Florida Senate - 2013 CS for CS for SB 1046
By the Committees on Appropriations; and Banking and Insurance;
and Senator Brandes
576-04646-13 20131046c2
1 A bill to be entitled
2 An act relating to insurance; amending s. 215.555,
3 F.S.; postponing the date that repeals the Florida
4 Hurricane Catastrophe Fund emergency assessment
5 exemption for medical malpractice insurance premiums;
6 amending s. 316.646, F.S.; authorizing a uniform motor
7 vehicle proof-of-insurance card to be in an electronic
8 format; providing construction with respect to the
9 parameters of a person’s consent to access information
10 on an electronic device presented to provide proof of
11 insurance; providing immunity from liability to a law
12 enforcement officer for damage to an electronic device
13 presented to provide proof of insurance; authorizing
14 the Department of Highway Safety and Motor Vehicles to
15 adopt rules; amending s. 320.02, F.S.; authorizing
16 insurers to furnish uniform proof-of-purchase cards in
17 an electronic format for use by insureds to prove the
18 purchase of required insurance coverage when
19 registering a motor vehicle; amending s. 554.1021,
20 F.S.; defining the term “authorized inspection
21 agency”; amending s. 554.107, F.S.; requiring the
22 chief inspector of the state boiler inspection program
23 to issue a certificate of competency as a special
24 inspector to certain individuals; specifying how long
25 such certificate remains in effect; amending s.
26 554.109, F.S.; authorizing specified insurers to
27 contract with an authorized inspection agency for
28 boiler inspections; requiring such insurers to
29 annually report the identity of contracted authorized
30 inspection agencies to the Department of Financial
31 Services; amending s. 624.413, F.S.; revising a
32 specified time period applicable to a certified
33 examination that must be filed by a foreign or alien
34 insurer applying for a certificate of authority;
35 amending s. 626.0428, F.S.; requiring each insurance
36 agency to be under the control of an agent licensed to
37 transact certain lines of insurance; authorizing an
38 agent to be in charge of more than one branch office
39 under certain circumstances; providing requirements
40 relating to the designation of an agent in charge;
41 prohibiting an insurance agency from conducting
42 insurance business at a location without a designated
43 agent in charge; providing a definition for the term
44 “agent in charge”; providing that the designated agent
45 in charge is liable for certain acts of misconduct;
46 providing grounds for the Department of Financial
47 Services to order operations to cease at certain
48 insurance agency locations until an agent in charge is
49 properly designated; amending s. 626.112, F.S.;
50 providing licensure exemptions that allow specified
51 individuals or entities to conduct insurance business
52 at specified locations under certain circumstances;
53 revising licensure requirements and penalties with
54 respect to registered insurance agencies; providing
55 that the registration of an approved registered
56 insurance agency automatically converts to an
57 insurance agency license on a specified date; amending
58 s. 626.172, F.S.; revising requirements relating to
59 applications for insurance agency licenses; conforming
60 provisions to changes made by the act; amending s.
61 626.321, F.S.; providing that a limited license to
62 offer motor vehicle rental insurance issued to a
63 business that rents or leases motor vehicles
64 encompasses the employees of such business; amending
65 s. 626.382, F.S.; providing that an insurance agency
66 license continues in force until canceled, suspended,
67 revoked, or terminated; amending s. 626.601, F.S.;
68 revising terminology relating to investigations
69 conducted by the Department of Financial Services and
70 the Office of Insurance Regulation with respect to
71 individuals and entities involved in the insurance
72 industry; repealing s. 626.747, F.S., relating to
73 branch agencies, agents in charge, and the payment of
74 additional county tax under certain circumstances;
75 amending s. 626.8411, F.S.; conforming a cross
76 reference; amending s. 626.8805, F.S.; revising
77 insurance administrator application requirements;
78 amending s. 626.8817, F.S.; authorizing an insurer’s
79 designee to provide certain coverage information to an
80 insurance administrator; authorizing an insurer to
81 subcontract the audit of an insurance administrator;
82 amending s. 626.882, F.S.; prohibiting a person from
83 acting as an insurance administrator without a
84 specific written agreement; amending s. 626.883, F.S.;
85 requiring insurance administrators to furnish
86 fiduciary account records to an insurer’s designee;
87 providing that administrator withdrawals from a
88 fiduciary account be made according to specific
89 written agreements; providing that an insurer’s
90 designee may authorize payment of claims; amending s.
91 626.884, F.S.; revising an insurer’s right of access
92 to certain administrator records; amending s. 626.89,
93 F.S.; revising the deadline for filing certain
94 financial statements; amending s. 626.931, F.S.;
95 deleting provisions requiring a surplus lines agent to
96 file a quarterly affidavit with the Florida Surplus
97 Lines Service Office; amending s. 626.932, F.S.;
98 revising the due date of surplus lines tax; amending
99 s. 626.935, F.S.; conforming provisions to changes
100 made by the act; amending s. 626.936, F.S.; conforming
101 provisions to changes made by the act; amending s.
102 627.062, F.S.; requiring the Office of Insurance
103 Regulation to use certain models or straight averages
104 of certain models to estimate hurricane losses when
105 determining whether the rates in a rate filing are
106 excessive, inadequate, or unfairly discriminatory;
107 amending s. 627.0628, F.S.; increasing the length of
108 time during which an insurer must adhere to certain
109 findings made by the Commission on Hurricane Loss
110 Projection Methodology with respect to certain
111 methods, principles, standards, models, or output
112 ranges used in a rate finding; providing that the
113 requirement to adhere to such findings does not limit
114 an insurer from using a straight average of results of
115 certain models or output ranges under specified
116 circumstances; amending s. 627.072, F.S.; authorizing
117 retrospective rating plans relating to workers’
118 compensation and employer’s liability insurance to
119 allow negotiations between certain employers and
120 insurers with respect to rating factors used to
121 calculate premiums; amending s. 627.281, F.S.;
122 conforming a cross-reference; amending s. 627.351,
123 F.S.; requiring Citizens Property Insurance
124 Corporation to submit a biannual report on the number
125 of residential sinkhole policies issued and declined;
126 providing legislative intent; establishing a Citizens
127 Sinkhole Stabilization Repair Program for sinkhole
128 claims; providing definitions; providing program
129 components; specifying the corporation’s liability
130 with respect to sinkhole claims; requiring the
131 corporation to offer specified deductible amounts for
132 sinkhole loss coverage; amending s. 627.3519, F.S.;
133 requiring the Florida Hurricane Catastrophe Fund and
134 Citizens Property Insurance Corporation to provide an
135 annual report to the Legislature and the Financial
136 Services Commission of their respective aggregate net
137 probable maximum losses, financing options, and
138 potential assessments; amending s. 627.4133, F.S.;
139 increasing the amount of prior notice required with
140 respect to the nonrenewal, cancellation, or
141 termination of certain insurance policies; deleting
142 certain provisions that require extended periods of
143 prior notice with respect to the nonrenewal,
144 cancellation, or termination of certain insurance
145 policies; prohibiting the cancellation of certain
146 policies that have been in effect for a specified
147 amount of time except under certain circumstances;
148 amending s. 627.4137, F.S.; adding licensed company
149 adjusters to the list of persons who may respond to a
150 claimant’s written request for information relating to
151 liability insurance coverage; amending s. 627.421,
152 F.S.; authorizing the electronic delivery of certain
153 insurance documents; amending s. 627.43141, F.S.;
154 authorizing a notice of change in policy terms to be
155 sent in a separate mailing to an insured under certain
156 circumstances; requiring an insurer to provide such
157 notice to the insured’s insurance agent; amending s.
158 627.6484, F.S.; providing that coverage for each
159 policyholder of the Florida Comprehensive Health
160 Association terminates on a specified date; requiring
161 the association to provide assistance to
162 policyholders; requiring the association to notify
163 policyholders of termination of coverage and provide
164 information concerning how to obtain other coverage;
165 requiring the association to impose a final assessment
166 or provide a refund to member insurers, sell or
167 dispose of physical assets, perform a final
168 accounting, legally dissolve the association, submit a
169 required report, and transfer all records to the
170 Department of Financial Services; repealing s.
171 627.64872, F.S., relating to the Florida Health
172 Insurance Plan; providing for the future repeal of ss.
173 627.648, 627.6482, 627.6484, 627.6486, 627.6488,
174 627.6489, 627.649, 627.6492, 627.6494, 627.6496,
175 627.6498, and 627.6499, F.S., relating to the Florida
176 Comprehensive Health Association Act, definitions,
177 termination of enrollment and availability of other
178 coverage, eligibility, the Florida Comprehensive
179 Health Association, the Disease Management Program,
180 the administrator of the health insurance plan,
181 participation of insurers, insurer assessments,
182 deferment, and assessment limitations, issuing of
183 policies, minimum benefits coverage and exclusions,
184 premiums, and deductibles, and reporting by insurers
185 and third-party administrators, respectively; amending
186 s. 627.7015, F.S.; revising the rulemaking authority
187 of the department with respect to qualifications and
188 specified types of penalties covered under the
189 property insurance mediation program; creating s.
190 627.70151, F.S.; providing criteria for an insurer or
191 policyholder to challenge the impartiality of a loss
192 appraisal umpire for purposes of disqualifying such
193 umpire; amending s. 627.706, F.S.; revising the
194 definition of the term “neutral evaluator”; amending
195 s. 627.7074, F.S.; requiring the department to adopt
196 rules relating to the certification of neutral
197 evaluators; amending s. 627.736, F.S.; revising the
198 time period for applicability of certain Medicare fee
199 schedules or payment limitations; amending s. 627.745,
200 F.S.; revising qualifications for approval as a
201 mediator by the department; providing grounds for the
202 department to deny an application, or suspend or
203 revoke approval of a mediator or certification of a
204 neutral evaluator; authorizing the department to adopt
205 rules; amending s. 627.841, F.S.; providing that an
206 insurance premium finance company may impose a fee for
207 payments returned due to insufficient funds; amending
208 s. 627.952, F.S.; providing that certain persons who
209 are not residents of this state must be licensed and
210 appointed as nonresident surplus lines agents in this
211 state in order to engage in specified activities with
212 respect to servicing insurance contracts,
213 certificates, or agreements for purchasing or risk
214 retention groups; deleting a fidelity bond requirement
215 applicable to certain nonresident agents who are
216 licensed as surplus lines agents in another state;
217 amending ss. 627.971 and 627.972, F.S.; including
218 licensed mutual insurers in financial guaranty
219 insurance corporations; amending s. 628.901, F.S.;
220 revising the definition of the term “qualifying
221 reinsurer parent company”; amending s. 628.909, F.S.;
222 providing for applicability of certain provisions of
223 the Insurance Code to specified captive insurers;
224 amending s. 634.406, F.S.; revising criteria
225 authorizing premiums of certain service warranty
226 associations to exceed their specified net assets
227 limitations; revising requirements relating to
228 contractual liability policies that insure warranty
229 associations; providing an effective date.
230
231 Be It Enacted by the Legislature of the State of Florida:
232
233 Section 1. Paragraph (b) of subsection (6) of section
234 215.555, Florida Statutes, is amended to read:
235 215.555 Florida Hurricane Catastrophe Fund.—
236 (6) REVENUE BONDS.—
237 (b) Emergency assessments—
238 1. If the board determines that the amount of revenue
239 produced under subsection (5) is insufficient to fund the
240 obligations, costs, and expenses of the fund and the
241 corporation, including repayment of revenue bonds and that
242 portion of the debt service coverage not met by reimbursement
243 premiums, the board shall direct the Office of Insurance
244 Regulation to levy, by order, an emergency assessment on direct
245 premiums for all property and casualty lines of business in this
246 state, including property and casualty business of surplus lines
247 insurers regulated under part VIII of chapter 626, but not
248 including any workers’ compensation premiums or medical
249 malpractice premiums. As used in this subsection, the term
250 “property and casualty business” includes all lines of business
251 identified on Form 2, Exhibit of Premiums and Losses, in the
252 annual statement required of authorized insurers by s. 624.424
253 and any rule adopted under this section, except for those lines
254 identified as accident and health insurance and except for
255 policies written under the National Flood Insurance Program. The
256 assessment shall be specified as a percentage of direct written
257 premium and is subject to annual adjustments by the board in
258 order to meet debt obligations. The same percentage applies
259 shall apply to all policies in lines of business subject to the
260 assessment issued or renewed during the 12-month period
261 beginning on the effective date of the assessment.
262 2. A premium is not subject to an annual assessment under
263 this paragraph in excess of 6 percent of premium with respect to
264 obligations arising out of losses attributable to any one
265 contract year, and a premium is not subject to an aggregate
266 annual assessment under this paragraph in excess of 10 percent
267 of premium. An annual assessment under this paragraph continues
268 shall continue as long as the revenue bonds issued with respect
269 to which the assessment was imposed are outstanding, including
270 any bonds the proceeds of which were used to refund the revenue
271 bonds, unless adequate provision has been made for the payment
272 of the bonds under the documents authorizing issuance of the
273 bonds.
274 3. Emergency assessments shall be collected from
275 policyholders. Emergency assessments shall be remitted by
276 insurers as a percentage of direct written premium for the
277 preceding calendar quarter as specified in the order from the
278 Office of Insurance Regulation. The office shall verify the
279 accurate and timely collection and remittance of emergency
280 assessments and shall report the information to the board in a
281 form and at a time specified by the board. Each insurer
282 collecting assessments shall provide the information with
283 respect to premiums and collections as may be required by the
284 office to enable the office to monitor and verify compliance
285 with this paragraph.
286 4. With respect to assessments of surplus lines premiums,
287 each surplus lines agent shall collect the assessment at the
288 same time as the agent collects the surplus lines tax required
289 by s. 626.932, and the surplus lines agent shall remit the
290 assessment to the Florida Surplus Lines Service Office created
291 by s. 626.921 at the same time as the agent remits the surplus
292 lines tax to the Florida Surplus Lines Service Office. The
293 emergency assessment on each insured procuring coverage and
294 filing under s. 626.938 shall be remitted by the insured to the
295 Florida Surplus Lines Service Office at the time the insured
296 pays the surplus lines tax to the Florida Surplus Lines Service
297 Office. The Florida Surplus Lines Service Office shall remit the
298 collected assessments to the fund or corporation as provided in
299 the order levied by the Office of Insurance Regulation. The
300 Florida Surplus Lines Service Office shall verify the proper
301 application of such emergency assessments and shall assist the
302 board in ensuring the accurate and timely collection and
303 remittance of assessments as required by the board. The Florida
304 Surplus Lines Service Office shall annually calculate the
305 aggregate written premium on property and casualty business,
306 other than workers’ compensation and medical malpractice,
307 procured through surplus lines agents and insureds procuring
308 coverage and filing under s. 626.938 and shall report the
309 information to the board in a form and at a time specified by
310 the board.
311 5. Any assessment authority not used for a particular
312 contract year may be used for a subsequent contract year. If,
313 for a subsequent contract year, the board determines that the
314 amount of revenue produced under subsection (5) is insufficient
315 to fund the obligations, costs, and expenses of the fund and the
316 corporation, including repayment of revenue bonds and that
317 portion of the debt service coverage not met by reimbursement
318 premiums, the board shall direct the Office of Insurance
319 Regulation to levy an emergency assessment up to an amount not
320 exceeding the amount of unused assessment authority from a
321 previous contract year or years, plus an additional 4 percent
322 provided that the assessments in the aggregate do not exceed the
323 limits specified in subparagraph 2.
324 6. The assessments otherwise payable to the corporation
325 under this paragraph shall be paid to the fund unless and until
326 the Office of Insurance Regulation and the Florida Surplus Lines
327 Service Office have received a notice from the corporation and
328 the fund a notice, which shall be conclusive and upon which they
329 may rely without further inquiry, that the corporation has
330 issued bonds and the fund has no agreements in effect with local
331 governments under paragraph (c). On or after the date of the
332 notice and until the date the corporation has no bonds
333 outstanding, the fund shall have no right, title, or interest in
334 or to the assessments, except as provided in the fund’s
335 agreement with the corporation.
336 7. Emergency assessments are not premium and are not
337 subject to the premium tax, to the surplus lines tax, to any
338 fees, or to any commissions. An insurer is liable for all
339 assessments that it collects and must treat the failure of an
340 insured to pay an assessment as a failure to pay the premium. An
341 insurer is not liable for uncollectible assessments.
342 8. If When an insurer is required to return an unearned
343 premium, it shall also return any collected assessment
344 attributable to the unearned premium. A credit adjustment to the
345 collected assessment may be made by the insurer with regard to
346 future remittances that are payable to the fund or corporation,
347 but the insurer is not entitled to a refund.
348 9. If When a surplus lines insured or an insured who has
349 procured coverage and filed under s. 626.938 is entitled to the
350 return of an unearned premium, the Florida Surplus Lines Service
351 Office shall provide a credit or refund to the agent or such
352 insured for the collected assessment attributable to the
353 unearned premium before prior to remitting the emergency
354 assessment collected to the fund or corporation.
355 10. The exemption of medical malpractice insurance premiums
356 from emergency assessments under this paragraph is repealed May
357 31, 2016 2013, and medical malpractice insurance premiums shall
358 be subject to emergency assessments attributable to loss events
359 occurring in the contract years commencing on June 1, 2016 2013.
360 Section 2. Subsection (1) of section 316.646, Florida
361 Statutes, is amended, and subsection (5) is added to that
362 section, to read:
363 316.646 Security required; proof of security and display
364 thereof; dismissal of cases.—
365 (1) A Any person required by s. 324.022 to maintain
366 property damage liability security, required by s. 324.023 to
367 maintain liability security for bodily injury or death, or
368 required by s. 627.733 to maintain personal injury protection
369 security on a motor vehicle shall have in his or her immediate
370 possession at all times while operating such motor vehicle
371 proper proof of maintenance of the required security. Such proof
372 shall be a uniform proof-of-insurance card, in paper or
373 electronic format, in a form prescribed by the department, a
374 valid insurance policy, an insurance policy binder, a
375 certificate of insurance, or such other proof as may be
376 prescribed by the department. If a person presents an electronic
377 device to a law enforcement officer for the purpose of
378 displaying a proof-of-insurance card in an electronic format:
379 (a) The person presenting the device is not deemed to
380 consent to access to any information on the electronic device
381 other than the displayed proof-of-insurance card.
382 (b) The law enforcement officer is not liable for damage to
383 the electronic device.
384 (5) The department may adopt rules to implement this
385 section.
386 Section 3. Paragraph (a) of subsection (5) of section
387 320.02, Florida Statutes, is amended to read:
388 320.02 Registration required; application for registration;
389 forms.—
390 (5)(a) Proof that personal injury protection benefits have
391 been purchased when required under s. 627.733, that property
392 damage liability coverage has been purchased as required under
393 s. 324.022, that bodily injury or death coverage has been
394 purchased if required under s. 324.023, and that combined bodily
395 liability insurance and property damage liability insurance have
396 been purchased when required under s. 627.7415 shall be provided
397 in the manner prescribed by law by the applicant at the time of
398 application for registration of any motor vehicle that is
399 subject to such requirements. The issuing agent shall refuse to
400 issue registration if such proof of purchase is not provided.
401 Insurers shall furnish uniform proof-of-purchase cards, in paper
402 or electronic format, in a form prescribed by the department and
403 shall include the name of the insured’s insurance company, the
404 coverage identification number, and the make, year, and vehicle
405 identification number of the vehicle insured. The card must
406 shall contain a statement notifying the applicant of the penalty
407 specified in s. 316.646(4). The card or insurance policy,
408 insurance policy binder, or certificate of insurance or a
409 photocopy of any of these; an affidavit containing the name of
410 the insured’s insurance company, the insured’s policy number,
411 and the make and year of the vehicle insured; or such other
412 proof as may be prescribed by the department constitutes shall
413 constitute sufficient proof of purchase. If an affidavit is
414 provided as proof, it must shall be in substantially the
415 following form:
416
417 Under penalty of perjury, I ...(Name of insured)... do hereby
418 certify that I have ...(Personal Injury Protection, Property
419 Damage Liability, and, when required, Bodily Injury
420 Liability)... Insurance currently in effect with ...(Name of
421 insurance company)... under ...(policy number)... covering
422 ...(make, year, and vehicle identification number of
423 vehicle).... ...(Signature of Insured)...
424
425 Such affidavit shall include the following warning:
426
427 WARNING: GIVING FALSE INFORMATION IN ORDER TO OBTAIN A VEHICLE
428 REGISTRATION CERTIFICATE IS A CRIMINAL OFFENSE UNDER FLORIDA
429 LAW. ANYONE GIVING FALSE INFORMATION ON THIS AFFIDAVIT IS
430 SUBJECT TO PROSECUTION.
431
432 When an application is made through a licensed motor vehicle
433 dealer as required in s. 319.23, the original or a photostatic
434 copy of such card, insurance policy, insurance policy binder, or
435 certificate of insurance or the original affidavit from the
436 insured shall be forwarded by the dealer to the tax collector of
437 the county or the Department of Highway Safety and Motor
438 Vehicles for processing. By executing the aforesaid affidavit,
439 no licensed motor vehicle dealer will be liable in damages for
440 any inadequacy, insufficiency, or falsification of any statement
441 contained therein. A card shall also indicate the existence of
442 any bodily injury liability insurance voluntarily purchased.
443 Section 4. Subsection (8) is added to section 554.1021,
444 Florida Statutes, to read:
445 554.1021 Definitions.—As used in ss. 554.1011-554.115:
446 (8) “Authorized inspection agency” means:
447 (a) A county, city, town, or other governmental subdivision
448 that has adopted and administers, at a minimum, Section I of the
449 A.S.M.E. Boiler and Pressure Vessel Code as a legal requirement
450 and whose inspectors hold valid certificates of competency in
451 accordance with s. 554.113; or
452 (b) An insurance company that is licensed or registered by
453 an appropriate authority of any state of the United States or
454 province of Canada and whose inspectors hold valid certificates
455 of competency in accordance with s. 554.113.
456 Section 5. Section 554.107, Florida Statutes, is amended to
457 read:
458 554.107 Special inspectors.—
459 (1) Upon application by any an authorized inspection agency
460 company licensed to insure boilers in this state, the chief
461 inspector shall issue a certificate of competency as a special
462 inspector to an any inspector employed by the agency if he or
463 she company, provided that such inspector satisfies the
464 competency requirements for inspectors as provided in s.
465 554.113.
466 (2) The certificate of competency of a special inspector
467 remains shall remain in effect only so long as the special
468 inspector is employed by an authorized inspection agency a
469 company licensed to insure boilers in this state. Upon
470 termination of employment with such agency company, a special
471 inspector shall, in writing, notify the chief inspector of such
472 termination. Such notice shall be given within 15 days following
473 the date of termination.
474 Section 6. Subsection (1) of section 554.109, Florida
475 Statutes, is amended to read:
476 554.109 Exemptions.—
477 (1) An Any insurance company that insures insuring a boiler
478 located in a public assembly location in this state shall
479 inspect or contract with an authorized inspection agency to
480 inspect such boiler so insured, and shall annually report to the
481 department the identity of the authorized inspection agency that
482 performs a required boiler inspection on behalf of the company.
483 A any county, city, town, or other governmental subdivision that
484 which has adopted into law the Boiler and Pressure Vessel Code
485 of the American Society of Mechanical Engineers and the National
486 Board Inspection Code for the construction, installation,
487 inspection, maintenance, and repair of boilers, regulating such
488 boilers in public assembly locations, shall inspect such boilers
489 so regulated; provided that such inspection shall be conducted
490 by a special inspector licensed pursuant to ss. 554.1011
491 554.115. Upon filing of a report of satisfactory inspection with
492 the department, such boiler is exempt from inspection by the
493 department.
494 Section 7. Paragraph (f) of subsection (1) of section
495 624.413, Florida Statutes, is amended to read:
496 624.413 Application for certificate of authority.—
497 (1) To apply for a certificate of authority, an insurer
498 shall file its application therefor with the office, upon a form
499 adopted by the commission and furnished by the office, showing
500 its name; location of its home office and, if an alien insurer,
501 its principal office in the United States; kinds of insurance to
502 be transacted; state or country of domicile; and such additional
503 information as the commission reasonably requires, together with
504 the following documents:
505 (f) If a foreign or alien insurer, a copy of the report of
506 the most recent examination of the insurer certified by the
507 public official having supervision of insurance in its state of
508 domicile or of entry into the United States. The end of the most
509 recent year covered by the examination must be within the 5-year
510 3-year period preceding the date of application. In lieu of the
511 certified examination report, the office may accept an audited
512 certified public accountant’s report prepared on a basis
513 consistent with the insurance laws of the insurer’s state of
514 domicile, certified by the public official having supervision of
515 insurance in its state of domicile or of entry into the United
516 States.
517 Section 8. Subsection (4) is added to section 626.0428,
518 Florida Statutes, to read:
519 626.0428 Agency personnel powers, duties, and limitations.—
520 (4)(a) Each place of business established by an agent or
521 agency, firm, corporation, or association must be in the active
522 full-time charge of a licensed and appointed agent holding the
523 required agent licenses to transact the lines of insurance being
524 handled at the location.
525 (b) Notwithstanding paragraph (a), the licensed agent in
526 charge of an insurance agency may also be the agent in charge of
527 additional branch office locations of the agency if insurance
528 activities requiring licensure as an insurance agent do not
529 occur at any location when the agent is not physically present
530 and unlicensed employees at the location do not engage in
531 insurance activities requiring licensure as an insurance agent
532 or customer representative.
533 (c) An insurance agency and each branch place of business
534 of an insurance agency shall designate an agent in charge and
535 file the name and license number of the agent in charge and the
536 physical address of the insurance agency location with the
537 department at the department’s designated website. The
538 designation of the agent in charge may be changed at the option
539 of the agency. A change of the designated agent in charge is
540 effective upon notification to the department, which shall be
541 provided within 30 days after such change.
542 (d) For the purposes of this subsection, an “agent in
543 charge” is the licensed and appointed agent who is responsible
544 for the supervision of all individuals within an insurance
545 agency location, regardless of whether such individuals deal
546 with the general public in the solicitation or negotiation of
547 insurance contracts or the collection or accounting of moneys.
548 (e) An agent in charge of an insurance agency is
549 accountable for wrongful acts, misconduct, or violations of
550 provisions of this code committed by the agent or by any person
551 under his or her supervision while acting on behalf of the
552 agency. This section may not be construed to render the agent in
553 charge criminally liable for an act unless he or she personally
554 committed or knew or should have known of the act and of the
555 facts constituting a violation of this chapter.
556 (f) An insurance agency location may not conduct the
557 business of insurance unless the agency designates an agent in
558 charge at all times. If the agency fails to update the
559 designation of the agent in charge within 90 days after the date
560 of a change in designation, the department shall automatically
561 revoke the agency’s license.
562 Section 9. Subsection (7) of section 626.112, Florida
563 Statutes, is amended to read:
564 626.112 License and appointment required; agents, customer
565 representatives, adjusters, insurance agencies, service
566 representatives, managing general agents.—
567 (7)(a) Effective October 1, 2006, No individual, firm,
568 partnership, corporation, association, or any other entity shall
569 act in its own name or under a trade name, directly or
570 indirectly, as an insurance agency, unless it complies with s.
571 626.172 with respect to possessing an insurance agency license
572 for each place of business at which it engages in an any
573 activity that which may be performed only by a licensed
574 insurance agent. However, an insurance agency that is owned and
575 operated by a single licensed agent conducting business in his
576 or her individual name and not employing or otherwise using the
577 services of or appointing other licensees is exempt from the
578 agency licensing requirements of this subsection. A branch place
579 of business that is established by a licensed agency is
580 considered a branch agency and is not required to be licensed so
581 long as it transacts business under the same name and federal
582 tax identification number as the licensed agency and has
583 designated a licensed agent in charge of the location as
584 required by s. 626.0428 and the address and telephone number of
585 the location have been submitted to the department for inclusion
586 in the licensing record of the licensed agency within 30 days
587 after insurance transactions begin at the location Each agency
588 engaged in business in this state before January 1, 2003, which
589 is wholly owned by insurance agents currently licensed and
590 appointed under this chapter, each incorporated agency whose
591 voting shares are traded on a securities exchange, each agency
592 designated and subject to supervision and inspection as a branch
593 office under the rules of the National Association of Securities
594 Dealers, and each agency whose primary function is offering
595 insurance as a service or member benefit to members of a
596 nonprofit corporation may file an application for registration
597 in lieu of licensure in accordance with s. 626.172(3). Each
598 agency engaged in business before October 1, 2006, shall file an
599 application for licensure or registration on or before October
600 1, 2006.
601 (b)1. If an agency is required to be licensed but fails to
602 file an application for licensure in accordance with this
603 section, the department shall impose on the agency an
604 administrative penalty in an amount of up to $10,000.
605 2. If an agency is eligible for registration but fails to
606 file an application for registration or an application for
607 licensure in accordance with this section, the department shall
608 impose on the agency an administrative penalty in an amount of
609 up to $5,000.
610 (c)(b) Effective October 1, 2013, the department must
611 automatically convert the registration of an approved a
612 registered insurance agency to shall, as a condition precedent
613 to continuing business, obtain an insurance agency license if
614 the department finds that, with respect to any majority owner,
615 partner, manager, director, officer, or other person who manages
616 or controls the agency, any person has:
617 1. Been found guilty of, or has pleaded guilty or nolo
618 contendere to, a felony in this state or any other state
619 relating to the business of insurance or to an insurance agency,
620 without regard to whether a judgment of conviction has been
621 entered by the court having jurisdiction of the cases.
622 2. Employed any individual in a managerial capacity or in a
623 capacity dealing with the public who is under an order of
624 revocation or suspension issued by the department. An insurance
625 agency may request, on forms prescribed by the department,
626 verification of any person’s license status. If a request is
627 mailed within 5 working days after an employee is hired, and the
628 employee’s license is currently suspended or revoked, the agency
629 shall not be required to obtain a license, if the unlicensed
630 person’s employment is immediately terminated.
631 3. Operated the agency or permitted the agency to be
632 operated in violation of s. 626.747.
633 4. With such frequency as to have made the operation of the
634 agency hazardous to the insurance-buying public or other
635 persons:
636 a. Solicited or handled controlled business. This
637 subparagraph shall not prohibit the licensing of any lending or
638 financing institution or creditor, with respect to insurance
639 only, under credit life or disability insurance policies of
640 borrowers from the institutions, which policies are subject to
641 part IX of chapter 627.
642 b. Misappropriated, converted, or unlawfully withheld
643 moneys belonging to insurers, insureds, beneficiaries, or others
644 and received in the conduct of business under the license.
645 c. Unlawfully rebated, attempted to unlawfully rebate, or
646 unlawfully divided or offered to divide commissions with
647 another.
648 d. Misrepresented any insurance policy or annuity contract,
649 or used deception with regard to any policy or contract, done
650 either in person or by any form of dissemination of information
651 or advertising.
652 e. Violated any provision of this code or any other law
653 applicable to the business of insurance in the course of dealing
654 under the license.
655 f. Violated any lawful order or rule of the department.
656 g. Failed or refused, upon demand, to pay over to any
657 insurer he or she represents or has represented any money coming
658 into his or her hands belonging to the insurer.
659 h. Violated the provision against twisting as defined in s.
660 626.9541(1)(l).
661 i. In the conduct of business, engaged in unfair methods of
662 competition or in unfair or deceptive acts or practices, as
663 prohibited under part IX of this chapter.
664 j. Willfully overinsured any property insurance risk.
665 k. Engaged in fraudulent or dishonest practices in the
666 conduct of business arising out of activities related to
667 insurance or the insurance agency.
668 l. Demonstrated lack of fitness or trustworthiness to
669 engage in the business of insurance arising out of activities
670 related to insurance or the insurance agency.
671 m. Authorized or knowingly allowed individuals to transact
672 insurance who were not then licensed as required by this code.
673 5. Knowingly employed any person who within the preceding 3
674 years has had his or her relationship with an agency terminated
675 in accordance with paragraph (d).
676 6. Willfully circumvented the requirements or prohibitions
677 of this code.
678 Section 10. Subsections (2), (3), and (4) of section
679 626.172, Florida Statutes, are amended to read:
680 626.172 Application for insurance agency license.—
681 (2) An application for an insurance agency license must
682 shall be signed by the owner or owners of the agency. If the
683 agency is incorporated, the application must shall be signed by
684 the president and secretary of the corporation. The application
685 for an insurance agency license must shall include:
686 (a) The name of each majority owner, partner, officer, and
687 director of the insurance agency.
688 (b) The residence address of each person required to be
689 listed in the application under paragraph (a).
690 (c) The name of the insurance agency, and its principal
691 business street address and a valid e-mail address of the
692 insurance agency.
693 (d) The physical address location of each branch agency,
694 including its name, e-mail address, and telephone number and the
695 date that the branch location began transacting insurance office
696 and the name under which each agency office conducts or will
697 conduct business.
698 (e) The name of each agent to be in full-time charge of an
699 agency office and specification of which office, including
700 branch locations.
701 (f) The fingerprints of each of the following:
702 1. A sole proprietor;
703 2. Each partner;
704 3. Each owner of an unincorporated agency;
705 4. Each owner who directs or participates in the management
706 or control of an incorporated agency whose shares are not traded
707 on a securities exchange;
708 5. The president, senior vice presidents, treasurer,
709 secretary, and directors of the agency; and
710 6. Any other person who directs or participates in the
711 management or control of the agency, whether through the
712 ownership of voting securities, by contract, by ownership of
713 agency bank accounts, or otherwise.
714
715 Fingerprints must be taken by a law enforcement agency or other
716 entity approved by the department and must be accompanied by the
717 fingerprint processing fee specified in s. 624.501. Fingerprints
718 must shall be processed in accordance with s. 624.34. However,
719 fingerprints need not be filed for an any individual who is
720 currently licensed and appointed under this chapter. This
721 paragraph does not apply to corporations whose voting shares are
722 traded on a securities exchange.
723 (g) Such additional information as the department requires
724 by rule to ascertain the trustworthiness and competence of
725 persons required to be listed on the application and to
726 ascertain that such persons meet the requirements of this code.
727 However, the department may not require that credit or character
728 reports be submitted for persons required to be listed on the
729 application.
730 (h) Beginning October 1, 2005, The department must shall
731 accept the uniform application for nonresident agency licensure.
732 The department may adopt by rule revised versions of the uniform
733 application.
734 (3) The department shall issue a registration as an
735 insurance agency to any agency that files a written application
736 with the department and qualifies for registration. The
737 application for registration shall require the agency to provide
738 the same information required for an agency licensed under
739 subsection (2), the agent identification number for each owner
740 who is a licensed agent, proof that the agency qualifies for
741 registration as provided in s. 626.112(7), and any other
742 additional information that the department determines is
743 necessary in order to demonstrate that the agency qualifies for
744 registration. The application must be signed by the owner or
745 owners of the agency. If the agency is incorporated, the
746 application must be signed by the president and the secretary of
747 the corporation. An agent who owns the agency need not file
748 fingerprints with the department if the agent obtained a license
749 under this chapter and the license is currently valid.
750 (a) If an application for registration is denied, the
751 agency must file an application for licensure no later than 30
752 days after the date of the denial of registration.
753 (b) A registered insurance agency must file an application
754 for licensure no later than 30 days after the date that any
755 person who is not a licensed and appointed agent in this state
756 acquires any ownership interest in the agency. If an agency
757 fails to file an application for licensure in compliance with
758 this paragraph, the department shall impose an administrative
759 penalty in an amount of up to $5,000 on the agency.
760 (c) Sections 626.6115 and 626.6215 do not apply to agencies
761 registered under this subsection.
762 (3)(4) The department must shall issue a license or
763 registration to each agency upon approval of the application,
764 and each agency location must shall display the license or
765 registration prominently in a manner that makes it clearly
766 visible to a any customer or potential customer who enters the
767 agency.
768 Section 11. Paragraph (d) of subsection (1) of section
769 626.321, Florida Statutes, is amended to read:
770 626.321 Limited licenses.—
771 (1) The department shall issue to a qualified applicant a
772 license as agent authorized to transact a limited class of
773 business in any of the following categories of limited lines
774 insurance:
775 (d) Motor vehicle rental insurance.—
776 1. License covering only insurance of the risks set forth
777 in this paragraph when offered, sold, or solicited with and
778 incidental to the rental or lease of a motor vehicle and which
779 applies only to the motor vehicle that is the subject of the
780 lease or rental agreement and the occupants of the motor
781 vehicle:
782 a. Excess motor vehicle liability insurance providing
783 coverage in excess of the standard liability limits provided by
784 the lessor in the lessor’s lease to a person renting or leasing
785 a motor vehicle from the licensee’s employer for liability
786 arising in connection with the negligent operation of the leased
787 or rented motor vehicle.
788 b. Insurance covering the liability of the lessee to the
789 lessor for damage to the leased or rented motor vehicle.
790 c. Insurance covering the loss of or damage to baggage,
791 personal effects, or travel documents of a person renting or
792 leasing a motor vehicle.
793 d. Insurance covering accidental personal injury or death
794 of the lessee and any passenger who is riding or driving with
795 the covered lessee in the leased or rented motor vehicle.
796 2. Insurance under a motor vehicle rental insurance license
797 may be issued only if the lease or rental agreement is for no
798 more than 60 days, the lessee is not provided coverage for more
799 than 60 consecutive days per lease period, and the lessee is
800 given written notice that his or her personal insurance policy
801 providing coverage on an owned motor vehicle may provide
802 coverage of such risks and that the purchase of the insurance is
803 not required in connection with the lease or rental of a motor
804 vehicle. If the lease is extended beyond 60 days, the coverage
805 may be extended one time only for a period not to exceed an
806 additional 60 days. Insurance may be provided to the lessee as
807 an additional insured on a policy issued to the licensee’s
808 employer.
809 3. The license may be issued only to the full-time salaried
810 employee of a licensed general lines agent or to a business
811 entity that offers motor vehicles for rent or lease if insurance
812 sales activities authorized by the license are in connection
813 with and incidental to the rental or lease of a motor vehicle.
814 a. A license issued to a business entity that offers motor
815 vehicles for rent or lease encompasses each office, branch
816 office, employee, or place of business making use of the
817 entity’s business name in order to offer, solicit, and sell
818 insurance pursuant to this paragraph.
819 b. The application for licensure must list the name,
820 address, and phone number for each office, branch office, or
821 place of business that is to be covered by the license. The
822 licensee shall notify the department of the name, address, and
823 phone number of any new location that is to be covered by the
824 license before the new office, branch office, or place of
825 business engages in the sale of insurance pursuant to this
826 paragraph. The licensee must notify the department within 30
827 days after closing or terminating an office, branch office, or
828 place of business. Upon receipt of the notice, the department
829 shall delete the office, branch office, or place of business
830 from the license.
831 c. A licensed and appointed entity is directly responsible
832 and accountable for all acts of the licensee’s employees.
833 Section 12. Section 626.382, Florida Statutes, is amended
834 to read:
835 626.382 Continuation, expiration of license; insurance
836 agencies.—An insurance agency license continues The license of
837 any insurance agency shall be issued for a period of 3 years and
838 shall continue in force until it is canceled, suspended,
839 revoked, or otherwise terminated. A license may be renewed by
840 submitting a renewal request to the department on a form adopted
841 by department rule.
842 Section 13. Section 626.601, Florida Statutes, is amended
843 to read:
844 626.601 Improper conduct; inquiry; fingerprinting.—
845 (1) The department or office may, upon its own motion or
846 upon a written complaint signed by an any interested person and
847 filed with the department or office, inquire into any alleged
848 improper conduct of a any licensed, approved, or certified
849 insurance agency, agent, adjuster, service representative,
850 managing general agent, customer representative, title insurance
851 agent, title insurance agency, mediator, neutral evaluator,
852 continuing education course provider, instructor, school
853 official, or monitor group under this code. The department or
854 office may thereafter initiate an investigation of any such
855 individual or entity licensee if it has reasonable cause to
856 believe that the individual or entity licensee has violated any
857 provision of the insurance code. During the course of its
858 investigation, the department or office shall contact the
859 individual or entity licensee being investigated unless it
860 determines that contacting such individual or entity person
861 could jeopardize the successful completion of the investigation
862 or cause injury to the public.
863 (2) In the investigation by the department or office of the
864 alleged misconduct, the individual or entity licensee shall,
865 whenever so required by the department or office, cause the
866 individual’s or entity’s his or her books and records to be open
867 for inspection for the purpose of such inquiries.
868 (3) The complaints against an individual or entity any
869 licensee may be informally alleged and are not required to
870 include language need not be in any such language as is
871 necessary to charge a crime on an indictment or information.
872 (4) The expense for any hearings or investigations
873 conducted under this law, as well as the fees and mileage of
874 witnesses, may be paid out of the appropriate fund.
875 (5) If the department or office, after investigation, has
876 reason to believe that an individual a licensee may have been
877 found guilty of or pleaded guilty or nolo contendere to a felony
878 or a crime related to the business of insurance in this or any
879 other state or jurisdiction, the department or office may
880 require the individual licensee to file with the department or
881 office a complete set of his or her fingerprints, which must
882 shall be accompanied by the fingerprint processing fee set forth
883 in s. 624.501. The fingerprints shall be taken by an authorized
884 law enforcement agency or other department-approved entity.
885 (6) The complaint and any information obtained pursuant to
886 the investigation by the department or office are confidential
887 and are exempt from the provisions of s. 119.07, unless the
888 department or office files a formal administrative complaint,
889 emergency order, or consent order against the individual or
890 entity licensee. Nothing in This subsection does not shall be
891 construed to prevent the department or office from disclosing
892 the complaint or such information as it deems necessary to
893 conduct the investigation, to update the complainant as to the
894 status and outcome of the complaint, or to share such
895 information with a any law enforcement agency.
896 Section 14. Section 626.747, Florida Statutes, is repealed.
897 Section 15. Paragraph (b) of subsection (1) of section
898 626.8411, Florida Statutes, is amended to read:
899 626.8411 Application of Florida Insurance Code provisions
900 to title insurance agents or agencies.—
901 (1) The following provisions of part II applicable to
902 general lines agents or agencies also apply to title insurance
903 agents or agencies:
904 (b) Section 626.0428(4)(a) and (b) 626.747, relating to
905 branch agencies.
906 Section 16. Paragraph (c) of subsection (2) and subsection
907 (3) of section 626.8805, Florida Statutes, is amended to read:
908 626.8805 Certificate of authority to act as administrator.—
909 (2) The administrator shall file with the office an
910 application for a certificate of authority upon a form to be
911 adopted by the commission and furnished by the office, which
912 application shall include or have attached the following
913 information and documents:
914 (c) The names, addresses, official positions, and
915 professional qualifications of the individuals who are employed
916 or retained by the administrator and who are responsible for the
917 conduct of the affairs of the administrator, including all
918 members of the board of directors, board of trustees, executive
919 committee, or other governing board or committee, and the
920 principal officers in the case of a corporation or, the partners
921 or members in the case of a partnership or association of the
922 administrator, and any other person who exercises control or
923 influence over the affairs of the administrator.
924 (3) The applicant shall make available for inspection by
925 the office copies of all contracts relating to services provided
926 by the administrator to with insurers or other persons utilizing
927 the services of the administrator.
928 Section 17. Subsections (1) and (3) of section 626.8817,
929 Florida Statutes, are amended to read:
930 626.8817 Responsibilities of insurance company with respect
931 to administration of coverage insured.—
932 (1) If an insurer uses the services of an administrator,
933 the insurer is responsible for determining the benefits, premium
934 rates, underwriting criteria, and claims payment procedures
935 applicable to the coverage and for securing reinsurance, if any.
936 The rules pertaining to these matters shall be provided, in
937 writing, by the insurer, or its designee, to the administrator.
938 The responsibilities of the administrator as to any of these
939 matters shall be set forth in a the written agreement binding
940 upon between the administrator and the insurer.
941 (3) In cases in which an administrator administers benefits
942 for more than 100 certificateholders on behalf of an insurer,
943 the insurer shall, at least semiannually, conduct a review of
944 the operations of the administrator. At least one such review
945 must be an onsite audit of the operations of the administrator.
946 The insurer may contract with a qualified third party to conduct
947 such examination.
948 Section 18. Subsections (1) and (4) of section 626.882,
949 Florida Statutes, are amended to read:
950 626.882 Agreement between administrator and insurer;
951 required provisions; maintenance of records.—
952 (1) A No person may not act as an administrator without a
953 written agreement, as required under s. 626.8817, which
954 specifies the rights, duties and obligations of the between such
955 person as administrator and an insurer.
956 (4) If a policy is issued to a trustee or trustees, a copy
957 of the trust agreement and any amendments to that agreement
958 shall be furnished to the insurer or its designee by the
959 administrator and shall be retained as part of the official
960 records of both the administrator and the insurer for the
961 duration of the policy and for 5 years thereafter.
962 Section 19. Subsections (3), (4), and (5) of section
963 626.883, Florida Statutes, are amended to read:
964 626.883 Administrator as intermediary; collections held in
965 fiduciary capacity; establishment of account; disbursement;
966 payments on behalf of insurer.—
967 (3) If charges or premiums deposited in a fiduciary account
968 have been collected on behalf of or for more than one insurer,
969 the administrator shall keep records clearly recording the
970 deposits in and withdrawals from such account on behalf of or
971 for each insurer. The administrator shall, upon request of an
972 insurer or its designee, furnish such insurer with copies of
973 records pertaining to deposits and withdrawals on behalf of or
974 for such insurer.
975 (4) The administrator may not pay a any claim by
976 withdrawals from a fiduciary account. Withdrawals from such
977 account shall be made as provided in the written agreement
978 required under ss. 626.8817 and 626.882 between the
979 administrator and the insurer for any of the following:
980 (a) Remittance to an insurer entitled to such remittance.
981 (b) Deposit in an account maintained in the name of such
982 insurer.
983 (c) Transfer to and deposit in a claims-paying account,
984 with claims to be paid as provided by such insurer.
985 (d) Payment to a group policyholder for remittance to the
986 insurer entitled to such remittance.
987 (e) Payment to the administrator of the commission, fees,
988 or charges of the administrator.
989 (f) Remittance of return premium to the person or persons
990 entitled to such return premium.
991 (5) All claims paid by the administrator from funds
992 collected on behalf of the insurer shall be paid only on drafts
993 of, and as authorized by, such insurer or its designee.
994 Section 20. Subsection (3) of section 626.884, Florida
995 Statutes, is amended to read:
996 626.884 Maintenance of records by administrator; access;
997 confidentiality.—
998 (3) The insurer shall retain the right of continuing access
999 to books and records maintained by the administrator sufficient
1000 to permit the insurer to fulfill all of its contractual
1001 obligations to insured persons, subject to any restrictions in
1002 the written agreement pertaining to between the insurer and the
1003 administrator on the proprietary rights of the parties in such
1004 books and records.
1005 Section 21. Subsections (1) and (2) of section 626.89,
1006 Florida Statutes, are amended to read:
1007 626.89 Annual financial statement and filing fee; notice of
1008 change of ownership.—
1009 (1) Each authorized administrator shall file with the
1010 office a full and true statement of its financial condition,
1011 transactions, and affairs. The statement shall be filed annually
1012 on or before April March 1 or within such extension of time
1013 therefor as the office for good cause may have granted and shall
1014 be for the preceding calendar year or fiscal year, if the
1015 administrator’s accounting is on a fiscal year basis. The
1016 statement shall be in such form and contain such matters as the
1017 commission prescribes and shall be verified by at least two
1018 officers of such administrator. An administrator whose sole
1019 stockholder is an association representing health care providers
1020 which is not an affiliate of an insurer, an administrator of a
1021 pooled governmental self-insurance program, or an administrator
1022 that is a university may submit the preceding fiscal year’s
1023 statement within 2 months after its fiscal year end.
1024 (2) Each authorized administrator shall also file an
1025 audited financial statement performed by an independent
1026 certified public accountant. The audited financial statement
1027 shall be filed with the office on or before July June 1 for the
1028 preceding calendar or fiscal year ending December 31. An
1029 administrator whose sole stockholder is an association
1030 representing health care providers which is not an affiliate of
1031 an insurer, an administrator of a pooled governmental self
1032 insurance program, or an administrator that is a university may
1033 submit the preceding fiscal year’s audited financial statement
1034 within 5 months after the end of its fiscal year. An audited
1035 financial statement prepared on a consolidated basis must
1036 include a columnar consolidating or combining worksheet that
1037 must be filed with the statement and must comply with the
1038 following:
1039 (a) Amounts shown on the consolidated audited financial
1040 statement must be shown on the worksheet;
1041 (b) Amounts for each entity must be stated separately; and
1042 (c) Explanations of consolidating and eliminating entries
1043 must be included.
1044 Section 22. Section 626.931, Florida Statutes, is amended
1045 to read:
1046 626.931 Agent affidavit and Insurer reporting
1047 requirements.—
1048 (1) Each surplus lines agent shall on or before the 45th
1049 day following each calendar quarter file with the Florida
1050 Surplus Lines Service Office an affidavit, on forms as
1051 prescribed and furnished by the Florida Surplus Lines Service
1052 Office, stating that all surplus lines insurance transacted by
1053 him or her during such calendar quarter has been submitted to
1054 the Florida Surplus Lines Service Office as required.
1055 (2) The affidavit of the surplus lines agent shall include
1056 efforts made to place coverages with authorized insurers and the
1057 results thereof.
1058 (1)(3) Each foreign insurer accepting premiums shall, on or
1059 before the end of the month following each calendar quarter,
1060 file with the Florida Surplus Lines Service Office a verified
1061 report of all surplus lines insurance transacted by such insurer
1062 for insurance risks located in this state during such calendar
1063 quarter.
1064 (2)(4) Each alien insurer accepting premiums shall, on or
1065 before June 30 of each year, file with the Florida Surplus Lines
1066 Service Office a verified report of all surplus lines insurance
1067 transacted by such insurer for insurance risks located in this
1068 state during the preceding calendar year.
1069 (3)(5) The department may waive the filing requirements
1070 described in subsections (1) (3) and (2) (4).
1071 (4)(6) Each insurer’s report and supporting information
1072 shall be in a computer-readable format as determined by the
1073 Florida Surplus Lines Service Office or shall be submitted on
1074 forms prescribed by the Florida Surplus Lines Service Office and
1075 shall show for each applicable agent:
1076 (a) A listing of all policies, certificates, cover notes,
1077 or other forms of confirmation of insurance coverage or any
1078 substitutions thereof or endorsements thereto and the
1079 identifying number; and
1080 (b) Any additional information required by the department
1081 or Florida Surplus Lines Service Office.
1082 Section 23. Paragraph (a) of subsection (2) of section
1083 626.932, Florida Statutes, is amended to read:
1084 626.932 Surplus lines tax.—
1085 (2)(a) The surplus lines agent shall make payable to the
1086 department the tax related to each calendar quarter’s business
1087 as reported to the Florida Surplus Lines Service Office, and
1088 remit the tax to the Florida Surplus Lines Service Office on or
1089 before the 45th day following each calendar quarter at the same
1090 time as provided for the filing of the quarterly affidavit,
1091 under s. 626.931. The Florida Surplus Lines Service Office shall
1092 forward to the department the taxes and any interest collected
1093 pursuant to paragraph (b), within 10 days after of receipt.
1094 Section 24. Subsection (1) of section 626.935, Florida
1095 Statutes, is amended to read:
1096 626.935 Suspension, revocation, or refusal of surplus lines
1097 agent’s license.—
1098 (1) The department shall deny an application for, suspend,
1099 revoke, or refuse to renew the appointment of a surplus lines
1100 agent and all other licenses and appointments held by the
1101 licensee under this code, on any of the following grounds:
1102 (a) Removal of the licensee’s office from the licensee’s
1103 state of residence.
1104 (b) Removal of the accounts and records of his or her
1105 surplus lines business from this state or the licensee’s state
1106 of residence during the period when such accounts and records
1107 are required to be maintained under s. 626.930.
1108 (c) Closure of the licensee’s office for more than 30
1109 consecutive days.
1110 (d) Failure to make and file his or her affidavit or
1111 reports when due as required by s. 626.931.
1112 (d)(e) Failure to pay the tax or service fee on surplus
1113 lines premiums, as provided in the Surplus Lines Law.
1114 (e)(f) Suspension, revocation, or refusal to renew or
1115 continue the license or appointment as a general lines agent,
1116 service representative, or managing general agent.
1117 (f)(g) Lack of qualifications as for an original surplus
1118 lines agent’s license.
1119 (g)(h) Violation of this Surplus Lines Law.
1120 (h)(i) For any other applicable cause for which the license
1121 of a general lines agent could be suspended, revoked, or refused
1122 under s. 626.611 or s. 626.621.
1123 Section 25. Subsection (1) of section 626.936, Florida
1124 Statutes, is amended to read:
1125 626.936 Failure to file reports or pay tax or service fee;
1126 administrative penalty.—
1127 (1) A Any licensed surplus lines agent who neglects to file
1128 a report or an affidavit in the form and within the time
1129 required or provided for in the Surplus Lines Law may be fined
1130 up to $50 per day for each day the neglect continues, beginning
1131 the day after the report or affidavit was due until the date the
1132 report or affidavit is received. All sums collected under this
1133 section shall be deposited into the Insurance Regulatory Trust
1134 Fund.
1135 Section 26. Paragraph (b) of subsection (2) of section
1136 627.062, Florida Statutes, is amended to read:
1137 627.062 Rate standards.—
1138 (2) As to all such classes of insurance:
1139 (b) Upon receiving a rate filing, the office shall review
1140 the filing to determine if a rate is excessive, inadequate, or
1141 unfairly discriminatory. In making that determination, the
1142 office shall, in accordance with generally accepted and
1143 reasonable actuarial techniques, consider the following factors:
1144 1. Past and prospective loss experience within and without
1145 this state.
1146 2. Past and prospective expenses.
1147 3. The degree of competition among insurers for the risk
1148 insured.
1149 4. Investment income reasonably expected by the insurer,
1150 consistent with the insurer’s investment practices, from
1151 investable premiums anticipated in the filing, plus any other
1152 expected income from currently invested assets representing the
1153 amount expected on unearned premium reserves and loss reserves.
1154 The commission may adopt rules using reasonable techniques of
1155 actuarial science and economics to specify the manner in which
1156 insurers calculate investment income attributable to classes of
1157 insurance written in this state and the manner in which
1158 investment income is used to calculate insurance rates. Such
1159 manner must contemplate allowances for an underwriting profit
1160 factor and full consideration of investment income which produce
1161 a reasonable rate of return; however, investment income from
1162 invested surplus may not be considered.
1163 5. The reasonableness of the judgment reflected in the
1164 filing.
1165 6. Dividends, savings, or unabsorbed premium deposits
1166 allowed or returned to Florida policyholders, members, or
1167 subscribers.
1168 7. The adequacy of loss reserves.
1169 8. The cost of reinsurance. The office may not disapprove a
1170 rate as excessive solely due to the insurer having obtained
1171 catastrophic reinsurance to cover the insurer’s estimated 250
1172 year probable maximum loss or any lower level of loss.
1173 9. Trend factors, including trends in actual losses per
1174 insured unit for the insurer making the filing.
1175 10. Conflagration and catastrophe hazards, if applicable.
1176 11. Projected hurricane losses, if applicable, which must
1177 be estimated using a model or method, or a straight average of
1178 model results or output ranges, independently found to be
1179 acceptable or reliable by the Florida Commission on Hurricane
1180 Loss Projection Methodology, and as further provided in s.
1181 627.0628.
1182 12. A reasonable margin for underwriting profit and
1183 contingencies.
1184 13. The cost of medical services, if applicable.
1185 14. Other relevant factors that affect the frequency or
1186 severity of claims or expenses.
1187 Section 27. Paragraph (d) of subsection (3) of section
1188 627.0628, Florida Statutes, is amended to read:
1189 627.0628 Florida Commission on Hurricane Loss Projection
1190 Methodology; public records exemption; public meetings
1191 exemption.—
1192 (3) ADOPTION AND EFFECT OF STANDARDS AND GUIDELINES.—
1193 (d) With respect to a rate filing under s. 627.062, an
1194 insurer shall employ and may not modify or adjust actuarial
1195 methods, principles, standards, models, or output ranges found
1196 by the commission to be accurate or reliable in determining
1197 hurricane loss factors for use in a rate filing under s.
1198 627.062. An insurer shall employ and may not modify or adjust
1199 models found by the commission to be accurate or reliable in
1200 determining probable maximum loss levels pursuant to paragraph
1201 (b) with respect to a rate filing under s. 627.062 made more
1202 than 180 60 days after the commission has made such findings.
1203 This paragraph does not prohibit an insurer from using a
1204 straight average of model results or output ranges or using
1205 straight averages for the purposes of a rate filing under s.
1206 627.062.
1207 Section 28. Present subsections (2) through (4) of section
1208 627.072, Florida Statutes, are renumbered as subsections (3)
1209 through (5), respectively, and a new subsection (2) is added to
1210 that section, to read:
1211 627.072 Making and use of rates.—
1212 (2) A retrospective rating plan may contain a provision
1213 that allows negotiation between the employer and the insurer to
1214 determine the retrospective rating factors used to calculate the
1215 premium for employers that have exposure in more than one state,
1216 an estimated annual standard premium in this state of $175,000,
1217 and an estimated annual countrywide standard premium of $1
1218 million or more for workers’ compensation.
1219 Section 29. Subsection (2) of section 627.281, Florida
1220 Statutes, is amended to read:
1221 627.281 Appeal from rating organization; workers’
1222 compensation and employer’s liability insurance filings.—
1223 (2) If such appeal is based upon the failure of the rating
1224 organization to make a filing on behalf of such member or
1225 subscriber which is based on a system of expense provisions
1226 which differs, in accordance with the right granted in s.
1227 627.072(3) 627.072(2), from the system of expense provisions
1228 included in a filing made by the rating organization, the office
1229 shall, if it grants the appeal, order the rating organization to
1230 make the requested filing for use by the appellant. In deciding
1231 such appeal, the office shall apply the applicable standards set
1232 forth in ss. 627.062 and 627.072.
1233 Section 30. Paragraphs (gg), (hh), and (ii) are added to
1234 subsection (6) of section 627.351, Florida Statutes, to read:
1235 627.351 Insurance risk apportionment plans.—
1236 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
1237 (gg) At least once every 6 months, the corporation shall
1238 submit a report to the office and the Insurance Consumer
1239 Advocate disclosing:
1240 1. The total number of requests received for residential
1241 sinkhole loss coverage;
1242 2. The total number of policies issued for residential
1243 sinkhole loss coverage;
1244 3. The total number of requests declined for residential
1245 sinkhole loss coverage; and
1246 4. The reasons for declining the requests for residential
1247 sinkhole loss coverage.
1248 (hh) The Legislature finds that it is in the public
1249 interest that sinkhole loss claims are resolved by stabilizing
1250 the land and structure and making repairs to the foundation of
1251 the damaged structure. Therefore, a Citizens Sinkhole
1252 Stabilization Repair Program is established by the corporation.
1253 By March 31, 2014, any claim against a corporation policy that
1254 covers residential sinkhole loss for which it is determined that
1255 such loss has occurred must be included in and governed by the
1256 repair program for the purpose of stabilizing the land and
1257 structure and making repairs to the foundation.
1258 1. As used in this paragraph, the terms:
1259 a. “Engineering report” means the report issued pursuant to
1260 s. 627.7073(1).
1261 b. “Recommendation of the engineer” means the
1262 recommendation of the engineer engaged by the corporation
1263 pursuant to s. 627.7073(1)(a)5.
1264 c. “Stabilization repairs” means stabilizing the land and
1265 structure and making repairs to the foundation.
1266 d. “Stabilization repair contractor” means a contractor who
1267 stabilizes the land and structure and makes repairs to the
1268 foundation of the damaged structure.
1269 2. The repair program may be managed by the corporation or
1270 a third-party administrator and, at a minimum, must include the
1271 following components:
1272 a. The corporation may not require the policyholder to
1273 advance payment for repairs.
1274 b. Stabilization repairs shall be conducted by
1275 stabilization repair contractors selected from an approved
1276 stabilization repair contractor pool procured by the corporation
1277 pursuant to an open and transparent process. Each stabilization
1278 repair contractor within the pool must be qualified and approved
1279 by the corporation based upon criteria including the following
1280 minimum requirements:
1281 (I) The stabilization repair contractor must be certified
1282 as a contractor pursuant s. 489.113(1).
1283 (II) The stabilization repair contractor corporate entity
1284 must demonstrate experience in stabilization of sinkhole
1285 activity pursuant to requirements to be established by the
1286 corporation.
1287 (III) The stabilization repair contractor must demonstrate
1288 capacity to be bonded and provide performance, surety, or other
1289 bonds as described in this section which may be supplemented by
1290 additional requirements as determined by the corporation.
1291 (IV) The stabilization repair contractor must demonstrate
1292 insurance coverage requirements, including, but not limited to,
1293 commercial general liability coverage and workers’ compensation,
1294 to be established by the corporation.
1295 (V) The stabilization repair contractor must maintain a
1296 valid drug-free workplace program.
1297 (VI) Such other requirements as established by the
1298 corporation.
1299 c. Pursuant to the stabilization repair program, qualified
1300 stabilization repair contractors shall be selected from the
1301 approved stabilization repair contractor pool to stabilize the
1302 land and structure and repair the foundation of the damaged
1303 structure pursuant to a fixed-price contract between the
1304 contractor and the corporation. Such contracts are not subject
1305 to paragraph (6)(e) or s. 287.057. Pursuant to the terms of the
1306 contract, the selected stabilization repair contractor is solely
1307 responsible for the performance of all necessary stabilization
1308 repairs specified in the engineering report and recommendations
1309 of the engineer.
1310 d. The corporation shall develop a standard stabilization
1311 repair contract for the purpose of stabilizing the land and
1312 structure and repairing the foundation of all properties within
1313 the program. The contract must include the following minimum
1314 requirements:
1315 (I) The assigned stabilization repair contractor must agree
1316 to make all stabilization repairs identified in the engineering
1317 report based upon a fixed price.
1318 (II) Each stabilization repair contractor must post a
1319 payment bond in favor of the corporation as obligee for each
1320 project assigned and must post a performance bond, secured by a
1321 third-party surety, in favor of the corporation as obligee, in a
1322 principal amount equal to the total cost of all fixed-price
1323 contracts annually awarded to that contractor.
1324 (III) In addition to the required performance bond, each
1325 stabilization repair contractor must also provide a warranty,
1326 secured by a third-party surety, to the policyholder which
1327 covers all repairs provided by the stabilization repair
1328 contractor for at least 5 years after completion of the
1329 stabilization repairs.
1330 (IV) Throughout the course of the stabilization repairs
1331 performed by the contractor, the engineer shall monitor the
1332 property and confirm that stabilization has been satisfactorily
1333 completed and that no further stabilization is necessary to
1334 remedy the damage identified in the engineering report and
1335 recommendation of the engineer.
1336 (V) If the engineer concludes that additional stabilization
1337 repair is necessary to complete the repairs specified in the
1338 engineering report and recommendations of the engineer, the
1339 stabilization repair contractor must perform the additional
1340 stabilization repairs at no cost to the corporation or the
1341 policyholder. The contract between the corporation and the
1342 contractor must contain provisions specifying the remedy and
1343 sanctions for failing to perform such additional repairs.
1344 e. The corporation shall enter into contracts to perform
1345 repairs pursuant to a process that includes, but is not limited
1346 to, the following requirements:
1347 (I) Within 30 days after the completion of the engineering
1348 report, the report shall be identified on a list which shall be
1349 made available to all stabilization contractors.
1350 (II) The corporation shall establish a selection process
1351 for assigning stabilization repair contractors to perform
1352 repairs for each property within the program. The selection
1353 process must include:
1354 (A) All stabilization repair contractors within the
1355 stabilization repair contractor pool shall be provided with an
1356 opportunity to submit an offer, that includes an itemized
1357 statement of work, to perform the stabilization repairs
1358 recommended in the engineering report.
1359 (B) The corporation shall review the offers and provide the
1360 policyholder with a list of stabilization repair contractors
1361 from which the policyholder shall be provided a reasonable time,
1362 not to exceed 30 days, to participate in the selection by
1363 choosing the stabilization repair contractor from among those
1364 qualified contractors on the list provided by the corporation.
1365 (C) If the policyholder has not made such a selection
1366 within the 30-day period described herein, the corporation may
1367 make the selection.
1368 (D) The corporation may reserve the right to include any or
1369 all contractors on the list provided to the policyholder based
1370 upon quality, cost-effectiveness, and such other criteria as the
1371 corporation shall determine.
1372 (III) If no stabilization repair contractor submits an
1373 offer to perform the stabilization repairs for a property within
1374 the program or all offers are above the policyholder’s policy
1375 limit, the corporation may enter the property into the selection
1376 process again or the corporation may pay the policyholder an
1377 amount up to the policy limits on the structure.
1378 f. The corporation is not responsible for serving as a
1379 stabilization repair contractor. The corporation’s obligations
1380 pursuant to the repair program are not an election to repair by
1381 the corporation and therefore do not imply or result in a new
1382 contractual relationship with the policyholder.
1383 g. The corporation’s liability related to repair activity,
1384 including stabilization repairs pursuant to the sinkhole
1385 stabilization program and all other repairs to the structure in
1386 accordance with the terms of the policy, is no greater than the
1387 policy limits on the structure.
1388 h. This section does not prohibit the corporation from
1389 establishing a managed repair program for other repairs to the
1390 structure in accordance with the terms of the policy.
1391 i. If a dispute arises between the corporation and the
1392 policyholder as to the nature or extent of stabilization repairs
1393 to be conducted under the program, the sole remedy for resolving
1394 such disputes shall be specific performance.
1395 j. This section supersedes s. 627.707(5), except for
1396 paragraph (5)(e).
1397 3. The corporation shall pay for other repairs to the
1398 structure and contents in accordance with the terms of the
1399 policy.
1400 (ii) A policy for residential property insurance issued by
1401 the corporation must include a deductible amount applicable to
1402 sinkhole losses, offered in amounts equal to 2 percent, 5
1403 percent, and 10 percent of the policy dwelling limits, with
1404 appropriate premium discounts offered with each deductible
1405 amount.
1406 Section 31. Section 627.3519, Florida Statutes, is amended
1407 to read:
1408 627.3519 Annual report of aggregate net probable maximum
1409 losses, financing options, and potential assessments.—No later
1410 than February 1 of each year, the Florida Hurricane Catastrophe
1411 Fund and Citizens Property Insurance Corporation Financial
1412 Services Commission shall provide to the Legislature and the
1413 Financial Services Commission a report of their respective the
1414 aggregate net probable maximum losses, financing options, and
1415 potential assessments of the Florida Hurricane Catastrophe Fund
1416 and Citizens Property Insurance Corporation. The report of the
1417 fund and the corporation must include their the respective 50
1418 year, 100-year, and 250-year probable maximum losses of the fund
1419 and the corporation; analysis of all reasonable financing
1420 strategies for each such probable maximum loss, including the
1421 amount and term of debt instruments; specification of the
1422 percentage assessments that would be needed to support each of
1423 the financing strategies; and calculations of the aggregate
1424 assessment burden on Florida property and casualty policyholders
1425 for each of the probable maximum losses. The commission shall
1426 require the fund and the corporation to provide the commission
1427 with such data and analysis as the commission considers
1428 necessary to prepare the report.
1429 Section 32. Paragraph (b) of subsection (2) of section
1430 627.4133, Florida Statutes, is amended to read:
1431 627.4133 Notice of cancellation, nonrenewal, or renewal
1432 premium.—
1433 (2) With respect to any personal lines or commercial
1434 residential property insurance policy, including, but not
1435 limited to, any homeowner’s, mobile home owner’s, farmowner’s,
1436 condominium association, condominium unit owner’s, apartment
1437 building, or other policy covering a residential structure or
1438 its contents:
1439 (b) The insurer shall give the first-named insured written
1440 notice of nonrenewal, cancellation, or termination at least 120
1441 100 days before the effective date of the nonrenewal,
1442 cancellation, or termination. However, the insurer shall give at
1443 least 100 days’ written notice, or written notice by June 1,
1444 whichever is earlier, for any nonrenewal, cancellation, or
1445 termination that would be effective between June 1 and November
1446 30. The notice must include the reason or reasons for the
1447 nonrenewal, cancellation, or termination, except that:
1448 1. The insurer shall give the first-named insured written
1449 notice of nonrenewal, cancellation, or termination at least 120
1450 days prior to the effective date of the nonrenewal,
1451 cancellation, or termination for a first-named insured whose
1452 residential structure has been insured by that insurer or an
1453 affiliated insurer for at least a 5-year period immediately
1454 prior to the date of the written notice.
1455 1.2. If cancellation is for nonpayment of premium, at least
1456 10 days’ written notice of cancellation accompanied by the
1457 reason therefor must be given. As used in this subparagraph, the
1458 term “nonpayment of premium” means failure of the named insured
1459 to discharge when due her or his obligations for in connection
1460 with the payment of premiums on a policy or an any installment
1461 of such premium, whether the premium is payable directly to the
1462 insurer or its agent or indirectly under a any premium finance
1463 plan or extension of credit, or failure to maintain membership
1464 in an organization if such membership is a condition precedent
1465 to insurance coverage. The term also means the failure of a
1466 financial institution to honor an insurance applicant’s check
1467 after delivery to a licensed agent for payment of a premium,
1468 even if the agent has previously delivered or transferred the
1469 premium to the insurer. If a dishonored check represents the
1470 initial premium payment, the contract and all contractual
1471 obligations are void ab initio unless the nonpayment is cured
1472 within the earlier of 5 days after actual notice by certified
1473 mail is received by the applicant or 15 days after notice is
1474 sent to the applicant by certified mail or registered mail., and
1475 If the contract is void, any premium received by the insurer
1476 from a third party must be refunded to that party in full.
1477 2.3. If such cancellation or termination occurs during the
1478 first 90 days the insurance is in force and the insurance is
1479 canceled or terminated for reasons other than nonpayment of
1480 premium, at least 20 days’ written notice of cancellation or
1481 termination accompanied by the reason therefor must be given
1482 unless there has been a material misstatement or
1483 misrepresentation or failure to comply with the underwriting
1484 requirements established by the insurer.
1485 3. After the policy has been in effect for 90 days, the
1486 policy may not be canceled by the insurer unless there has been
1487 a material misstatement, a nonpayment of premium, a failure to
1488 comply with underwriting requirements established by the insurer
1489 within 90 days after the date of effectuation of coverage, a
1490 substantial change in the risk covered by the policy, or the
1491 cancellation is for all insureds under such policies for a given
1492 class of insureds. This subparagraph does not apply to
1493 individually rated risks having a policy term of less than 90
1494 days.
1495 4. The requirement for providing written notice by June 1
1496 of any nonrenewal that would be effective between June 1 and
1497 November 30 does not apply to the following situations, but the
1498 insurer remains subject to the requirement to provide such
1499 notice at least 100 days before the effective date of
1500 nonrenewal:
1501 a. A policy that is nonrenewed due to a revision in the
1502 coverage for sinkhole losses and catastrophic ground cover
1503 collapse pursuant to s. 627.706.
1504 4.b. A policy that is nonrenewed by Citizens Property
1505 Insurance Corporation, pursuant to s. 627.351(6), for a policy
1506 that has been assumed by an authorized insurer offering
1507 replacement coverage to the policyholder is exempt from the
1508 notice requirements of paragraph (a) and this paragraph. In such
1509 cases, the corporation must give the named insured written
1510 notice of nonrenewal at least 45 days before the effective date
1511 of the nonrenewal.
1512
1513 After the policy has been in effect for 90 days, the policy may
1514 not be canceled by the insurer unless there has been a material
1515 misstatement, a nonpayment of premium, a failure to comply with
1516 underwriting requirements established by the insurer within 90
1517 days after the date of effectuation of coverage, or a
1518 substantial change in the risk covered by the policy or if the
1519 cancellation is for all insureds under such policies for a given
1520 class of insureds. This paragraph does not apply to individually
1521 rated risks having a policy term of less than 90 days.
1522 5. Notwithstanding any other provision of law, an insurer
1523 may cancel or nonrenew a property insurance policy after at
1524 least 45 days’ notice if the office finds that the early
1525 cancellation of some or all of the insurer’s policies is
1526 necessary to protect the best interests of the public or
1527 policyholders and the office approves the insurer’s plan for
1528 early cancellation or nonrenewal of some or all of its policies.
1529 The office may base such finding upon the financial condition of
1530 the insurer, lack of adequate reinsurance coverage for hurricane
1531 risk, or other relevant factors. The office may condition its
1532 finding on the consent of the insurer to be placed under
1533 administrative supervision pursuant to s. 624.81 or to the
1534 appointment of a receiver under chapter 631.
1535 6. A policy covering both a home and motor vehicle may be
1536 nonrenewed for any reason applicable to either the property or
1537 motor vehicle insurance after providing 90 days’ notice.
1538 Section 33. Subsection (1) of section 627.4137, Florida
1539 Statutes, is amended to read:
1540 627.4137 Disclosure of certain information required.—
1541 (1) Each insurer that provides which does or may provide
1542 liability insurance coverage to pay all or a portion of a any
1543 claim that which might be made shall provide, within 30 days
1544 after of the written request of the claimant, a statement, under
1545 oath, of a corporate officer or the insurer’s claims manager, or
1546 superintendent, or licensed company adjuster setting forth the
1547 following information with regard to each known policy of
1548 insurance, including excess or umbrella insurance:
1549 (a) The name of the insurer.
1550 (b) The name of each insured.
1551 (c) The limits of the liability coverage.
1552 (d) A statement of any policy or coverage defense that the
1553 which such insurer reasonably believes is available to the such
1554 insurer at the time of filing such statement.
1555 (e) A copy of the policy.
1556
1557 In addition, the insured, or her or his insurance agent, upon
1558 written request of the claimant or the claimant’s attorney,
1559 shall disclose the name and coverage of each known insurer to
1560 the claimant and shall forward such request for information as
1561 required by this subsection to all affected insurers. The
1562 insurer shall then supply the information required in this
1563 subsection to the claimant within 30 days after of receipt of
1564 such request.
1565 Section 34. Subsection (1) of section 627.421, Florida
1566 Statutes, is amended to read:
1567 627.421 Delivery of policy.—
1568 (1) Subject to the insurer’s requirement as to payment of
1569 premium, every policy shall be mailed or delivered to the
1570 insured or to the person entitled thereto not later than 60 days
1571 after the effectuation of coverage. Notwithstanding any other
1572 provision of law, an insurer may allow a policyholder of
1573 personal lines insurance to affirmatively elect delivery of the
1574 policy documents, including, but not limited to, policies,
1575 endorsements, notices, or documents, by electronic means in lieu
1576 of delivery by mail.
1577 Section 35. Subsection (2) of section 627.43141, Florida
1578 Statutes, is amended to read:
1579 627.43141 Notice of change in policy terms.—
1580 (2) A renewal policy may contain a change in policy terms.
1581 If a renewal policy contains does contain such change, the
1582 insurer must give the named insured written notice of the
1583 change, which may either must be enclosed along with the written
1584 notice of renewal premium required by ss. 627.4133 and 627.728
1585 or sent in a separate notice that complies with the nonrenewal
1586 mailing time requirement for that particular line of business.
1587 The insurer must also provide a sample copy of the notice to the
1588 insured’s insurance agent before or at the same time that notice
1589 is given to the insured. Such notice shall be entitled “Notice
1590 of Change in Policy Terms.”
1591 Section 36. Section 627.6484, Florida Statutes, is amended
1592 to read:
1593 627.6484 Dissolution of association; termination of
1594 enrollment; availability of other coverage.—
1595 (1) The association shall accept applications for insurance
1596 only until June 30, 1991, after which date no further
1597 applications may be accepted. Upon receipt of an application for
1598 insurance, the association shall issue coverage for an eligible
1599 applicant. When appropriate, the administrator shall forward a
1600 copy of the application to a market assistance plan created by
1601 the office, which shall conduct a diligent search of the private
1602 marketplace for a carrier willing to accept the application.
1603 (2) Coverage for each policyholder of the association
1604 terminates at midnight, June 30, 2014, or on the date that
1605 health insurance coverage is effective with another insurer,
1606 whichever occurs first, and such coverage may not be renewed.
1607 (3) The association shall provide assistance to each
1608 policyholder concerning how to obtain health insurance coverage.
1609 Such assistance must include:
1610 (a) The identification of insurers and health maintenance
1611 organizations offering coverage in the individual market,
1612 including coverage inside and outside of the Health Insurance
1613 Exchange;
1614 (b) A basic explanation of the levels of coverage
1615 available; and
1616 (c) Specific information relating to local and online
1617 sources from which a policyholder may obtain detailed policy and
1618 premium comparisons and directly obtain coverage.
1619 (4) The association shall provide written notice to all
1620 policyholders by September 1, 2013, which informs each
1621 policyholder with respect to:
1622 (a) The date that coverage with the association is
1623 terminated and that such coverage may not be renewed.
1624 (b) The opportunity for the policyholder to obtain
1625 individual health insurance coverage on a guaranteed-issue
1626 basis, regardless of policyholder’s health status, from a health
1627 insurer or health maintenance organization that offers coverage
1628 in the individual market, including the dates of open enrollment
1629 periods for obtaining such coverage.
1630 (c) How to access coverage through the Health Insurance
1631 Exchange established for this state pursuant to the Patient
1632 Protection and Affordable Care Act and the potential for
1633 obtaining reduced premiums and cost-sharing provisions depending
1634 on the policyholder’s family income level.
1635 (d) Contact information for a representative of the
1636 association who is able to provide additional information about
1637 obtaining individual health insurance coverage both inside and
1638 outside of the Health Insurance Exchange.
1639 (5) After termination of coverage, the association must
1640 continue to receive and process timely submitted claims in
1641 accordance with the laws of this state.
1642 (6) By March 15, 2015, the association shall determine the
1643 final assessment to be collected from insurers for funding
1644 claims and administrative expenses of the association or, if
1645 surplus funds remain, shall determine the refund amount to be
1646 provided to each insurer based on the same pro rata formula used
1647 for determining each insurer’s assessment.
1648 (7) By September 1, 2015, the board must:
1649 (a) Complete performance of all program responsibilities.
1650 (b) Sell or otherwise dispose of all physical assets of the
1651 association.
1652 (c) Make a final accounting of the finances of the
1653 association.
1654 (d) Transfer all records to the Department of Financial
1655 Services, which shall serve as custodian of such records.
1656 (e) Execute a legal dissolution of the association and
1657 report such action to the Chief Financial Officer, the Insurance
1658 Commissioner, the President of the Senate, and the Speaker of
1659 the House of Representatives.
1660 (2) The office shall, after consultation with the health
1661 insurers licensed in this state, adopt a market assistance plan
1662 to assist in the placement of risks of Florida Comprehensive
1663 Health Association applicants. All health insurers and health
1664 maintenance organizations licensed in this state shall
1665 participate in the plan.
1666 (3) Guidelines for the use of such program shall be a part
1667 of the association’s plan of operation. The guidelines shall
1668 describe which types of applications are to be exempt from
1669 submission to the market assistance plan. An exemption shall be
1670 based upon a determination that due to a specific health
1671 condition an applicant is ineligible for coverage in the
1672 standard market. The guidelines shall also describe how the
1673 market assistance plan is to be conducted, and how the periodic
1674 reviews to depopulate the association are to be conducted.
1675 (4) If a carrier is found through the market assistance
1676 plan, the individual shall apply to that company. If the
1677 individual’s application is accepted, association coverage shall
1678 terminate upon the effective date of the coverage with the
1679 private carrier. For the purpose of applying a preexisting
1680 condition limitation or exclusion, any carrier accepting a risk
1681 pursuant to this section shall provide coverage as if it began
1682 on the date coverage was effectuated on behalf of the
1683 association, and shall be indemnified by the association for
1684 claims costs incurred as a result of utilizing such effective
1685 date.
1686 (5) The association shall establish a policyholder
1687 assistance program by July 1, 1991, to assist in placing
1688 eligible policyholders in other coverage programs, including
1689 Medicare and Medicaid.
1690 Section 37. Section 627.64872, Florida Statutes, is
1691 repealed.
1692 Section 38. Effective October 1, 2015, sections 627.648,
1693 627.6482, 627.6484, 627.6486, 627.6488, 627.6489, 627.649,
1694 627.6492, 627.6494, 627.6496, 627.6498, and 627.6499, Florida
1695 Statutes, are repealed.
1696 Section 39. Paragraph (b) of subsection (4) of section
1697 627.7015, Florida Statutes, is amended to read:
1698 627.7015 Alternative procedure for resolution of disputed
1699 property insurance claims.—
1700 (4) The department shall adopt by rule a property insurance
1701 mediation program to be administered by the department or its
1702 designee. The department may also adopt special rules which are
1703 applicable in cases of an emergency within the state. The rules
1704 shall be modeled after practices and procedures set forth in
1705 mediation rules of procedure adopted by the Supreme Court. The
1706 rules shall provide for:
1707 (b) Qualifications, denial of application, suspension,
1708 revocation, and other penalties for of mediators as provided in
1709 s. 627.745 and in the Florida Rules of Certified and Court
1710 Appointed Mediators, and for such other individuals as are
1711 qualified by education, training, or experience as the
1712 department determines to be appropriate.
1713 Section 40. Section 627.70151, Florida Statutes, is created
1714 to read:
1715 627.70151 Appraisal; conflicts of interest.—An insurer that
1716 offers residential coverage, as defined in s. 627.4025, or a
1717 policyholder that uses an appraisal clause in the property
1718 insurance contract to establish a process of estimating or
1719 evaluating the amount of the loss through the use of an
1720 impartial umpire may challenge the umpire’s impartiality and
1721 disqualify the proposed umpire only if:
1722 (1) A familial relationship within the third degree exists
1723 between the umpire and any party or a representative of any
1724 party;
1725 (2) The umpire has previously represented any party or a
1726 representative of any party in a professional capacity in the
1727 same or a substantially related matter;
1728 (3) The umpire has represented another person in a
1729 professional capacity on the same or a substantially related
1730 matter, which includes the claim, same property, or an adjacent
1731 property and that other person’s interests are materially
1732 adverse to the interests of any party; or
1733 (4) The umpire has worked as an employer or employee of any
1734 party within the preceding 5 years.
1735 Section 41. Paragraph (c) of subsection (2) of section
1736 627.706, Florida Statutes, is amended to read:
1737 627.706 Sinkhole insurance; catastrophic ground cover
1738 collapse; definitions.—
1739 (2) As used in ss. 627.706-627.7074, and as used in
1740 connection with any policy providing coverage for a catastrophic
1741 ground cover collapse or for sinkhole losses, the term:
1742 (c) “Neutral evaluator” means a professional engineer or a
1743 professional geologist who has completed a course of study in
1744 alternative dispute resolution designed or approved by the
1745 department for use in the neutral evaluation process, and who is
1746 determined by the department to be fair and impartial, and who
1747 is not otherwise ineligible for certification as provided in s.
1748 627.7074.
1749 Section 42. Subsection (1) of section 627.7074, Florida
1750 Statutes, is amended to read:
1751 627.7074 Alternative procedure for resolution of disputed
1752 sinkhole insurance claims.—
1753 (1) The department shall:
1754 (a) Certify and maintain a list of persons who are neutral
1755 evaluators.
1756 (b) Adopt rules for certifying, denying certification,
1757 suspending certification, and revoking certification as a
1758 neutral evaluator, in keeping with qualifications specified in
1759 this section and ss. 627.706 and 627.745(4).
1760 (c)(b) Prepare a consumer information pamphlet for
1761 distribution by insurers to policyholders which clearly
1762 describes the neutral evaluation process and includes
1763 information necessary for the policyholder to request a neutral
1764 evaluation.
1765 Section 43. Paragraph (a) of subsection (5) of section
1766 627.736, Florida Statutes, is amended to read:
1767 627.736 Required personal injury protection benefits;
1768 exclusions; priority; claims.—
1769 (5) CHARGES FOR TREATMENT OF INJURED PERSONS.—
1770 (a) A physician, hospital, clinic, or other person or
1771 institution lawfully rendering treatment to an injured person
1772 for a bodily injury covered by personal injury protection
1773 insurance may charge the insurer and injured party only a
1774 reasonable amount pursuant to this section for the services and
1775 supplies rendered, and the insurer providing such coverage may
1776 pay for such charges directly to such person or institution
1777 lawfully rendering such treatment if the insured receiving such
1778 treatment or his or her guardian has countersigned the properly
1779 completed invoice, bill, or claim form approved by the office
1780 upon which such charges are to be paid for as having actually
1781 been rendered, to the best knowledge of the insured or his or
1782 her guardian. However, such a charge may not exceed the amount
1783 the person or institution customarily charges for like services
1784 or supplies. In determining whether a charge for a particular
1785 service, treatment, or otherwise is reasonable, consideration
1786 may be given to evidence of usual and customary charges and
1787 payments accepted by the provider involved in the dispute,
1788 reimbursement levels in the community and various federal and
1789 state medical fee schedules applicable to motor vehicle and
1790 other insurance coverages, and other information relevant to the
1791 reasonableness of the reimbursement for the service, treatment,
1792 or supply.
1793 1. The insurer may limit reimbursement to 80 percent of the
1794 following schedule of maximum charges:
1795 a. For emergency transport and treatment by providers
1796 licensed under chapter 401, 200 percent of Medicare.
1797 b. For emergency services and care provided by a hospital
1798 licensed under chapter 395, 75 percent of the hospital’s usual
1799 and customary charges.
1800 c. For emergency services and care as defined by s. 395.002
1801 provided in a facility licensed under chapter 395 rendered by a
1802 physician or dentist, and related hospital inpatient services
1803 rendered by a physician or dentist, the usual and customary
1804 charges in the community.
1805 d. For hospital inpatient services, other than emergency
1806 services and care, 200 percent of the Medicare Part A
1807 prospective payment applicable to the specific hospital
1808 providing the inpatient services.
1809 e. For hospital outpatient services, other than emergency
1810 services and care, 200 percent of the Medicare Part A Ambulatory
1811 Payment Classification for the specific hospital providing the
1812 outpatient services.
1813 f. For all other medical services, supplies, and care, 200
1814 percent of the allowable amount under:
1815 (I) The participating physicians fee schedule of Medicare
1816 Part B, except as provided in sub-sub-subparagraphs (II) and
1817 (III).
1818 (II) Medicare Part B, in the case of services, supplies,
1819 and care provided by ambulatory surgical centers and clinical
1820 laboratories.
1821 (III) The Durable Medical Equipment Prosthetics/Orthotics
1822 and Supplies fee schedule of Medicare Part B, in the case of
1823 durable medical equipment.
1824
1825 However, if such services, supplies, or care is not reimbursable
1826 under Medicare Part B, as provided in this sub-subparagraph, the
1827 insurer may limit reimbursement to 80 percent of the maximum
1828 reimbursable allowance under workers’ compensation, as
1829 determined under s. 440.13 and rules adopted thereunder which
1830 are in effect at the time such services, supplies, or care is
1831 provided. Services, supplies, or care that is not reimbursable
1832 under Medicare or workers’ compensation is not required to be
1833 reimbursed by the insurer.
1834 2. For purposes of subparagraph 1., the applicable fee
1835 schedule or payment limitation under Medicare is the fee
1836 schedule or payment limitation in effect on March 1 of the year
1837 in which the services, supplies, or care is rendered and for the
1838 area in which such services, supplies, or care is rendered, and
1839 the applicable fee schedule or payment limitation applies from
1840 March 1 until the last day of the following February throughout
1841 the remainder of that year, notwithstanding any subsequent
1842 change made to the fee schedule or payment limitation, except
1843 that it may not be less than the allowable amount under the
1844 applicable schedule of Medicare Part B for 2007 for medical
1845 services, supplies, and care subject to Medicare Part B.
1846 3. Subparagraph 1. does not allow the insurer to apply any
1847 limitation on the number of treatments or other utilization
1848 limits that apply under Medicare or workers’ compensation. An
1849 insurer that applies the allowable payment limitations of
1850 subparagraph 1. must reimburse a provider who lawfully provided
1851 care or treatment under the scope of his or her license,
1852 regardless of whether such provider is entitled to reimbursement
1853 under Medicare due to restrictions or limitations on the types
1854 or discipline of health care providers who may be reimbursed for
1855 particular procedures or procedure codes. However, subparagraph
1856 1. does not prohibit an insurer from using the Medicare coding
1857 policies and payment methodologies of the federal Centers for
1858 Medicare and Medicaid Services, including applicable modifiers,
1859 to determine the appropriate amount of reimbursement for medical
1860 services, supplies, or care if the coding policy or payment
1861 methodology does not constitute a utilization limit.
1862 4. If an insurer limits payment as authorized by
1863 subparagraph 1., the person providing such services, supplies,
1864 or care may not bill or attempt to collect from the insured any
1865 amount in excess of such limits, except for amounts that are not
1866 covered by the insured’s personal injury protection coverage due
1867 to the coinsurance amount or maximum policy limits.
1868 5. Effective July 1, 2012, an insurer may limit payment as
1869 authorized by this paragraph only if the insurance policy
1870 includes a notice at the time of issuance or renewal that the
1871 insurer may limit payment pursuant to the schedule of charges
1872 specified in this paragraph. A policy form approved by the
1873 office satisfies this requirement. If a provider submits a
1874 charge for an amount less than the amount allowed under
1875 subparagraph 1., the insurer may pay the amount of the charge
1876 submitted.
1877 Section 44. Subsection (3) of section 627.745, Florida
1878 Statutes, is amended, present subsections (4) and (5) of that
1879 section are renumbered as subsections (5) and (6), respectively,
1880 and a new subsection (4) is added to that section, to read:
1881 627.745 Mediation of claims.—
1882 (3)(a) The department shall approve mediators to conduct
1883 mediations pursuant to this section. All mediators must file an
1884 application under oath for approval as a mediator.
1885 (b) To qualify for approval as a mediator, an individual a
1886 person must meet one of the following qualifications:
1887 1. Possess an active certification as a Florida Circuit
1888 Court Mediator. A Florida Circuit Court Mediator in a lapsed,
1889 suspended, or decertified status is not eligible to participate
1890 in the mediation program a masters or doctorate degree in
1891 psychology, counseling, business, accounting, or economics, be a
1892 member of The Florida Bar, be licensed as a certified public
1893 accountant, or demonstrate that the applicant for approval has
1894 been actively engaged as a qualified mediator for at least 4
1895 years prior to July 1, 1990.
1896 2. Be an approved department mediator as of July 1, 2013,
1897 and have conducted at least one mediation on behalf of the
1898 department within 4 years immediately preceding that the date
1899 the application for approval is filed with the department, have
1900 completed a minimum of a 40-hour training program approved by
1901 the department and successfully passed a final examination
1902 included in the training program and approved by the department.
1903 The training program shall include and address all of the
1904 following:
1905 a. Mediation theory.
1906 b. Mediation process and techniques.
1907 c. Standards of conduct for mediators.
1908 d. Conflict management and intervention skills.
1909 e. Insurance nomenclature.
1910 (4) The department shall deny an application, or suspend or
1911 revoke its approval of a mediator or its certification of a
1912 neutral evaluator to serve in such capacity, if it finds that
1913 any of the following grounds exist:
1914 (a) Lack of one or more of the qualifications specified in
1915 this section for approval or certification.
1916 (b) Material misstatement, misrepresentation, or fraud in
1917 obtaining or attempting to obtain the approval or certification.
1918 (c) Demonstrated lack of fitness or trustworthiness to act
1919 as a mediator or neutral evaluator.
1920 (d) Fraudulent or dishonest practices in the conduct of
1921 mediation or neutral evaluation or in the conduct of business in
1922 the financial services industry.
1923 (e) Violation of any provision of this code, a lawful order
1924 or rule of the department, the Florida Rules for Certified and
1925 Court-Appointed Mediators, or aiding, instructing, or
1926 encouraging another party in committing such a violation.
1927
1928 The department may adopt rules to administer this subsection.
1929 Section 45. Subsection (4) of section 627.841, Florida
1930 Statutes, is amended to read:
1931 627.841 Delinquency, collection, cancellation, and payment
1932 check return charge charges; attorney attorney’s fees.—
1933 (4) In the event that a payment is made to a premium
1934 finance company by debit, credit, electronic funds transfer,
1935 check, or draft and such payment the instrument is returned,
1936 declined, or cannot be processed due to because of insufficient
1937 funds to pay it, the premium finance company may, if the premium
1938 finance agreement so provides, impose a return payment charge of
1939 $15.
1940 Section 46. Paragraph (b) of subsection (1) of section
1941 627.952, Florida Statutes, is amended to read:
1942 627.952 Risk retention and purchasing group agents.—
1943 (1) Any person offering, soliciting, selling, purchasing,
1944 administering, or otherwise servicing insurance contracts,
1945 certificates, or agreements for any purchasing group or risk
1946 retention group to a any resident of this state, either directly
1947 or indirectly, by the use of mail, advertising, or other means
1948 of communication, shall obtain a license and appointment to act
1949 as a resident general lines agent, if a resident of this state,
1950 or a nonresident general lines agent if not a resident. Any such
1951 person shall be subject to all requirements of the Florida
1952 Insurance Code.
1953 (b) A Any person required to be licensed and appointed
1954 under this subsection, in order to place business through
1955 Florida eligible surplus lines carriers, must, if a resident of
1956 this state, be licensed and appointed as a surplus lines agent.
1957 If not a resident of this state, such person must be licensed
1958 and appointed as a nonresident surplus lines agent in this her
1959 or his state of residence and file and maintain a fidelity bond
1960 in favor of the people of the State of Florida executed by a
1961 surety company admitted in this state and payable to the State
1962 of Florida; however, such nonresident is limited to the
1963 provision of insurance for purchasing groups. The bond must be
1964 continuous in form and in the amount of not less than $50,000,
1965 aggregate liability. The bond must remain in force and effect
1966 until the surety is released from liability by the department or
1967 until the bond is canceled by the surety. The surety may cancel
1968 the bond and be released from further liability upon 30 days’
1969 prior written notice to the department. The cancellation does
1970 not affect any liability incurred or accrued before the
1971 termination of the 30-day period. Upon receipt of a notice of
1972 cancellation, the department shall immediately notify the agent.
1973 Section 47. Subsection (6) of section 627.971, Florida
1974 Statutes, is amended to read:
1975 627.971 Definitions.—As used in this part:
1976 (6) “Financial guaranty insurance corporation” means a
1977 stock or mutual insurer licensed to transact financial guaranty
1978 insurance business in this state.
1979 Section 48. Subsection (1) of section 627.972, Florida
1980 Statutes, is amended to read:
1981 627.972 Organization; financial requirements.—
1982 (1) A financial guaranty insurance corporation must be
1983 organized and licensed in the manner prescribed in this code for
1984 stock or mutual property and casualty insurers except that:
1985 (a) A corporation organized to transact financial guaranty
1986 insurance may, subject to the provisions of this code, be
1987 licensed to transact:
1988 1. Residual value insurance, as defined by s. 624.6081;
1989 2. Surety insurance, as defined by s. 624.606;
1990 3. Credit insurance, as defined by s. 624.605(1)(i); and
1991 4. Mortgage guaranty insurance as defined in s. 635.011,
1992 provided that the provisions of chapter 635 are met.
1993 (b)1. Before Prior to the issuance of a license, a
1994 corporation must submit to the office for approval, a plan of
1995 operation detailing:
1996 a. The types and projected diversification of guaranties to
1997 be issued;
1998 b. The underwriting procedures to be followed;
1999 c. The managerial oversight methods;
2000 d. The investment policies; and
2001 e. Any Other matters prescribed by the office;
2002 2. An insurer which is writing only the types of insurance
2003 allowed under this part on July 1, 1988, and otherwise meets the
2004 requirements of this part, is exempt from the requirements of
2005 this paragraph.
2006 (c) An insurer transacting financial guaranty insurance is
2007 subject to all provisions of this code that are applicable to
2008 property and casualty insurers to the extent that those
2009 provisions are not inconsistent with this part.
2010 (d) The investments of an insurer transacting financial
2011 guaranty insurance in an any entity insured by the corporation
2012 may not exceed 2 percent of its admitted assets as of the end of
2013 the prior calendar year.
2014 (e) An insurer transacting financial guaranty insurance may
2015 only assume those lines of insurance for which it is licensed to
2016 write direct business.
2017 Section 49. Subsection (13) of section 628.901, Florida
2018 Statutes, is amended to read:
2019 628.901 Definitions.—As used in this part, the term:
2020 (13) “Qualifying reinsurer parent company” means a
2021 reinsurer that which currently holds a certificate of authority
2022 or qualifies for credit reinsurance under s. 624.610(3) and
2023 possesses, letter of eligibility or is an accredited or a
2024 satisfactory non-approved reinsurer in this state possessing a
2025 consolidated GAAP net worth of at least $500 million and a
2026 consolidated debt to total capital ratio of not greater than
2027 0.50.
2028 Section 50. Paragraph (a) of subsection (2) and paragraph
2029 (a) of subsection (3) of section 628.909, Florida Statutes, are
2030 amended to read:
2031 628.909 Applicability of other laws.—
2032 (2) The following provisions of the Florida Insurance Code
2033 apply to captive insurers who are not industrial insured captive
2034 insurers to the extent that such provisions are not inconsistent
2035 with this part:
2036 (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085,
2037 624.40851, 624.4095, 624.411, 624.425, and 624.426.
2038 (3) The following provisions of the Florida Insurance Code
2039 apply to industrial insured captive insurers to the extent that
2040 such provisions are not inconsistent with this part:
2041 (a) Chapter 624, except for ss. 624.407, 624.408, 624.4085,
2042 624.40851, 624.4095, 624.411, 624.425, 624.426, and 624.609(1).
2043 Section 51. Subsection (8) of section 634.406, Florida
2044 Statutes, is renumbered as subsection (7), and present
2045 subsections (6) and (7) of that section are amended, to read:
2046 634.406 Financial requirements.—
2047 (6) An association that which holds a license under this
2048 part and which does not hold any other license under this
2049 chapter may allow its premiums for service warranties written
2050 under this part to exceed the ratio to net assets limitations of
2051 this section if the association meets all of the following:
2052 (a) Maintains net assets of at least $750,000.
2053 (b) Utilizes a contractual liability insurance policy
2054 approved by the office which:
2055 1. Reimburses the service warranty association for 100
2056 percent of its claims liability and is issued by an insurer that
2057 maintains a policyholder surplus of at least $100 million; or
2058 2. Complies with the requirements of subsection (3) and is
2059 issued by an insurer that maintains a policyholder surplus of at
2060 least $200 million.
2061 (c) The insurer issuing the contractual liability insurance
2062 policy:
2063 1. Maintains a policyholder surplus of at least $100
2064 million.
2065 1.2. Is rated “A” or higher by A.M. Best Company or an
2066 equivalent rating by another national rating service acceptable
2067 to the office.
2068 3. Is in no way affiliated with the warranty association.
2069 2.4. In conjunction with the warranty association’s filing
2070 of the quarterly and annual reports, provides, on a form
2071 prescribed by the commission, a statement certifying the gross
2072 written premiums in force reported by the warranty association
2073 and a statement that all of the warranty association’s gross
2074 written premium in force is covered under the contractual
2075 liability policy, whether or not it has been reported.
2076 (7) A contractual liability policy must insure 100 percent
2077 of an association’s claims exposure under all of the
2078 association’s service warranty contracts, wherever written,
2079 unless all of the following are satisfied:
2080 (a) The contractual liability policy contains a clause that
2081 specifically names the service warranty contract holders as sole
2082 beneficiaries of the contractual liability policy and claims are
2083 paid directly to the person making a claim under the contract;
2084 (b) The contractual liability policy meets all other
2085 requirements of this part, including subsection (3) of this
2086 section, which are not inconsistent with this subsection;
2087 (c) The association has been in existence for at least 5
2088 years or the association is a wholly owned subsidiary of a
2089 corporation that has been in existence and has been licensed as
2090 a service warranty association in the state for at least 5
2091 years, and:
2092 1. Is listed and traded on a recognized stock exchange; is
2093 listed in NASDAQ (National Association of Security Dealers
2094 Automated Quotation system) and publicly traded in the over-the
2095 counter securities market; is required to file either of Form
2096 10-K, Form 100, or Form 20-G with the United States Securities
2097 and Exchange Commission; or has American Depository Receipts
2098 listed on a recognized stock exchange and publicly traded or is
2099 the wholly owned subsidiary of a corporation that is listed and
2100 traded on a recognized stock exchange; is listed in NASDAQ
2101 (National Association of Security Dealers Automated Quotation
2102 system) and publicly traded in the over-the-counter securities
2103 market; is required to file Form 10-K, Form 100, or Form 20-G
2104 with the United States Securities and Exchange Commission; or
2105 has American Depository Receipts listed on a recognized stock
2106 exchange and is publicly traded;
2107 2. Maintains outstanding debt obligations, if any, rated in
2108 the top four rating categories by a recognized rating service;
2109 3. Has and maintains at all times a minimum net worth of
2110 not less than $10 million as evidenced by audited financial
2111 statements prepared by an independent certified public
2112 accountant in accordance with generally accepted accounting
2113 principles and submitted to the office annually; and
2114 4. Is authorized to do business in this state; and
2115 (d) The insurer issuing the contractual liability policy:
2116 1. Maintains and has maintained for the preceding 5 years,
2117 policyholder surplus of at least $100 million and is rated “A”
2118 or higher by A.M. Best Company or has an equivalent rating by
2119 another rating company acceptable to the office;
2120 2. Holds a certificate of authority to do business in this
2121 state and is approved to write this type of coverage; and
2122 3. Acknowledges to the office quarterly that it insures all
2123 of the association’s claims exposure under contracts delivered
2124 in this state.
2125
2126 If all the preceding conditions are satisfied, then the scope of
2127 coverage under a contractual liability policy shall not be
2128 required to exceed an association’s claims exposure under
2129 service warranty contracts delivered in this state.
2130 Section 52. Except as otherwise expressly provided in this
2131 act, this act shall take effect upon becoming a law.