Florida Senate - 2019                                     SB 538
       By Senator Brandes
       24-00535A-19                                           2019538__
    1                        A bill to be entitled                      
    2         An act relating to nonadmitted insurance market
    3         reform; amending s. 626.916, F.S.; deleting a
    4         limitation on per-policy fees charged by surplus lines
    5         agents for exporting certified policies; requiring
    6         that such fees be itemized separately for the customer
    7         before purchase and enumerated in the policy; amending
    8         s. 626.931, F.S.; deleting a requirement for surplus
    9         lines agents to quarterly file a certain affidavit
   10         with the Florida Surplus Lines Service Office;
   11         amending s. 626.932, F.S.; conforming a provision to
   12         changes made by the act; revising the determination of
   13         the surplus lines tax on certain policies as of a
   14         specified date; amending ss. 626.935 and 629.401,
   15         F.S.; conforming provisions to changes made by the
   16         act; amending s. 627.715, F.S.; extending the
   17         expiration date of a provision authorizing surplus
   18         lines agents to export contracts or endorsements
   19         providing flood coverage to eligible surplus lines
   20         insurers without making a certain diligent effort to
   21         seek coverage from authorized insurers; providing
   22         effective dates.
   24  Be It Enacted by the Legislature of the State of Florida:
   26         Section 1. Subsection (4) of section 626.916, Florida
   27  Statutes, is amended to read:
   28         626.916 Eligibility for export.—
   29         (4) A reasonable per-policy fee, not to exceed $35, may be
   30  charged by the filing surplus lines agent for each policy
   31  certified for export. The fee must be itemized separately for
   32  the customer before purchase and enumerated in the policy.
   33         Section 2. Section 626.931, Florida Statutes, is amended to
   34  read:
   35         626.931 Agent affidavit and Insurer reporting
   36  requirements.—
   37         (1) Each surplus lines agent that has transacted business
   38  during a calendar quarter shall on or before the 45th day
   39  following the calendar quarter file with the Florida Surplus
   40  Lines Service Office an affidavit, on forms as prescribed and
   41  furnished by the Florida Surplus Lines Service Office, stating
   42  that all surplus lines insurance transacted by him or her during
   43  such calendar quarter has been submitted to the Florida Surplus
   44  Lines Service Office as required.
   45         (2) The affidavit of the surplus lines agent shall include
   46  efforts made to place coverages with authorized insurers and the
   47  results thereof.
   48         (1)(3) Each foreign insurer accepting premiums shall, on or
   49  before the end of the month following each calendar quarter,
   50  file with the Florida Surplus Lines Service Office a verified
   51  report of all surplus lines insurance transacted by such insurer
   52  for insurance risks located in this state during such calendar
   53  quarter.
   54         (2)(4) Each alien insurer accepting premiums shall, on or
   55  before June 30 of each year, file with the Florida Surplus Lines
   56  Service Office a verified report of all surplus lines insurance
   57  transacted by such insurer for insurance risks located in this
   58  state during the preceding calendar year.
   59         (3)(5) The department may waive the filing requirements
   60  described in subsections (1) (3) and (2) (4).
   61         (4)(6) Each insurer’s report and supporting information
   62  shall be in a computer-readable format as determined by the
   63  Florida Surplus Lines Service Office or shall be submitted on
   64  forms prescribed by the Florida Surplus Lines Service Office and
   65  shall show for each applicable agent:
   66         (a) A listing of all policies, certificates, cover notes,
   67  or other forms of confirmation of insurance coverage or any
   68  substitutions thereof or endorsements thereto and the
   69  identifying number; and
   70         (b) Any additional information required by the department
   71  or Florida Surplus Lines Service Office.
   72         Section 3. Paragraph (a) of subsection (2) of section
   73  626.932, Florida Statutes, is amended to read:
   74         626.932 Surplus lines tax.—
   75         (2)(a) The surplus lines agent shall make payable to the
   76  department the tax related to each calendar quarter’s business
   77  as reported to the Florida Surplus Lines Service Office, and
   78  remit the tax to the Florida Surplus Lines Service Office at the
   79  same time as the remittance required under s. 626.9325 provided
   80  for the filing of the quarterly affidavit, under s. 626.931. The
   81  Florida Surplus Lines Service Office shall forward to the
   82  department the taxes and any interest collected pursuant to
   83  paragraph (b), within 10 days of receipt.
   84         Section 4. Effective January 1, 2020, subsection (3) of
   85  section 626.932, Florida Statutes, is amended, and subsection
   86  (1) of that section is republished, to read:
   87         626.932 Surplus lines tax.—
   88         (1) The premiums charged for surplus lines coverages are
   89  subject to a premium receipts tax of 5 percent of all gross
   90  premiums charged for such insurance. The surplus lines agent
   91  shall collect from the insured the amount of the tax at the time
   92  of the delivery of the cover note, certificate of insurance,
   93  policy, or other initial confirmation of insurance, in addition
   94  to the full amount of the gross premium charged by the insurer
   95  for the insurance. The surplus lines agent is prohibited from
   96  absorbing such tax or, as an inducement for insurance or for any
   97  other reason, rebating all or any part of such tax or of his or
   98  her commission.
   99         (3) If a surplus lines policy covers risks or exposures
  100  only partially in this state and the state is the home state as
  101  defined in the federal Nonadmitted and Reinsurance Reform Act of
  102  2010 (NRRA), the tax payable must shall be computed on the gross
  103  premium. The surplus lines policy must be taxed in accordance
  104  with subsection (1) unless the policyholder elects to be taxed
  105  at the tax must not exceed the tax rate where the risk or
  106  exposure is located.
  107         Section 5. Paragraph (d) of subsection (1) of section
  108  626.935, Florida Statutes, is amended, and present paragraphs
  109  (e) through (i) of subsection (1) of that section are
  110  redesignated as paragraphs (d) through (h), respectively, to
  111  read:
  112         626.935 Suspension, revocation, or refusal of surplus lines
  113  agent’s license.—
  114         (1) The department shall deny an application for, suspend,
  115  revoke, or refuse to renew the appointment of a surplus lines
  116  agent and all other licenses and appointments held by the
  117  licensee under this code, on any of the following grounds:
  118         (d) Failure to make and file his or her affidavit or
  119  reports when due as required by s. 626.931.
  120         Section 6. Paragraph (a) of subsection (1) of section
  121  629.401, Florida Statutes, is amended to read:
  122         629.401 Insurance exchange.—
  123         (1) There may be created one or more insurance exchanges,
  124  with one or more offices each, subject to such rules as are
  125  adopted by the commission. For the purposes of this section, the
  126  term “exchange” applies to any such insurance exchange proposed
  127  or created under this section. The purposes of the exchange are:
  128         (a) To provide a facility for the underwriting of:
  129         1. Reinsurance of all kinds of insurance.
  130         2. Direct insurance of all kinds on risks located entirely
  131  outside the United States.
  132         3. Surplus lines insurance for risks located in this state
  133  eligible for export under s. 626.916 or s. 626.917 and placed
  134  through a licensed Florida surplus lines agent subject to
  135  compliance with the provisions of ss. 626.921, 626.922, 626.923,
  136  626.924, 626.929, 626.9295, and 626.930, and 626.931. With
  137  respect to compliance with s. 626.924, the required legend may
  138  refer to any coverage provided for by a security fund
  139  established under paragraph (3)(d).
  140         4. Surplus lines insurance in any other state subject to
  141  the applicable surplus lines laws of such other state for risks
  142  located entirely outside of this state.
  143         Section 7. Subsection (4) of section 627.715, Florida
  144  Statutes, is amended to read:
  145         627.715 Flood insurance.—An authorized insurer may issue an
  146  insurance policy, contract, or endorsement providing personal
  147  lines residential coverage for the peril of flood or excess
  148  coverage for the peril of flood on any structure or the contents
  149  of personal property contained therein, subject to this section.
  150  This section does not apply to commercial lines residential or
  151  commercial lines nonresidential coverage for the peril of flood.
  152  An insurer may issue flood insurance policies, contracts,
  153  endorsements, or excess coverage on a standard, preferred,
  154  customized, flexible, or supplemental basis.
  155         (4) A surplus lines agent may export a contract or
  156  endorsement providing flood coverage to an eligible surplus
  157  lines insurer without making a diligent effort to seek such
  158  coverage from three or more authorized insurers under s.
  159  626.916(1)(a). This subsection expires July 1, 2025 2019, or on
  160  the date on which the Commissioner of Insurance Regulation
  161  determines in writing that there is an adequate admitted market
  162  to provide coverage for the peril of flood consistent with this
  163  section, whichever date occurs first. If there are fewer than
  164  three admitted insurers on the date this subsection expires, the
  165  number of declinations necessary to meet the diligent-effort
  166  requirement shall be no fewer than the number of authorized
  167  insurers providing flood coverage.
  168         Section 8. Except as otherwise expressly provided in this
  169  act, this act shall take effect July 1, 2019.