license.
  527         c. Unlawfully rebated, attempted to unlawfully rebate, or
  528  unlawfully divided or offered to divide commissions with
  529  another.
  530         d. Misrepresented any insurance policy or annuity contract,
  531  or used deception with regard to any policy or contract, done
  532  either in person or by any form of dissemination of information
  533  or advertising.
  534         e. Violated any provision of this code or any other law
  535  applicable to the business of insurance in the course of dealing
  536  under the license.
  537         f. Violated any lawful order or rule of the department.
  538         g. Failed or refused, upon demand, to pay over to any
  539  insurer he or she represents or has represented any money coming
  540  into his or her hands belonging to the insurer.
  541         h. Violated the provision against twisting as defined in s.
  542  626.9541(1)(l).
  543         i. In the conduct of business, engaged in unfair methods of
  544  competition or in unfair or deceptive acts or practices, as
  545  prohibited under part IX of this chapter.
  546         j. Willfully overinsured any property insurance risk.
  547         k. Engaged in fraudulent or dishonest practices in the
  548  conduct of business arising out of activities related to
  549  insurance or the insurance agency.
  550         l. Demonstrated lack of fitness or trustworthiness to
  551  engage in the business of insurance arising out of activities
  552  related to insurance or the insurance agency.
  553         m. Authorized or knowingly allowed individuals to transact
  554  insurance who were not then licensed as required by this code.
  555         5. Knowingly employed any person who within the preceding 3
  556  years has had his or her relationship with an agency terminated
  557  in accordance with paragraph (d).
  558         6. Willfully circumvented the requirements or prohibitions
  559  of this code.
  560         Section 9. Subsections (2), (3), and (4) of section
  561  626.172, Florida Statutes, are amended to read:
  562         626.172 Application for insurance agency license.—
  563         (2) An application for an insurance agency license must
  564  shall be signed by the owner or owners of the agency. If the
  565  agency is incorporated, the application must shall be signed by
  566  the president and secretary of the corporation. The application
  567  for an insurance agency license must shall include:
  568         (a) The name of each majority owner, partner, officer, and
  569  director of the insurance agency.
  570         (b) The residence address of each person required to be
  571  listed in the application under paragraph (a).
  572         (c) The name of the insurance agency, and its principal
  573  business street address and a valid e-mail address of the
  574  insurance agency.
  575         (d) The physical address location of each branch agency,
  576  including its name, e-mail address, and telephone number and the
  577  date that the branch location began transacting insurance office
  578  and the name under which each agency office conducts or will
  579  conduct business.
  580         (e) The name of each agent to be in full-time charge of an
  581  agency office and specification of which office, including
  582  branch locations.
  583         (f) The fingerprints of each of the following:
  584         1. A sole proprietor;
  585         2. Each partner;
  586         3. Each owner of an unincorporated agency;
  587         4. Each owner who directs or participates in the management
  588  or control of an incorporated agency whose shares are not traded
  589  on a securities exchange;
  590         5. The president, senior vice presidents, treasurer,
  591  secretary, and directors of the agency; and
  592         6. Any other person who directs or participates in the
  593  management or control of the agency, whether through the
  594  ownership of voting securities, by contract, by ownership of
  595  agency bank accounts, or otherwise.
  597  Fingerprints must be taken by a law enforcement agency or other
  598  entity approved by the department and must be accompanied by the
  599  fingerprint processing fee specified in s. 624.501. Fingerprints
  600  must shall be processed in accordance with s. 624.34. However,
  601  fingerprints need not be filed for an any individual who is
  602  currently licensed and appointed under this chapter. This
  603  paragraph does not apply to corporations whose voting shares are
  604  traded on a securities exchange.
  605         (g) Such additional information as the department requires
  606  by rule to ascertain the trustworthiness and competence of
  607  persons required to be listed on the application and to
  608  ascertain that such persons meet the requirements of this code.
  609  However, the department may not require that credit or character
  610  reports be submitted for persons required to be listed on the
  611  application.
  612         (h) Beginning October 1, 2005, The department must shall
  613  accept the uniform application for nonresident agency licensure.
  614  The department may adopt by rule revised versions of the uniform
  615  application.
  616         (3) The department shall issue a registration as an
  617  insurance agency to any agency that files a written application
  618  with the department and qualifies for registration. The
  619  application for registration shall require the agency to provide
  620  the same information required for an agency licensed under
  621  subsection (2), the agent identification number for each owner
  622  who is a licensed agent, proof that the agency qualifies for
  623  registration as provided in s. 626.112(7), and any other
  624  additional information that the department determines is
  625  necessary in order to demonstrate that the agency qualifies for
  626  registration. The application must be signed by the owner or
  627  owners of the agency. If the agency is incorporated, the
  628  application must be signed by the president and the secretary of
  629  the corporation. An agent who owns the agency need not file
  630  fingerprints with the department if the agent obtained a license
  631  under this chapter and the license is currently valid.
  632         (a) If an application for registration is denied, the
  633  agency must file an application for licensure no later than 30
  634  days after the date of the denial of registration.
  635         (b) A registered insurance agency must file an application
  636  for licensure no later than 30 days after the date that any
  637  person who is not a licensed and appointed agent in this state
  638  acquires any ownership interest in the agency. If an agency
  639  fails to file an application for licensure in compliance with
  640  this paragraph, the department shall impose an administrative
  641  penalty in an amount of up to $5,000 on the agency.
  642         (c) Sections 626.6115 and 626.6215 do not apply to agencies
  643  registered under this subsection.
  644         (3)(4) The department must shall issue a license or
  645  registration to each agency upon approval of the application,
  646  and each agency location must shall display the license or
  647  registration prominently in a manner that makes it clearly
  648  visible to a any customer or potential customer who enters the
  649  agency.
  650         Section 10. Paragraph (d) of subsection (1) of section
  651  626.321, Florida Statutes, is amended to read:
  652         626.321 Limited licenses.—
  653         (1) The department shall issue to a qualified applicant a
  654  license as agent authorized to transact a limited class of
  655  business in any of the following categories of limited lines
  656  insurance:
  657         (d) Motor vehicle rental insurance.—
  658         1. License covering only insurance of the risks set forth
  659  in this paragraph when offered, sold, or solicited with and
  660  incidental to the rental or lease of a motor vehicle and which
  661  applies only to the motor vehicle that is the subject of the
  662  lease or rental agreement and the occupants of the motor
  663  vehicle:
  664         a. Excess motor vehicle liability insurance providing
  665  coverage in excess of the standard liability limits provided by
  666  the lessor in the lessor’s lease to a person renting or leasing
  667  a motor vehicle from the licensee’s employer for liability
  668  arising in connection with the negligent operation of the leased
  669  or rented motor vehicle.
  670         b. Insurance covering the liability of the lessee to the
  671  lessor for damage to the leased or rented motor vehicle.
  672         c. Insurance covering the loss of or damage to baggage,
  673  personal effects, or travel documents of a person renting or
  674  leasing a motor vehicle.
  675         d. Insurance covering accidental personal injury or death
  676  of the lessee and any passenger who is riding or driving with
  677  the covered lessee in the leased or rented motor vehicle.
  678         2. Insurance under a motor vehicle rental insurance license
  679  may be issued only if the lease or rental agreement is for no
  680  more than 60 days, the lessee is not provided coverage for more
  681  than 60 consecutive days per lease period, and the lessee is
  682  given written notice that his or her personal insurance policy
  683  providing coverage on an owned motor vehicle may provide
  684  coverage of such risks and that the purchase of the insurance is
  685  not required in connection with the lease or rental of a motor
  686  vehicle. If the lease is extended beyond 60 days, the coverage
  687  may be extended one time only for a period not to exceed an
  688  additional 60 days. Insurance may be provided to the lessee as
  689  an additional insured on a policy issued to the licensee’s
  690  employer.
  691         3. The license may be issued only to the full-time salaried
  692  employee of a licensed general lines agent or to a business
  693  entity that offers motor vehicles for rent or lease if insurance
  694  sales activities authorized by the license are in connection
  695  with and incidental to the rental or lease of a motor vehicle.
  696         a. A license issued to a business entity that offers motor
  697  vehicles for rent or lease encompasses each office, branch
  698  office, employee, or place of business making use of the
  699  entity’s business name in order to offer, solicit, and sell
  700  insurance pursuant to this paragraph.
  701         b. The application for licensure must list the name,
  702  address, and phone number for each office, branch office, or
  703  place of business that is to be covered by the license. The
  704  licensee shall notify the department of the name, address, and
  705  phone number of any new location that is to be covered by the
  706  license before the new office, branch office, or place of
  707  business engages in the sale of insurance pursuant to this
  708  paragraph. The licensee must notify the department within 30
  709  days after closing or terminating an office, branch office, or
  710  place of business. Upon receipt of the notice, the department
  711  shall delete the office, branch office, or place of business
  712  from the license.
  713         c. A licensed and appointed entity is directly responsible
  714  and accountable for all acts of the licensee’s employees.
  715         Section 11. Section 626.382, Florida Statutes, is amended
  716  to read:
  717         626.382 Continuation, expiration of license; insurance
  718  agencies.—An insurance agency license continues The license of
  719  any insurance agency shall be issued for a period of 3 years and
  720  shall continue in force until it is canceled, suspended,
  721  revoked, or otherwise terminated. A license may be renewed by
  722  submitting a renewal request to the department on a form adopted
  723  by department rule.
  724         Section 12. Section 626.601, Florida Statutes, is amended
  725  to read:
  726         626.601 Improper conduct; inquiry; fingerprinting.—
  727         (1) The department or office may, upon its own motion or
  728  upon a written complaint signed by an any interested person and
  729  filed with the department or office, inquire into any alleged
  730  improper conduct of a any licensed, approved, or certified
  731  insurance agency, agent, adjuster, service representative,
  732  managing general agent, customer representative, title insurance
  733  agent, title insurance agency, mediator, neutral evaluator,
  734  continuing education course provider, instructor, school
  735  official, or monitor group under this code. The department or
  736  office may thereafter initiate an investigation of any such
  737  individual or entity licensee if it has reasonable cause to
  738  believe that the individual or entity licensee has violated any
  739  provision of the insurance code. During the course of its
  740  investigation, the department or office shall contact the
  741  individual or entity licensee being investigated unless it
  742  determines that contacting such individual or entity person
  743  could jeopardize the successful completion of the investigation
  744  or cause injury to the public.
  745         (2) In the investigation by the department or office of the
  746  alleged misconduct, the individual or entity licensee shall,
  747  whenever so required by the department or office, cause the
  748  individual’s or entity’s his or her books and records to be open
  749  for inspection for the purpose of such inquiries.
  750         (3) The complaints against an individual or entity any
  751  licensee may be informally alleged and are not required to
  752  include language need not be in any such language as is
  753  necessary to charge a crime on an indictment or information.
  754         (4) The expense for any hearings or investigations
  755  conducted under this law, as well as the fees and mileage of
  756  witnesses, may be paid out of the appropriate fund.
  757         (5) If the department or office, after investigation, has
  758  reason to believe that an individual a licensee may have been
  759  found guilty of or pleaded guilty or nolo contendere to a felony
  760  or a crime related to the business of insurance in this or any
  761  other state or jurisdiction, the department or office may
  762  require the individual licensee to file with the department or
  763  office a complete set of his or her fingerprints, which must
  764  shall be accompanied by the fingerprint processing fee set forth
  765  in s. 624.501. The fingerprints shall be taken by an authorized
  766  law enforcement agency or other department-approved entity.
  767         (6) The complaint and any information obtained pursuant to
  768  the investigation by the department or office are confidential
  769  and are exempt from the provisions of s. 119.07, unless the
  770  department or office files a formal administrative complaint,
  771  emergency order, or consent order against the individual or
  772  entity licensee. Nothing in This subsection does not shall be
  773  construed to prevent the department or office from disclosing
  774  the complaint or such information as it deems necessary to
  775  conduct the investigation, to update the complainant as to the
  776  status and outcome of the complaint, or to share such
  777  information with a any law enforcement agency.
  778         Section 13. Section 626.747, Florida Statutes, is repealed.
  779         Section 14. Paragraph (b) of subsection (1) of section
  780  626.8411, Florida Statutes, is amended to read:
  781         626.8411 Application of Florida Insurance Code provisions
  782  to title insurance agents or agencies.—
  783         (1) The following provisions of part II applicable to
  784  general lines agents or agencies also apply to title insurance
  785  agents or agencies:
  786         (b) Section 626.0428(4)(a) and (b) 626.747, relating to
  787  branch agencies.
  788         Section 15. Paragraph (c) of subsection (2) and subsection
  789  (3) of section 626.8805, Florida Statutes, is amended to read:
  790         626.8805 Certificate of authority to act as administrator.—
  791         (2) The administrator shall file with the office an
  792  application for a certificate of authority upon a form to be
  793  adopted by the commission and furnished by the office, which
  794  application shall include or have attached the following
  795  information and documents:
  796         (c) The names, addresses, official positions, and
  797  professional qualifications of the individuals who are employed
  798  or retained by the administrator and who are responsible for the
  799  conduct of the affairs of the administrator, including all
  800  members of the board of directors, board of trustees, executive
  801  committee, or other governing board or committee, and the
  802  principal officers in the case of a corporation or, the partners
  803  or members in the case of a partnership or association of the
  804  administrator, and any other person who exercises control or
  805  influence over the affairs of the administrator.
  806         (3) The applicant shall make available for inspection by
  807  the office copies of all contracts relating to services provided
  808  by the administrator to with insurers or other persons utilizing
  809  the services of the administrator.
  810         Section 16. Subsections (1) and (3) of section 626.8817,
  811  Florida Statutes, are amended to read:
  812         626.8817 Responsibilities of insurance company with respect
  813  to administration of coverage insured.—
  814         (1) If an insurer uses the services of an administrator,
  815  the insurer is responsible for determining the benefits, premium
  816  rates, underwriting criteria, and claims payment procedures
  817  applicable to the coverage and for securing reinsurance, if any.
  818  The rules pertaining to these matters shall be provided, in
  819  writing, by the insurer, or its designee, to the administrator.
  820  The responsibilities of the administrator as to any of these
  821  matters shall be set forth in a the written agreement binding
  822  upon between the administrator and the insurer.
  823         (3) In cases in which an administrator administers benefits
  824  for more than 100 certificateholders on behalf of an insurer,
  825  the insurer shall, at least semiannually, conduct a review of
  826  the operations of the administrator. At least one such review
  827  must be an onsite audit of the operations of the administrator.
  828  The insurer may contract with a qualified third party to conduct
  829  such examination.
  830         Section 17. Subsections (1) and (4) of section 626.882,
  831  Florida Statutes, are amended to read:
  832         626.882 Agreement between administrator and insurer;
  833  required provisions; maintenance of records.—
  834         (1) A No person may not act as an administrator without a
  835  written agreement, as required under s. 626.8817, which
  836  specifies the rights, duties and obligations of the between such
  837  person as administrator and an insurer.
  838         (4) If a policy is issued to a trustee or trustees, a copy
  839  of the trust agreement and any amendments to that agreement
  840  shall be furnished to the insurer or its designee by the
  841  administrator and shall be retained as part of the official
  842  records of both the administrator and the insurer for the
  843  duration of the policy and for 5 years thereafter.
  844         Section 18. Subsections (3), (4), and (5) of section
  845  626.883, Florida Statutes, are amended to read:
  846         626.883 Administrator as intermediary; collections held in
  847  fiduciary capacity; establishment of account; disbursement;
  848  payments on behalf of insurer.—
  849         (3) If charges or premiums deposited in a fiduciary account
  850  have been collected on behalf of or for more than one insurer,
  851  the administrator shall keep records clearly recording the
  852  deposits in and withdrawals from such account on behalf of or
  853  for each insurer. The administrator shall, upon request of an
  854  insurer or its designee, furnish such insurer with copies of
  855  records pertaining to deposits and withdrawals on behalf of or
  856  for such insurer.
  857         (4) The administrator may not pay a any claim by
  858  withdrawals from a fiduciary account. Withdrawals from such
  859  account shall be made as provided in the written agreement
  860  required under ss. 626.8817 and 626.882 between the
  861  administrator and the insurer for any of the following:
  862         (a) Remittance to an insurer entitled to such remittance.
  863         (b) Deposit in an account maintained in the name of such
  864  insurer.
  865         (c) Transfer to and deposit in a claims-paying account,
  866  with claims to be paid as provided by such insurer.
  867         (d) Payment to a group policyholder for remittance to the
  868  insurer entitled to such remittance.
  869         (e) Payment to the administrator of the commission, fees,
  870  or charges of the administrator.
  871         (f) Remittance of return premium to the person or persons
  872  entitled to such return premium.
  873         (5) All claims paid by the administrator from funds
  874  collected on behalf of the insurer shall be paid only on drafts
  875  of, and as authorized by, such insurer or its designee.
  876         Section 19. Subsection (3) of section 626.884, Florida
  877  Statutes, is amended to read:
  878         626.884 Maintenance of records by administrator; access;
  879  confidentiality.—
  880         (3) The insurer shall retain the right of continuing access
  881  to books and records maintained by the administrator sufficient
  882  to permit the insurer to fulfill all of its contractual
  883  obligations to insured persons, subject to any restrictions in
  884  the written agreement pertaining to between the insurer and the
  885  administrator on the proprietary rights of the parties in such
  886  books and records.
  887         Section 20. Subsections (1) and (2) of section 626.89,
  888  Florida Statutes, are amended to read:
  889         626.89 Annual financial statement and filing fee; notice of
  890  change of ownership.—
  891         (1) Each authorized administrator shall file with the
  892  office a full and true statement of its financial condition,
  893  transactions, and affairs. The statement shall be filed annually
  894  on or before April March 1 or within such extension of time
  895  therefor as the office for good cause may have granted and shall
  896  be for the preceding calendar year or fiscal year, if the
  897  administrator’s accounting is on a fiscal year basis. The
  898  statement shall be in such form and contain such matters as the
  899  commission prescribes and shall be verified by at least two
  900  officers of such administrator. An administrator whose sole
  901  stockholder is an association representing health care providers
  902  which is not an affiliate of an insurer, an administrator of a
  903  pooled governmental self-insurance program, or an administrator
  904  that is a university may submit the preceding fiscal year’s
  905  statement within 2 months after its fiscal year end.
  906         (2) Each authorized administrator shall also file an
  907  audited financial statement performed by an independent
  908  certified public accountant. The audited financial statement
  909  shall be filed with the office on or before July June 1 for the
  910  preceding calendar or fiscal year ending December 31. An
  911  administrator whose sole stockholder is an association
  912  representing health care providers which is not an affiliate of
  913  an insurer, an administrator of a pooled governmental self
  914  insurance program, or an administrator that is a university may
  915  submit the preceding fiscal year’s audited financial statement
  916  within 5 months after the end of its fiscal year. An audited
  917  financial statement prepared on a consolidated basis must
  918  include a columnar consolidating or combining worksheet that
  919  must be filed with the statement and must comply with the
  920  following:
  921         (a) Amounts shown on the consolidated audited financial
  922  statement must be shown on the worksheet;
  923         (b) Amounts for each entity must be stated separately; and
  924         (c) Explanations of consolidating and eliminating entries
  925  must be included.
  926         Section 21. Section 626.931, Florida Statutes, is amended
  927  to read:
  928         626.931 Agent affidavit and Insurer reporting
  929  requirements.—
  930         (1) Each surplus lines agent shall on or before the 45th
  931  day following each calendar quarter file with the Florida
  932  Surplus Lines Service Office an affidavit, on forms as
  933  prescribed and furnished by the Florida Surplus Lines Service
  934  Office, stating that all surplus lines insurance transacted by
  935  him or her during such calendar quarter has been submitted to
  936  the Florida Surplus Lines Service Office as required.
  937         (2) The affidavit of the surplus lines agent shall include
  938  efforts made to place coverages with authorized insurers and the
  939  results thereof.
  940         (1)(3) Each foreign insurer accepting premiums shall, on or
  941  before the end of the month following each calendar quarter,
  942  file with the Florida Surplus Lines Service Office a verified
  943  report of all surplus lines insurance transacted by such insurer
  944  for insurance risks located in this state during such calendar
  945  quarter.
  946         (2)(4) Each alien insurer accepting premiums shall, on or
  947  before June 30 of each year, file with the Florida Surplus Lines
  948  Service Office a verified report of all surplus lines insurance
  949  transacted by such insurer for insurance risks located in this
  950  state during the preceding calendar year.
  951         (3)(5) The department may waive the filing requirements
  952  described in subsections (1) (3) and (2) (4).
  953         (4)(6) Each insurer’s report and supporting information
  954  shall be in a computer-readable format as determined by the
  955  Florida Surplus Lines Service Office or shall be submitted on
  956  forms prescribed by the Florida Surplus Lines Service Office and
  957  shall show for each applicable agent:
  958         (a) A listing of all policies, certificates, cover notes,
  959  or other forms of confirmation of insurance coverage or any
  960  substitutions thereof or endorsements thereto and the
  961  identifying number; and
  962         (b) Any additional information required by the department
  963  or Florida Surplus Lines Service Office.
  964         Section 22. Paragraph (a) of subsection (2) of section
  965  626.932, Florida Statutes, is amended to read:
  966         626.932 Surplus lines tax.—
  967         (2)(a) The surplus lines agent shall make payable to the
  968  department the tax related to each calendar quarter’s business
  969  as reported to the Florida Surplus Lines Service Office, and
  970  remit the tax to the Florida Surplus Lines Service Office on or
  971  before the 45th day following each calendar quarter at the same
  972  time as provided for the filing of the quarterly affidavit,
  973  under s. 626.931. The Florida Surplus Lines Service Office shall
  974  forward to the department the taxes and any interest collected
  975  pursuant to paragraph (b), within 10 days after of receipt.
  976         Section 23. Subsection (1) of section 626.935, Florida
  977  Statutes, is amended to read:
  978         626.935 Suspension, revocation, or refusal of surplus lines
  979  agent’s license.—
  980         (1) The department shall deny an application for, suspend,
  981  revoke, or refuse to renew the appointment of a surplus lines
  982  agent and all other licenses and appointments held by the
  983  licensee under this code, on any of the following grounds:
  984         (a) Removal of the licensee’s office from the licensee’s
  985  state of residence.
  986         (b) Removal of the accounts and records of his or her
  987  surplus lines business from this state or the licensee’s state
  988  of residence during the period when such accounts and records
  989  are required to be maintained under s. 626.930.
  990         (c) Closure of the licensee’s office for more than 30
  991  consecutive days.
  992         (d) Failure to make and file his or her affidavit or
  993  reports when due as required by s. 626.931.
  994         (d)(e) Failure to pay the tax or service fee on surplus
  995  lines premiums, as provided in the Surplus Lines Law.
  996         (e)(f) Suspension, revocation, or refusal to renew or
  997  continue the license or appointment as a general lines agent,
  998  service representative, or managing general agent.
  999         (f)(g) Lack of qualifications as for an original surplus
 1000  lines agent’s license.
 1001         (g)(h) Violation of this Surplus Lines Law.
 1002         (h)(i) For any other applicable cause for which the license
 1003  of a general lines agent could be suspended, revoked, or refused
 1004  under s. 626.611 or s. 626.621.
 1005         Section 24. Subsection (1) of section 626.936, Florida
 1006  Statutes, is amended to read:
 1007         626.936 Failure to file reports or pay tax or service fee;
 1008  administrative penalty.—
 1009         (1) A Any licensed surplus lines agent who neglects to file
 1010  a report or an affidavit in the form and within the time
 1011  required or provided for in the Surplus Lines Law may be fined
 1012  up to $50 per day for each day the neglect continues, beginning
 1013  the day after the report or affidavit was due until the date the
 1014  report or affidavit is received. All sums collected under this
 1015  section shall be deposited into the Insurance Regulatory Trust
 1016  Fund.
 1017         Section 25. Paragraph (b) of subsection (2) of section
 1018  627.062, Florida Statutes, is amended to read:
 1019         627.062 Rate standards.—
 1020         (2) As to all such classes of insurance:
 1021         (b) Upon receiving a rate filing, the office shall review
 1022  the filing to determine if a rate is excessive, inadequate, or
 1023  unfairly discriminatory. In making that determination, the
 1024  office shall, in accordance with generally accepted and
 1025  reasonable actuarial techniques, consider the following factors:
 1026         1. Past and prospective loss experience within and without
 1027  this state.
 1028         2. Past and prospective expenses.
 1029         3. The degree of competition among insurers for the risk
 1030  insured.
 1031         4. Investment income reasonably expected by the insurer,
 1032  consistent with the insurer’s investment practices, from
 1033  investable premiums anticipated in the filing, plus any other
 1034  expected income from currently invested assets representing the
 1035  amount expected on unearned premium reserves and loss reserves.
 1036  The commission may adopt rules using reasonable techniques of
 1037  actuarial science and economics to specify the manner in which
 1038  insurers calculate investment income attributable to classes of
 1039  insurance written in this state and the manner in which
 1040  investment income is used to calculate insurance rates. Such
 1041  manner must contemplate allowances for an underwriting profit
 1042  factor and full consideration of investment income which produce
 1043  a reasonable rate of return; however, investment income from
 1044  invested surplus may not be considered.
 1045         5. The reasonableness of the judgment reflected in the
 1046  filing.
 1047         6. Dividends, savings, or unabsorbed premium deposits
 1048  allowed or returned to Florida policyholders, members, or
 1049  subscribers.
 1050         7. The adequacy of loss reserves.
 1051         8. The cost of reinsurance. The office may not disapprove a
 1052  rate as excessive solely due to the insurer having obtained
 1053  catastrophic reinsurance to cover the insurer’s estimated 250
 1054  year probable maximum loss or any lower level of loss.
 1055         9. Trend factors, including trends in actual losses per
 1056  insured unit for the insurer making the filing.
 1057         10. Conflagration and catastrophe hazards, if applicable.
 1058         11. Projected hurricane losses, if applicable, which must
 1059  be estimated using a model or method, or a straight average of
 1060  model results or output ranges, independently found to be
 1061  acceptable or reliable by the Florida Commission on Hurricane
 1062  Loss Projection Methodology, and as further provided in s.
 1063  627.0628.
 1064         12. A reasonable margin for underwriting profit and
 1065  contingencies.
 1066         13. The cost of medical services, if applicable.
 1067         14. Other relevant factors that affect the frequency or
 1068  severity of claims or expenses.
 1069         Section 26. Paragraph (d) of subsection (3) of section
 1070  627.0628, Florida Statutes, is amended to read:
 1071         627.0628 Florida Commission on Hurricane Loss Projection
 1072  Methodology; public records exemption; public meetings
 1073  exemption.—
 1075         (d) With respect to a rate filing under s. 627.062, an
 1076  insurer shall employ and may not modify or adjust actuarial
 1077  methods, principles, standards, models, or output ranges found
 1078  by the commission to be accurate or reliable in determining
 1079  hurricane loss factors for use in a rate filing under s.
 1080  627.062. An insurer shall employ and may not modify or adjust
 1081  models found by the commission to be accurate or reliable in
 1082  determining probable maximum loss levels pursuant to paragraph
 1083  (b) with respect to a rate filing under s. 627.062 made more
 1084  than 180 60 days after the commission has made such findings.
 1085  This paragraph does not prohibit an insurer from using a
 1086  straight average of model results or output ranges or using
 1087  straight averages for the purposes of a rate filing under s.
 1088  627.062.
 1089         Section 27. Present subsections (2) through (4) of section
 1090  627.072, Florida Statutes, are renumbered as subsections (3)
 1091  through (5), respectively, and a new subsection (2) is added to
 1092  that section, to read:
 1093         627.072 Making and use of rates.—
 1094         (2) A retrospective rating plan may contain a provision
 1095  that allows negotiation between the employer and the insurer to
 1096  determine the retrospective rating factors used to calculate the
 1097  premium for employers that have exposure in more than one state
 1098  and an estimated annual countrywide standard premium of $1
 1099  million or more for workers’ compensation.
 1100         Section 28. Subsection (2) of section 627.281, Florida
 1101  Statutes, is amended to read:
 1102         627.281 Appeal from rating organization; workers’
 1103  compensation and employer’s liability insurance filings.—
 1104         (2) If such appeal is based upon the failure of the rating
 1105  organization to make a filing on behalf of such member or
 1106  subscriber which is based on a system of expense provisions
 1107  which differs, in accordance with the right granted in s.
 1108  627.072(3) 627.072(2), from the system of expense provisions
 1109  included in a filing made by the rating organization, the office
 1110  shall, if it grants the appeal, order the rating organization to
 1111  make the requested filing for use by the appellant. In deciding
 1112  such appeal, the office shall apply the applicable standards set
 1113  forth in ss. 627.062 and 627.072.
 1114         Section 29. Section 627.3519, Florida Statutes, is
 1115  repealed.
 1116         Section 30. Paragraph (b) of subsection (2) of section
 1117  627.4133, Florida Statutes, is amended to read:
 1118         627.4133 Notice of cancellation, nonrenewal, or renewal
 1119  premium.—
 1120         (2) With respect to any personal lines or commercial
 1121  residential property insurance policy, including, but not
 1122  limited to, any homeowner’s, mobile home owner’s, farmowner’s,
 1123  condominium association, condominium unit owner’s, apartment
 1124  building, or other policy covering a residential structure or
 1125  its contents:
 1126         (b) The insurer shall give the first-named insured written
 1127  notice of nonrenewal, cancellation, or termination at least 120
 1128  100 days before the effective date of the nonrenewal,
 1129  cancellation, or termination. However, the insurer shall give at
 1130  least 100 days’ written notice, or written notice by June 1,
 1131  whichever is earlier, for any nonrenewal, cancellation, or
 1132  termination that would be effective between June 1 and November
 1133  30. The notice must include the reason or reasons for the
 1134  nonrenewal, cancellation, or termination, except that:
 1135         1. The insurer shall give the first-named insured written
 1136  notice of nonrenewal, cancellation, or termination at least 120
 1137  days prior to the effective date of the nonrenewal,
 1138  cancellation, or termination for a first-named insured whose
 1139  residential structure has been insured by that insurer or an
 1140  affiliated insurer for at least a 5-year period immediately
 1141  prior to the date of the written notice.
 1142         1.2. If cancellation is for nonpayment of premium, at least
 1143  10 days’ written notice of cancellation accompanied by the
 1144  reason therefor must be given. As used in this subparagraph, the
 1145  term “nonpayment of premium” means failure of the named insured
 1146  to discharge when due her or his obligations for in connection
 1147  with the payment of premiums on a policy or an any installment
 1148  of such premium, whether the premium is payable directly to the
 1149  insurer or its agent or indirectly under a any premium finance
 1150  plan or extension of credit, or failure to maintain membership
 1151  in an organization if such membership is a condition precedent
 1152  to insurance coverage. The term also means the failure of a
 1153  financial institution to honor an insurance applicant’s check
 1154  after delivery to a licensed agent for payment of a premium,
 1155  even if the agent has previously delivered or transferred the
 1156  premium to the insurer. If a dishonored check represents the
 1157  initial premium payment, the contract and all contractual
 1158  obligations are void ab initio unless the nonpayment is cured
 1159  within the earlier of 5 days after actual notice by certified
 1160  mail is received by the applicant or 15 days after notice is
 1161  sent to the applicant by certified mail or registered mail., and
 1162  If the contract is void, any premium received by the insurer
 1163  from a third party must be refunded to that party in full.
 1164         2.3. If such cancellation or termination occurs during the
 1165  first 90 days the insurance is in force and the insurance is
 1166  canceled or terminated for reasons other than nonpayment of
 1167  premium, at least 20 days’ written notice of cancellation or
 1168  termination accompanied by the reason therefor must be given
 1169  unless there has been a material misstatement or
 1170  misrepresentation or failure to comply with the underwriting
 1171  requirements established by the insurer.
 1172         3. After the policy has been in effect for 90 days, the
 1173  policy may not be canceled by the insurer unless there has been
 1174  a material misstatement, a nonpayment of premium, a failure to
 1175  comply with underwriting requirements established by the insurer
 1176  within 90 days after the date of effectuation of coverage, a
 1177  substantial change in the risk covered by the policy, or the
 1178  cancellation is for all insureds under such policies for a given
 1179  class of insureds. This subparagraph does not apply to
 1180  individually rated risks having a policy term of less than 90
 1181  days.
 1182         4. The requirement for providing written notice by June 1
 1183  of any nonrenewal that would be effective between June 1 and
 1184  November 30 does not apply to the following situations, but the
 1185  insurer remains subject to the requirement to provide such
 1186  notice at least 100 days before the effective date of
 1187  nonrenewal:
 1188         a. A policy that is nonrenewed due to a revision in the
 1189  coverage for sinkhole losses and catastrophic ground cover
 1190  collapse pursuant to s. 627.706.
 1191         4.b. A policy that is nonrenewed by Citizens Property
 1192  Insurance Corporation, pursuant to s. 627.351(6), for a policy
 1193  that has been assumed by an authorized insurer offering
 1194  replacement coverage to the policyholder is exempt from the
 1195  notice requirements of paragraph (a) and this paragraph. In such
 1196  cases, the corporation must give the named insured written
 1197  notice of nonrenewal at least 45 days before the effective date
 1198  of the nonrenewal.
 1200  After the policy has been in effect for 90 days, the policy may
 1201  not be canceled by the insurer unless there has been a material
 1202  misstatement, a nonpayment of premium, a failure to comply with
 1203  underwriting requirements established by the insurer within 90
 1204  days after the date of effectuation of coverage, or a
 1205  substantial change in the risk covered by the policy or if the
 1206  cancellation is for all insureds under such policies for a given
 1207  class of insureds. This paragraph does not apply to individually
 1208  rated risks having a policy term of less than 90 days.
 1209         5. Notwithstanding any other provision of law, an insurer
 1210  may cancel or nonrenew a property insurance policy after at
 1211  least 45 days’ notice if the office finds that the early
 1212  cancellation of some or all of the insurer’s policies is
 1213  necessary to protect the best interests of the public or
 1214  policyholders and the office approves the insurer’s plan for
 1215  early cancellation or nonrenewal of some or all of its policies.
 1216  The office may base such finding upon the financial condition of
 1217  the insurer, lack of adequate reinsurance coverage for hurricane
 1218  risk, or other relevant factors. The office may condition its
 1219  finding on the consent of the insurer to be placed under
 1220  administrative supervision pursuant to s. 624.81 or to the
 1221  appointment of a receiver under chapter 631.
 1222         6. A policy covering both a home and motor vehicle may be
 1223  nonrenewed for any reason applicable to either the property or
 1224  motor vehicle insurance after providing 90 days’ notice.
 1225         Section 31. Subsection (1) of section 627.4137, Florida
 1226  Statutes, is amended to read:
 1227         627.4137 Disclosure of certain information required.—
 1228         (1) Each insurer that provides which does or may provide
 1229  liability insurance coverage to pay all or a portion of a any
 1230  claim that which might be made shall provide, within 30 days
 1231  after of the written request of the claimant, a statement, under
 1232  oath, of a corporate officer or the insurer’s claims manager, or
 1233  superintendent, or licensed company adjuster setting forth the
 1234  following information with regard to each known policy of
 1235  insurance, including excess or umbrella insurance:
 1236         (a) The name of the insurer.
 1237         (b) The name of each insured.
 1238         (c) The limits of the liability coverage.
 1239         (d) A statement of any policy or coverage defense that the
 1240  which such insurer reasonably believes is available to the such
 1241  insurer at the time of filing such statement.
 1242         (e) A copy of the policy.
 1244  In addition, the insured, or her or his insurance agent, upon
 1245  written request of the claimant or the claimant’s attorney,
 1246  shall disclose the name and coverage of each known insurer to
 1247  the claimant and shall forward such request for information as
 1248  required by this subsection to all affected insurers. The
 1249  insurer shall then supply the information required in this
 1250  subsection to the claimant within 30 days after of receipt of
 1251  such request.
 1252         Section 32. Subsection (1) of section 627.421, Florida
 1253  Statutes, is amended to read:
 1254         627.421 Delivery of policy.—
 1255         (1) Subject to the insurer’s requirement as to payment of
 1256  premium, every policy shall be mailed or delivered to the
 1257  insured or to the person entitled thereto not later than 60 days
 1258  after the effectuation of coverage. Notwithstanding any other
 1259  provision of law, an insurer may allow a policyholder of
 1260  personal lines insurance to affirmatively elect delivery of the
 1261  policy documents, including, but not limited to, policies,
 1262  endorsements, notices, or documents, by electronic means in lieu
 1263  of delivery by mail.
 1264         Section 33. Subsection (2) of section 627.43141, Florida
 1265  Statutes, is amended to read:
 1266         627.43141 Notice of change in policy terms.—
 1267         (2) A renewal policy may contain a change in policy terms.
 1268  If a renewal policy contains does contain such change, the
 1269  insurer must give the named insured written notice of the
 1270  change, which may either must be enclosed along with the written
 1271  notice of renewal premium required by ss. 627.4133 and 627.728
 1272  or sent in a separate notice that complies with the nonrenewal
 1273  mailing time requirement for that particular line of business.
 1274  The insurer must also provide a sample copy of the notice to the
 1275  insured’s insurance agent before or at the same time that notice
 1276  is given to the insured. Such notice shall be entitled “Notice
 1277  of Change in Policy Terms.”
 1278         Section 34. Section 627.6484, Florida Statutes, is amended
 1279  to read:
 1280         627.6484 Dissolution of association; termination of
 1281  enrollment; availability of other coverage.—
 1282         (1) The association shall accept applications for insurance
 1283  only until June 30, 1991, after which date no further
 1284  applications may be accepted. Upon receipt of an application for
 1285  insurance, the association shall issue coverage for an eligible
 1286  applicant. When appropriate, the administrator shall forward a
 1287  copy of the application to a market assistance plan created by
 1288  the office, which shall conduct a diligent search of the private
 1289  marketplace for a carrier willing to accept the application.
 1290         (2) Coverage for each policyholder of the association
 1291  terminates at midnight, June 30, 2014, or on the date that
 1292  health insurance coverage is effective with another insurer,
 1293  whichever occurs first, and such coverage may not be renewed.
 1294         (3) The association shall provide assistance to each
 1295  policyholder concerning how to obtain health insurance coverage.
 1296  Such assistance must include:
 1297         (a) The identification of insurers and health maintenance
 1298  organizations offering coverage in the individual market,
 1299  including coverage inside and outside of the Health Insurance
 1300  Exchange;
 1301         (b) A basic explanation of the levels of coverage
 1302  available; and
 1303         (c) Specific information relating to local and online
 1304  sources from which a policyholder may obtain detailed policy and
 1305  premium comparisons and directly obtain coverage.
 1306         (4) The association shall provide written notice to all
 1307  policyholders by September 1, 2013, which informs each
 1308  policyholder with respect to:
 1309         (a) The date that coverage with the association is
 1310  terminated and that such coverage may not be renewed.
 1311         (b) The opportunity for the policyholder to obtain
 1312  individual health insurance coverage on a guaranteed-issue
 1313  basis, regardless of policyholder’s health status, from a health
 1314  insurer or health maintenance organization that offers coverage
 1315  in the individual market, including the dates of open enrollment
 1316  periods for obtaining such coverage.
 1317         (c) How to access coverage through the Health Insurance
 1318  Exchange established for this state pursuant to the Patient
 1319  Protection and Affordable Care Act and the potential for
 1320  obtaining reduced premiums and cost-sharing provisions depending
 1321  on the policyholder’s family income level.
 1322         (d) Contact information for a representative of the
 1323  association who is able to provide additional information about
 1324  obtaining individual health insurance coverage both inside and
 1325  outside of the Health Insurance Exchange.
 1326         (5) After termination of coverage, the association must
 1327  continue to receive and process timely submitted claims in
 1328  accordance with the laws of this state.
 1329         (6) By March 15, 2015, the association shall determine the
 1330  final assessment to be collected from insurers for funding
 1331  claims and administrative expenses of the association or, if
 1332  surplus funds remain, shall determine the refund amount to be
 1333  provided to each insurer based on the same pro rata formula used
 1334  for determining each insurer’s assessment.
 1335         (7) By September 1, 2015, the board must:
 1336         (a) Complete performance of all program responsibilities.
 1337         (b) Sell or otherwise dispose of all physical assets of the
 1338  association.
 1339         (c) Make a final accounting of the finances of the
 1340  association.
 1341         (d) Transfer all records to the Office of Insurance
 1342  Regulation, which shall serve as custodian of such records.
 1343         (e) Execute a legal dissolution of the association and
 1344  report such action to the Chief Financial Officer, the Insurance
 1345  Commissioner, the President of the Senate, and the Speaker of
 1346  the House of Representatives.
 1347         (2) The office shall, after consultation with the health
 1348  insurers licensed in this state, adopt a market assistance plan
 1349  to assist in the placement of risks of Florida Comprehensive
 1350  Health Association applicants. All health insurers and health
 1351  maintenance organizations licensed in this state shall
 1352  participate in the plan.
 1353         (3) Guidelines for the use of such program shall be a part
 1354  of the association’s plan of operation. The guidelines shall
 1355  describe which types of applications are to be exempt from
 1356  submission to the market assistance plan. An exemption shall be
 1357  based upon a determination that due to a specific health
 1358  condition an applicant is ineligible for coverage in the
 1359  standard market. The guidelines shall also describe how the
 1360  market assistance plan is to be conducted, and how the periodic
 1361  reviews to depopulate the association are to be conducted.
 1362         (4) If a carrier is found through the market assistance
 1363  plan, the individual shall apply to that company. If the
 1364  individual’s application is accepted, association coverage shall
 1365  terminate upon the effective date of the coverage with the
 1366  private carrier. For the purpose of applying a preexisting
 1367  condition limitation or exclusion, any carrier accepting a risk
 1368  pursuant to this section shall provide coverage as if it began
 1369  on the date coverage was effectuated on behalf of the
 1370  association, and shall be indemnified by the association for
 1371  claims costs incurred as a result of utilizing such effective
 1372  date.
 1373         (5) The association shall establish a policyholder
 1374  assistance program by July 1, 1991, to assist in placing
 1375  eligible policyholders in other coverage programs, including
 1376  Medicare and Medicaid.
 1377         Section 35. Section 627.64872, Florida Statutes, is
 1378  repealed.
 1379         Section 36. Effective October 1, 2015, sections 627.648,
 1380  627.6482, 627.6484, 627.6486, 627.6488, 627.6489, 627.649,
 1381  627.6492, 627.6494, 627.6496, 627.6498, and 627.6499, Florida
 1382  Statutes, are repealed.
 1383         Section 37. Subsection (7) of section 627.701, Florida
 1384  Statutes, is amended to read:
 1385         627.701 Liability of insureds; coinsurance; deductibles.—
 1386         (7) Before Prior to issuing a personal lines residential
 1387  property insurance policy on or after January 1, 2014 April 1,
 1388  1997, or before prior to the first renewal of a residential
 1389  property insurance policy on or after January 1, 2014 April 1,
 1390  1997, the insurer must, at a minimum, offer a deductible equal
 1391  to $750 and a deductible equal to 1 percent of the policy
 1392  dwelling limits if such amount is not less than $750, $500
 1393  applicable to losses from perils other than hurricane. Beginning
 1394  July 1, 2018, and every 5 years thereafter, the office shall
 1395  calculate and publish an adjustment to the $750 deductible based
 1396  on the average percentage change in the Consumer Price Index for
 1397  All Urban Consumers, U.S. City Average, all items, compiled by
 1398  the United States Department of Labor for the immediately
 1399  preceding 5 calendar years. The adjustment to the $750
 1400  deductible shall be rounded to the nearest $50 increment and
 1401  take effect on the January 1 following the publication of the
 1402  adjustment by the office. The first initial adjusted deductible
 1403  shall take effect upon the renewal or issuance of policies on or
 1404  after January 1, 2019 The insurer must provide the policyholder
 1405  with notice of the availability of the deductible specified in
 1406  this subsection in a form approved by the office at least once
 1407  every 3 years. The failure to provide such notice constitutes a
 1408  violation of this code but does not affect the coverage provided
 1409  under the policy. An insurer may require a higher deductible
 1410  only as part of a deductible program lawfully in effect on June
 1411  1, 1996, or as part of a similar deductible program.
 1412         Section 38. Paragraph (b) of subsection (4) of section
 1413  627.7015, Florida Statutes, is amended to read:
 1414         627.7015 Alternative procedure for resolution of disputed
 1415  property insurance claims.—
 1416         (4) The department shall adopt by rule a property insurance
 1417  mediation program to be administered by the department or its
 1418  designee. The department may also adopt special rules which are
 1419  applicable in cases of an emergency within the state. The rules
 1420  shall be modeled after practices and procedures set forth in
 1421  mediation rules of procedure adopted by the Supreme Court. The
 1422  rules shall provide for:
 1423         (b) Qualifications, denial of application, suspension,
 1424  revocation, and other penalties for of mediators as provided in
 1425  s. 627.745 and in the Florida Rules of Certified and Court
 1426  Appointed Mediators, and for such other individuals as are
 1427  qualified by education, training, or experience as the
 1428  department determines to be appropriate.
 1429         Section 39. Section 627.70151, Florida Statutes, is created
 1430  to read:
 1431         627.70151 Appraisal; conflicts of interest.—An insurer that
 1432  offers residential coverage, as defined in s. 627.4025, or a
 1433  policyholder that uses an appraisal clause in the property
 1434  insurance contract to establish a process of estimating or
 1435  evaluating the amount of the loss through the use of an
 1436  impartial umpire may challenge the umpire’s impartiality and
 1437  disqualify the proposed umpire only if:
 1438         (1) A familial relationship within the third degree exists
 1439  between the umpire and any party or a representative of any
 1440  party;
 1441         (2) The umpire has previously represented any party or a
 1442  representative of any party in a professional capacity in the
 1443  same or a substantially related matter;
 1444         (3) The umpire has represented another person in a
 1445  professional capacity on the same or a substantially related
 1446  matter, which includes the claim, same property, or an adjacent
 1447  property and that other person’s interests are materially
 1448  adverse to the interests of any party; or
 1449         (4) The umpire has worked as an employer or employee of any
 1450  party within the preceding 5 years.
 1451         Section 40. Paragraph (c) of subsection (2) of section
 1452  627.706, Florida Statutes, is amended to read:
 1453         627.706 Sinkhole insurance; catastrophic ground cover
 1454  collapse; definitions.—
 1455         (2) As used in ss. 627.706-627.7074, and as used in
 1456  connection with any policy providing coverage for a catastrophic
 1457  ground cover collapse or for sinkhole losses, the term:
 1458         (c) “Neutral evaluator” means a professional engineer or a
 1459  professional geologist who has completed a course of study in
 1460  alternative dispute resolution designed or approved by the
 1461  department for use in the neutral evaluation process, and who is
 1462  determined by the department to be fair and impartial, and who
 1463  is not otherwise ineligible for certification as provided in s.
 1464  627.7074.
 1465         Section 41. Subsection (1) of section 627.7074, Florida
 1466  Statutes, is amended to read:
 1467         627.7074 Alternative procedure for resolution of disputed
 1468  sinkhole insurance claims.—
 1469         (1) The department shall:
 1470         (a) Certify and maintain a list of persons who are neutral
 1471  evaluators.
 1472         (b) Adopt rules for certifying, denying certification,
 1473  suspending certification, and revoking certification as a
 1474  neutral evaluator, in keeping with qualifications specified in
 1475  this section and ss. 627.706 and 627.745(4).
 1476         (c)(b) Prepare a consumer information pamphlet for
 1477  distribution by insurers to policyholders which clearly
 1478  describes the neutral evaluation process and includes
 1479  information necessary for the policyholder to request a neutral
 1480  evaluation.
 1481         Section 42. Paragraph (a) of subsection (5) of section
 1482  627.736, Florida Statutes, is amended to read:
 1483         627.736 Required personal injury protection benefits;
 1484  exclusions; priority; claims.—
 1486         (a) A physician, hospital, clinic, or other person or
 1487  institution lawfully rendering treatment to an injured person
 1488  for a bodily injury covered by personal injury protection
 1489  insurance may charge the insurer and injured party only a
 1490  reasonable amount pursuant to this section for the services and
 1491  supplies rendered, and the insurer providing such coverage may
 1492  pay for such charges directly to such person or institution
 1493  lawfully rendering such treatment if the insured receiving such
 1494  treatment or his or her guardian has countersigned the properly
 1495  completed invoice, bill, or claim form approved by the office
 1496  upon which such charges are to be paid for as having actually
 1497  been rendered, to the best knowledge of the insured or his or
 1498  her guardian. However, such a charge may not exceed the amount
 1499  the person or institution customarily charges for like services
 1500  or supplies. In determining whether a charge for a particular
 1501  service, treatment, or otherwise is reasonable, consideration
 1502  may be given to evidence of usual and customary charges and
 1503  payments accepted by the provider involved in the dispute,
 1504  reimbursement levels in the community and various federal and
 1505  state medical fee schedules applicable to motor vehicle and
 1506  other insurance coverages, and other information relevant to the
 1507  reasonableness of the reimbursement for the service, treatment,
 1508  or supply.
 1509         1. The insurer may limit reimbursement to 80 percent of the
 1510  following schedule of maximum charges:
 1511         a. For emergency transport and treatment by providers
 1512  licensed under chapter 401, 200 percent of Medicare.
 1513         b. For emergency services and care provided by a hospital
 1514  licensed under chapter 395, 75 percent of the hospital’s usual
 1515  and customary charges.
 1516         c. For emergency services and care as defined by s. 395.002
 1517  provided in a facility licensed under chapter 395 rendered by a
 1518  physician or dentist, and related hospital inpatient services
 1519  rendered by a physician or dentist, the usual and customary
 1520  charges in the community.
 1521         d. For hospital inpatient services, other than emergency
 1522  services and care, 200 percent of the Medicare Part A
 1523  prospective payment applicable to the specific hospital
 1524  providing the inpatient services.
 1525         e. For hospital outpatient services, other than emergency
 1526  services and care, 200 percent of the Medicare Part A Ambulatory
 1527  Payment Classification for the specific hospital providing the
 1528  outpatient services.
 1529         f. For all other medical services, supplies, and care, 200
 1530  percent of the allowable amount under:
 1531         (I) The participating physicians fee schedule of Medicare
 1532  Part B, except as provided in sub-sub-subparagraphs (II) and
 1533  (III).
 1534         (II) Medicare Part B, in the case of services, supplies,
 1535  and care provided by ambulatory surgical centers and clinical
 1536  laboratories.
 1537         (III) The Durable Medical Equipment Prosthetics/Orthotics
 1538  and Supplies fee schedule of Medicare Part B, in the case of
 1539  durable medical equipment.
 1541  However, if such services, supplies, or care is not reimbursable
 1542  under Medicare Part B, as provided in this sub-subparagraph, the
 1543  insurer may limit reimbursement to 80 percent of the maximum
 1544  reimbursable allowance under workers’ compensation, as
 1545  determined under s. 440.13 and rules adopted thereunder which
 1546  are in effect at the time such services, supplies, or care is
 1547  provided. Services, supplies, or care that is not reimbursable
 1548  under Medicare or workers’ compensation is not required to be
 1549  reimbursed by the insurer.
 1550         2. For purposes of subparagraph 1., the applicable fee
 1551  schedule or payment limitation under Medicare is the fee
 1552  schedule or payment limitation in effect on March 1 of the year
 1553  in which the services, supplies, or care is rendered and for the
 1554  area in which such services, supplies, or care is rendered, and
 1555  the applicable fee schedule or payment limitation applies from
 1556  March 1 until the last day of the following February throughout
 1557  the remainder of that year, notwithstanding any subsequent
 1558  change made to the fee schedule or payment limitation, except
 1559  that it may not be less than the allowable amount under the
 1560  applicable schedule of Medicare Part B for 2007 for medical
 1561  services, supplies, and care subject to Medicare Part B.
 1562         3. Subparagraph 1. does not allow the insurer to apply any
 1563  limitation on the number of treatments or other utilization
 1564  limits that apply under Medicare or workers’ compensation. An
 1565  insurer that applies the allowable payment limitations of
 1566  subparagraph 1. must reimburse a provider who lawfully provided
 1567  care or treatment under the scope of his or her license,
 1568  regardless of whether such provider is entitled to reimbursement
 1569  under Medicare due to restrictions or limitations on the types
 1570  or discipline of health care providers who may be reimbursed for
 1571  particular procedures or procedure codes. However, subparagraph
 1572  1. does not prohibit an insurer from using the Medicare coding
 1573  policies and payment methodologies of the federal Centers for
 1574  Medicare and Medicaid Services, including applicable modifiers,
 1575  to determine the appropriate amount of reimbursement for medical
 1576  services, supplies, or care if the coding policy or payment
 1577  methodology does not constitute a utilization limit.
 1578         4. If an insurer limits payment as authorized by
 1579  subparagraph 1., the person providing such services, supplies,
 1580  or care may not bill or attempt to collect from the insured any
 1581  amount in excess of such limits, except for amounts that are not
 1582  covered by the insured’s personal injury protection coverage due
 1583  to the coinsurance amount or maximum policy limits.
 1584         5. Effective July 1, 2012, an insurer may limit payment as
 1585  authorized by this paragraph only if the insurance policy
 1586  includes a notice at the time of issuance or renewal that the
 1587  insurer may limit payment pursuant to the schedule of charges
 1588  specified in this paragraph. A policy form approved by the
 1589  office satisfies this requirement. If a provider submits a
 1590  charge for an amount less than the amount allowed under
 1591  subparagraph 1., the insurer may pay the amount of the charge
 1592  submitted.
 1593         Section 43. Subsection (3) of section 627.745, Florida
 1594  Statutes, is amended, present subsections (4) and (5) of that
 1595  section are renumbered as subsections (5) and (6), respectively,
 1596  and a new subsection (4) is added to that section, to read:
 1597         627.745 Mediation of claims.—
 1598         (3)(a) The department shall approve mediators to conduct
 1599  mediations pursuant to this section. All mediators must file an
 1600  application under oath for approval as a mediator.
 1601         (b) To qualify for approval as a mediator, an individual a
 1602  person must meet one of the following qualifications:
 1603         1. Possess an active certification as a Florida Circuit
 1604  Court Mediator. A Florida Circuit Court Mediator in a lapsed,
 1605  suspended, or decertified status is not eligible to participate
 1606  in the mediation program a masters or doctorate degree in
 1607  psychology, counseling, business, accounting, or economics, be a
 1608  member of The Florida Bar, be licensed as a certified public
 1609  accountant, or demonstrate that the applicant for approval has
 1610  been actively engaged as a qualified mediator for at least 4
 1611  years prior to July 1, 1990.
 1612         2. Be an approved department mediator as of July 1, 2013,
 1613  and have conducted at least one mediation on behalf of the
 1614  department within 4 years immediately preceding that the date
 1615  the application for approval is filed with the department, have
 1616  completed a minimum of a 40-hour training program approved by
 1617  the department and successfully passed a final examination
 1618  included in the training program and approved by the department.
 1619  The training program shall include and address all of the
 1620  following:
 1621         a. Mediation theory.
 1622         b. Mediation process and techniques.
 1623         c. Standards of conduct for mediators.
 1624         d. Conflict management and intervention skills.
 1625         e. Insurance nomenclature.
 1626         (4) The department shall deny an application, or suspend or
 1627  revoke its approval of a mediator or its certification of a
 1628  neutral evaluator to serve in such capacity, if it finds that
 1629  any of the following grounds exist:
 1630         (a) Lack of one or more of the qualifications specified in
 1631  this section for approval or certification.
 1632         (b) Material misstatement, misrepresentation, or fraud in
 1633  obtaining or attempting to obtain the approval or certification.
 1634         (c) Demonstrated lack of fitness or trustworthiness to act
 1635  as a mediator or neutral evaluator.
 1636         (d) Fraudulent or dishonest practices in the conduct of
 1637  mediation or neutral evaluation or in the conduct of business in
 1638  the financial services industry.
 1639         (e) Violation of any provision of this code, a lawful order
 1640  or rule of the department, the Florida Rules for Certified and
 1641  Court-Appointed Mediators, or aiding, instructing, or
 1642  encouraging another party in committing such a violation.
 1644  The department may adopt rules to administer this subsection.
 1645         Section 44. Subsection (4) of section 627.841, Florida
 1646  Statutes, is amended to read:
 1647         627.841 Delinquency, collection, cancellation, and payment
 1648  check return charge charges; attorney attorney’s fees.—
 1649         (4) In the event that a payment is made to a premium
 1650  finance company by debit, credit, electronic funds transfer,
 1651  check, or draft and such payment the instrument is returned,
 1652  declined, or cannot be processed due to because of insufficient
 1653  funds to pay it, the premium finance company may, if the premium
 1654  finance agreement so provides, impose a return payment charge of
 1655  $15.
 1656         Section 45. Paragraph (b) of subsection (1) of section
 1657  627.952, Florida Statutes, is amended to read:
 1658         627.952 Risk retention and purchasing group agents.—
 1659         (1) Any person offering, soliciting, selling, purchasing,
 1660  administering, or otherwise servicing insurance contracts,
 1661  certificates, or agreements for any purchasing group or risk
 1662  retention group to a any resident of this state, either directly
 1663  or indirectly, by the use of mail, advertising, or other means
 1664  of communication, shall obtain a license and appointment to act
 1665  as a resident general lines agent, if a resident of this state,
 1666  or a nonresident general lines agent if not a resident. Any such
 1667  person shall be subject to all requirements of the Florida
 1668  Insurance Code.
 1669         (b) A Any person required to be licensed and appointed
 1670  under this subsection, in order to place business through
 1671  Florida eligible surplus lines carriers, must, if a resident of
 1672  this state, be licensed and appointed as a surplus lines agent.
 1673  If not a resident of this state, such person must be licensed
 1674  and appointed as a nonresident surplus lines agent in this her
 1675  or his state of residence and file and maintain a fidelity bond
 1676  in favor of the people of the State of Florida executed by a
 1677  surety company admitted in this state and payable to the State
 1678  of Florida; however, such nonresident is limited to the
 1679  provision of insurance for purchasing groups. The bond must be
 1680  continuous in form and in the amount of not less than $50,000,
 1681  aggregate liability. The bond must remain in force and effect
 1682  until the surety is released from liability by the department or
 1683  until the bond is canceled by the surety. The surety may cancel
 1684  the bond and be released from further liability upon 30 days’
 1685  prior written notice to the department. The cancellation does
 1686  not affect any liability incurred or accrued before the
 1687  termination of the 30-day period. Upon receipt of a notice of
 1688  cancellation, the department shall immediately notify the agent.
 1689         Section 46. Subsection (6) of section 627.971, Florida
 1690  Statutes, is amended to read:
 1691         627.971 Definitions.—As used in this part:
 1692         (6) “Financial guaranty insurance corporation” means a
 1693  stock or mutual insurer licensed to transact financial guaranty
 1694  insurance business in this state.
 1695         Section 47. Subsection (1) of section 627.972, Florida
 1696  Statutes, is amended to read:
 1697         627.972 Organization; financial requirements.—
 1698         (1) A financial guaranty insurance corporation must be
 1699  organized and licensed in the manner prescribed in this code for
 1700  stock or mutual property and casualty insurers except that:
 1701         (a) A corporation organized to transact financial guaranty
 1702  insurance may, subject to the provisions of this code, be
 1703  licensed to transact:
 1704         1. Residual value insurance, as defined by s. 624.6081;
 1705         2. Surety insurance, as defined by s. 624.606;
 1706         3. Credit insurance, as defined by s. 624.605(1)(i); and
 1707         4. Mortgage guaranty insurance as defined in s. 635.011,
 1708  provided that the provisions of chapter 635 are met.
 1709         (b)1. Before Prior to the issuance of a license, a
 1710  corporation must submit to the office for approval, a plan of
 1711  operation detailing:
 1712         a. The types and projected diversification of guaranties to
 1713  be issued;
 1714         b. The underwriting procedures to be followed;
 1715         c. The managerial oversight methods;
 1716         d. The investment policies; and
 1717         e. Any Other matters prescribed by the office;
 1718         2. An insurer which is writing only the types of insurance
 1719  allowed under this part on July 1, 1988, and otherwise meets the
 1720  requirements of this part, is exempt from the requirements of
 1721  this paragraph.
 1722         (c) An insurer transacting financial guaranty insurance is
 1723  subject to all provisions of this code that are applicable to
 1724  property and casualty insurers to the extent that those
 1725  provisions are not inconsistent with this part.
 1726         (d) The investments of an insurer transacting financial
 1727  guaranty insurance in an any entity insured by the corporation
 1728  may not exceed 2 percent of its admitted assets as of the end of
 1729  the prior calendar year.
 1730         (e) An insurer transacting financial guaranty insurance may
 1731  only assume those lines of insurance for which it is licensed to
 1732  write direct business.
 1733         Section 48. Subsections (8), (9), and (13) of section
 1734  628.901, Florida Statutes, are amended to read:
 1735         628.901 Definitions.—As used in this part, the term:
 1736         (8) “Industrial insured” means an insured that:
 1737         (a) Has gross assets in excess of $50 million;
 1738         (b) Procures insurance through the use of a full-time
 1739  employee of the insured who acts as an insurance manager or
 1740  buyer or through the services of a person licensed as a property
 1741  and casualty insurance agent, broker, or consultant in such
 1742  person’s state of domicile;
 1743         (c) Has at least 100 full-time employees; and
 1744         (d) Pays annual premiums of at least $200,000 for each line
 1745  of insurance purchased from the industrial insured captive
 1746  insurance company insurer or at least $75,000 for any line of
 1747  coverage in excess of at least $25 million in the annual
 1748  aggregate. The purchase of umbrella or general liability
 1749  coverage in excess of $25 million in the annual aggregate shall
 1750  be deemed to be the purchase of a single line of insurance.
 1751         (9) “Industrial insured captive insurance company” means a
 1752  captive insurance company that provides insurance only to the
 1753  industrial insureds that are its stockholders or members, and
 1754  affiliates thereof, or to the stockholders, and affiliates
 1755  thereof, of its parent corporation. An industrial insured
 1756  captive insurance company can also provide reinsurance to
 1757  insurers only on risks written by such insurers for the
 1758  industrial insureds that are the stockholders or members, and
 1759  affiliates thereof, of the industrial insured captive insurance
 1760  company insurer, or the stockholders, and affiliates thereof, of
 1761  the parent corporation of the industrial insured captive
 1762  insurance company insurer.
 1763         (13) “Qualifying reinsurer parent company” means a
 1764  reinsurer that which currently holds a certificate of authority,
 1765  letter of eligibility or is an accredited or trusteed under s.
 1766  624.610(3)(c) a satisfactory non-approved reinsurer in this
 1767  state possessing a consolidated GAAP net worth of at least $500
 1768  million and a consolidated debt to total capital ratio of not
 1769  greater than 0.50.
 1770         Section 49. Subsections (1), (2), (4), and (5) of section
 1771  628.905, Florida Statutes, are amended to read:
 1772         628.905 Licensing; authority.—
 1773         (1) A captive insurance company insurer, if permitted by
 1774  its charter or articles of incorporation, may apply to the
 1775  office for a license to do any and all insurance authorized
 1776  under the insurance code, other than workers’ compensation and
 1777  employer’s liability, life, health, personal motor vehicle, and
 1778  personal residential property insurance, except that:
 1779         (a) A pure captive insurance company may not insure any
 1780  risks other than those of its parent, affiliated companies,
 1781  controlled unaffiliated businesses, or a combination thereof.
 1782         (b) An industrial insured captive insurance company may not
 1783  insure any risks other than those of the industrial insureds
 1784  that comprise the industrial insured group and their affiliated
 1785  companies, or its stockholders or members, and affiliates
 1786  thereof, of the industrial insured captive, or the stockholders
 1787  or affiliates of the parent corporation of the industrial
 1788  insured captive insurance company.
 1789         (c) A special purpose captive insurance company may insure
 1790  only the risks of its parent.
 1791         (d) A captive insurance company may not accept or cede
 1792  reinsurance except as provided in this part.
 1793         (e) An industrial insured captive insurance company with
 1794  unencumbered capital and surplus of at least $20 million may be
 1795  licensed to provide workers’ compensation and employer’s
 1796  liability insurance in excess of $25 million in the annual
 1797  aggregate. An industrial insured captive insurance company must
 1798  maintain unencumbered capital and surplus of at least $20
 1799  million to continue to write excess workers’ compensation
 1800  insurance.
 1801         (2) To conduct insurance business in this state, a captive
 1802  insurance company insurer must:
 1803         (a) Obtain from the office a license authorizing it to
 1804  conduct insurance business in this state;
 1805         (b) Hold at least one board of directors’ meeting each year
 1806  in this state;
 1807         (c) Maintain its principal place of business in this state;
 1808  and
 1809         (d) Appoint a resident registered agent to accept service
 1810  of process and to otherwise act on its behalf in this state. In
 1811  the case of a captive insurance company formed as a corporation
 1812  or a nonprofit corporation, if the registered agent cannot with
 1813  reasonable diligence be found at the registered office of the
 1814  captive insurance company, the Chief Financial Officer of this
 1815  state must be an agent of the captive insurance company upon
 1816  whom any process, notice, or demand may be served.
 1817         (4) A captive insurance company or captive reinsurance
 1818  company must pay to the office a nonrefundable fee of $1,500 for
 1819  processing its application for license.
 1820         (a) A captive insurance company or captive reinsurance
 1821  company must also pay an annual renewal fee of $1,000.
 1822         (b) The office may charge a fee of $5 for a any document
 1823  requiring certification of authenticity or the signature of the
 1824  office commissioner or his or her designee.
 1825         (5) If the office commissioner is satisfied that the
 1826  documents and statements filed by the captive insurance company
 1827  comply with this chapter, the office commissioner may grant a
 1828  license authorizing the company to conduct insurance business in
 1829  this state until the next succeeding March 1, at which time the
 1830  license may be renewed.
 1831         Section 50. Subsection (1) of section 628.907, Florida
 1832  Statutes, is amended to read:
 1833         628.907 Minimum capital and net assets requirements;
 1834  restriction on payment of dividends.—
 1835         (1) A captive insurance company insurer may not be issued a
 1836  license unless it possesses and thereafter maintains unimpaired
 1837  paid-in capital of:
 1838         (a) In the case of a pure captive insurance company, at
 1839  least $100,000.
 1840         (b) In the case of an industrial insured captive insurance
 1841  company incorporated as a stock insurer, at least $200,000.
 1842         (c) In the case of a special purpose captive insurance
 1843  company, an amount determined by the office after giving due
 1844  consideration to the company’s business plan, feasibility study,
 1845  and pro forma financial statements and projections, including
 1846  the nature of the risks to be insured.
 1847         Section 51. Section 628.909, Florida Statutes, is amended
 1848  to read:
 1849         628.909 Applicability of other laws.—
 1850         (1) The Florida Insurance Code does not apply to captive
 1851  insurance companies insurers or industrial insured captive
 1852  insurance companies insurers except as provided in this part and
 1853  subsections (2) and (3).
 1854         (2) The following provisions of the Florida Insurance Code
 1855  apply to captive insurance companies insurers who are not
 1856  industrial insured captive insurance companies insurers to the
 1857  extent that such provisions are not inconsistent with this part:
 1858         (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085,
 1859  624.40851, 624.4095, 624.411, 624.425, and 624.426.
 1860         (b) Chapter 625, part II.
 1861         (c) Chapter 626, part IX.
 1862         (d) Sections 627.730-627.7405, when no-fault coverage is
 1863  provided.
 1864         (e) Chapter 628.
 1865         (3) The following provisions of the Florida Insurance Code
 1866  apply to industrial insured captive insurance companies insurers
 1867  to the extent that such provisions are not inconsistent with
 1868  this part:
 1869         (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085,
 1870  624.40851, 624.4095, 624.411, 624.425, 624.426, and 624.609(1).
 1871         (b) Chapter 625, part II, if the industrial insured captive
 1872  insurance companies insurer is incorporated in this state.
 1873         (c) Chapter 626, part IX.
 1874         (d) Sections 627.730-627.7405 when no-fault coverage is
 1875  provided.
 1876         (e) Chapter 628, except for ss. 628.341, 628.351, and
 1877  628.6018.
 1878         Section 52. Subsection (2) of section 628.9142, Florida
 1879  Statutes, is amended to read:
 1880         628.9142 Reinsurance; effect on reserves.—
 1881         (2) A captive insurance company may take credit for
 1882  reserves on risks or portions of risks ceded to authorized
 1883  insurers or reinsurers and unauthorized insurers or reinsurers
 1884  complying with s. 624.610. A captive insurance company insurer
 1885  may not take credit for reserves on risks or portions of risks
 1886  ceded to an unauthorized insurer or reinsurer if the insurer or
 1887  reinsurer is not in compliance with s. 624.610.
 1888         Section 53. Section 628.915, Florida Statutes, is amended
 1889  to read:
 1890         628.915 Exemption from compulsory association.—
 1891         (1) A No captive insurance company may not insurer shall be
 1892  permitted to join or contribute financially to a any joint
 1893  underwriting association or guaranty fund in this state, and a ;
 1894  nor shall any captive insurance company insurer, its insured, or
 1895  its parent or any affiliated company may not receive any benefit
 1896  from any such joint underwriting association or guaranty fund
 1897  for claims arising out of the operations of such captive
 1898  insurer.
 1899         (2) An No industrial insured captive insurance company may
 1900  not insurer shall be permitted to join or contribute financially
 1901  to any joint underwriting association or guaranty fund in this
 1902  state; nor shall any industrial insured captive insurance
 1903  company insurer, its industrial insured, or its parent or any
 1904  affiliated company receive any benefit from any such joint
 1905  underwriting association or guaranty fund for claims arising out
 1906  of the operations of such industrial insured captive insurance
 1907  company insurer.
 1908         Section 54. Section 628.917, Florida Statutes, is amended
 1909  to read:
 1910         628.917 Insolvency and liquidation.—In the event that a
 1911  captive insurance company insurer is insolvent as defined in
 1912  chapter 631, the office shall liquidate the captive insurance
 1913  company insurer pursuant to the provisions of part I of chapter
 1914  631.; except that The office may not shall make no attempt to
 1915  rehabilitate such insurer.
 1916         Section 55. Section 628.919, Florida Statutes, is amended
 1917  to read:
 1918         628.919 Standards to ensure risk management control by
 1919  parent company.—A pure captive insurance company shall submit to
 1920  the office for approval The Financial Services Commission shall
 1921  adopt rules establishing standards to ensure that a parent or
 1922  affiliated company is able to exercise control of the risk
 1923  management function of any controlled unaffiliated business to
 1924  be insured by the pure captive insurance company.
 1925         Section 56. Subsection (8) of section 634.406, Florida
 1926  Statutes, is renumbered as subsection (7), and present
 1927  subsections (6) and (7) of that section are amended, to read:
 1928         634.406 Financial requirements.—
 1929         (6) An association that which holds a license under this
 1930  part and which does not hold any other license under this
 1931  chapter may allow its premiums for service warranties written
 1932  under this part to exceed the ratio to net assets limitations of
 1933  this section if the association meets all of the following:
 1934         (a) Maintains net assets of at least $750,000.
 1935         (b) Utilizes a contractual liability insurance policy
 1936  approved by the office which:
 1937         1. Reimburses the service warranty association for 100
 1938  percent of its claims liability and is issued by an insurer that
 1939  maintains a policyholder surplus of at least $100 million; or
 1940         2. Complies with the requirements of subsection (3) and is
 1941  issued by an insurer that maintains a policyholder surplus of at
 1942  least $200 million.
 1943         (c) The insurer issuing the contractual liability insurance
 1944  policy:
 1945         1. Maintains a policyholder surplus of at least $100
 1946  million.
 1947         1.2. Is rated “A” or higher by A.M. Best Company or an
 1948  equivalent rating by another national rating service acceptable
 1949  to the office.
 1950         3. Is in no way affiliated with the warranty association.
 1951         2.4. In conjunction with the warranty association’s filing
 1952  of the quarterly and annual reports, provides, on a form
 1953  prescribed by the commission, a statement certifying the gross
 1954  written premiums in force reported by the warranty association
 1955  and a statement that all of the warranty association’s gross
 1956  written premium in force is covered under the contractual
 1957  liability policy, whether or not it has been reported.
 1958         (7) A contractual liability policy must insure 100 percent
 1959  of an association’s claims exposure under all of the
 1960  association’s service warranty contracts, wherever written,
 1961  unless all of the following are satisfied:
 1962         (a) The contractual liability policy contains a clause that
 1963  specifically names the service warranty contract holders as sole
 1964  beneficiaries of the contractual liability policy and claims are
 1965  paid directly to the person making a claim under the contract;
 1966         (b) The contractual liability policy meets all other
 1967  requirements of this part, including subsection (3) of this
 1968  section, which are not inconsistent with this subsection;
 1969         (c) The association has been in existence for at least 5
 1970  years or the association is a wholly owned subsidiary of a
 1971  corporation that has been in existence and has been licensed as
 1972  a service warranty association in the state for at least 5
 1973  years, and:
 1974         1. Is listed and traded on a recognized stock exchange; is
 1975  listed in NASDAQ (National Association of Security Dealers
 1976  Automated Quotation system) and publicly traded in the over-the
 1977  counter securities market; is required to file either of Form
 1978  10-K, Form 100, or Form 20-G with the United States Securities
 1979  and Exchange Commission; or has American Depository Receipts
 1980  listed on a recognized stock exchange and publicly traded or is
 1981  the wholly owned subsidiary of a corporation that is listed and
 1982  traded on a recognized stock exchange; is listed in NASDAQ
 1983  (National Association of Security Dealers Automated Quotation
 1984  system) and publicly traded in the over-the-counter securities
 1985  market; is required to file Form 10-K, Form 100, or Form 20-G
 1986  with the United States Securities and Exchange Commission; or
 1987  has American Depository Receipts listed on a recognized stock
 1988  exchange and is publicly traded;
 1989         2. Maintains outstanding debt obligations, if any, rated in
 1990  the top four rating categories by a recognized rating service;
 1991         3. Has and maintains at all times a minimum net worth of
 1992  not less than $10 million as evidenced by audited financial
 1993  statements prepared by an independent certified public
 1994  accountant in accordance with generally accepted accounting
 1995  principles and submitted to the office annually; and
 1996         4. Is authorized to do business in this state; and
 1997         (d) The insurer issuing the contractual liability policy:
 1998         1. Maintains and has maintained for the preceding 5 years,
 1999  policyholder surplus of at least $100 million and is rated “A”
 2000  or higher by A.M. Best Company or has an equivalent rating by
 2001  another rating company acceptable to the office;
 2002         2. Holds a certificate of authority to do business in this
 2003  state and is approved to write this type of coverage; and
 2004         3. Acknowledges to the office quarterly that it insures all
 2005  of the association’s claims exposure under contracts delivered
 2006  in this state.
 2008  If all the preceding conditions are satisfied, then the scope of
 2009  coverage under a contractual liability policy shall not be
 2010  required to exceed an association’s claims exposure under
 2011  service warranty contracts delivered in this state.
 2012         Section 57. Except as otherwise expressly provided in this
 2013  act, this act shall take effect upon becoming a law.