Florida Senate - 2022                                    SB 1292
       
       
        
       By Senator Gruters
       
       
       
       
       
       23-01096A-22                                          20221292__
    1                        A bill to be entitled                      
    2         An act relating to fraud prevention; amending s.
    3         501.165, F.S.; requiring sellers to allow consumers to
    4         cancel in a specified manner and by specified means
    5         service contracts that have automatic renewal
    6         provisions; amending s. 626.854, F.S.; revising
    7         maximum fines for public adjusters and public adjuster
    8         apprentices for certain violations under a specified
    9         circumstance; revising maximum fines for certain
   10         violations by certain persons under a specified
   11         circumstance; amending s. 626.989, F.S.; redefining
   12         the term “active”; deleting provisions relating to
   13         circumstances under which investigations are
   14         considered active; authorizing the Department of
   15         Financial Services to impose an administrative fine on
   16         insurers under certain circumstances; authorizing the
   17         Division of Investigative and Forensic Services to
   18         adopt certain rules; amending s. 633.112, F.S.;
   19         redefining the term “active”; deleting provisions
   20         relating to circumstances under which investigations
   21         are considered active; amending s. 633.126, F.S.;
   22         authorizing the department to impose an administrative
   23         fine on insurance companies under certain
   24         circumstances; deleting criminal penalties;
   25         authorizing the division to adopt certain rules;
   26         amending s. 634.095, F.S.; revising requirements for
   27         advertisements issued or caused to be issued by
   28         service agreement companies or salespersons; amending
   29         s. 775.15, F.S.; revising felony violations for which
   30         prosecutions must be commenced within a specified
   31         timeframe; amending s. 817.234, F.S.; providing that
   32         certain insurers are entitled to recover specified
   33         expenses at the trial and appellate courts under
   34         certain circumstances; providing effective dates.
   35          
   36  Be It Enacted by the Legislature of the State of Florida:
   37  
   38         Section 1. Subsection (2) of section 501.165, Florida
   39  Statutes, is amended to read:
   40         501.165 Automatic renewal of service contracts.—
   41         (2) SERVICE CONTRACTS WITH AUTOMATIC RENEWAL PROVISIONS.—
   42         (a) A Any seller that sells, leases, or offers to sell or
   43  lease any service to a consumer pursuant to a service contract
   44  that has an automatic renewal provision, unless the consumer
   45  cancels that contract, shall disclose the automatic renewal
   46  provision clearly and conspicuously in the contract or contract
   47  offer.
   48         (b) A Any seller that sells or offers to sell any service
   49  to a consumer pursuant to a service contract the term of which
   50  is a specified period of 12 months or more and that
   51  automatically renews for a specified period of more than 1
   52  month, unless the consumer cancels the contract, shall provide
   53  the consumer with written or electronic notification of the
   54  automatic renewal provision. Notification shall be provided to
   55  the consumer no less than 30 days or no more than 60 days before
   56  the cancellation deadline pursuant to the automatic renewal
   57  provision. Such notification shall disclose clearly and
   58  conspicuously:
   59         1. That unless the consumer cancels the contract the
   60  contract will automatically renew.
   61         2. Methods by which the consumer may obtain details of the
   62  automatic renewal provision and cancellation procedure, whether
   63  by contacting the seller at a specified telephone number or
   64  address, by referring to the contract, or by any other method.
   65         (c) A seller that fails to comply with the requirements of
   66  this subsection violates is in violation of this subsection
   67  unless the seller demonstrates that:
   68         1. As part of the seller’s routine business practice, the
   69  seller has established and implemented written procedures to
   70  comply with this section and enforces compliance with the
   71  procedures;
   72         2. Any failure to comply with this subsection is the result
   73  of error; and
   74         3. As part of the seller’s routine business practice, where
   75  an error has caused the failure to comply with this subsection,
   76  the unearned portion of the contract subject to the automatic
   77  renewal provision is refunded as of the date on which the seller
   78  is notified of the error.
   79         (d) A seller shall allow a consumer to cancel a service
   80  contract that has an automatic renewal provision in the same
   81  manner, and by the same means, as the service contract was
   82  entered into.
   83         (e) This subsection does not apply to:
   84         1. A financial institution as defined in s. 655.005 or any
   85  depository institution as defined in 12 U.S.C. s. 1813(c)(2).
   86         2. A foreign bank maintaining a branch or agency licensed
   87  under the laws of any state of the United States.
   88         3. Any subsidiary or affiliate of an entity described in
   89  subparagraph 1. or subparagraph 2.
   90         4. A health studio as defined in s. 501.0125.
   91         5. Any entity licensed under chapter 624, chapter 627,
   92  chapter 634, chapter 636, or chapter 641.
   93         6. Any electric utility as defined in s. 366.02.
   94         7. Any private company as defined in s. 180.05 providing
   95  services described in chapter 180 which is competing against a
   96  governmental entity or has a governmental entity providing
   97  billing services on its behalf.
   98         (f)(e) A violation of this subsection renders the automatic
   99  renewal provision void and unenforceable.
  100         Section 2. Paragraphs (b) and (c) of subsection (22) of
  101  section 626.854, Florida Statutes, are amended, and paragraph
  102  (a) of that subsection is republished, to read:
  103         626.854 “Public adjuster” defined; prohibitions.—The
  104  Legislature finds that it is necessary for the protection of the
  105  public to regulate public insurance adjusters and to prevent the
  106  unauthorized practice of law.
  107         (22)(a) Any following act by a public adjuster, a public
  108  adjuster apprentice, or a person acting on behalf of a public
  109  adjuster or public adjuster apprentice is prohibited and shall
  110  result in discipline as applicable under this part:
  111         1. Offering to a residential property owner a rebate, gift,
  112  gift card, cash, coupon, waiver of any insurance deductible, or
  113  any other thing of value in exchange for:
  114         a. Allowing a contractor, a public adjuster, a public
  115  adjuster apprentice, or a person acting on behalf of a public
  116  adjuster or public adjuster apprentice to conduct an inspection
  117  of the residential property owner’s roof; or
  118         b. Making an insurance claim for damage to the residential
  119  property owner’s roof.
  120         2. Offering, delivering, receiving, or accepting any
  121  compensation, inducement, or reward for the referral of any
  122  services for which property insurance proceeds would be used for
  123  roofing repairs or replacement.
  124         (b) Notwithstanding the fine set forth in s. 626.8698, a
  125  public adjuster or public adjuster apprentice may be subject to
  126  a fine not to exceed $10,000 per act for a violation of this
  127  subsection and a fine not to exceed $20,000 per act for a
  128  violation of this subsection that occurs during a state of
  129  emergency declared by executive order or proclamation of the
  130  Governor pursuant to s. 252.36.
  131         (c) A person who engages in an act prohibited by this
  132  subsection and who is not a public adjuster or a public adjuster
  133  apprentice, or is not otherwise exempt from licensure, is guilty
  134  of the unlicensed practice of public adjusting and may be:
  135         1. Subject to all applicable penalties set forth in this
  136  part.
  137         2. Notwithstanding subparagraph 1., subject to a fine not
  138  to exceed $10,000 per act for a violation of this subsection and
  139  a fine not to exceed $20,000 per act for a violation of this
  140  subsection that occurs during a state of emergency declared by
  141  executive order or proclamation of the Governor pursuant to s.
  142  252.36.
  143         Section 3. Present subsections (7), (8), and (9) of section
  144  626.989, Florida Statutes, are redesignated as subsections (9),
  145  (10), and (11), respectively, new subsections (7) and (8) and
  146  subsection (12) are added to that section, and subsections (5)
  147  and (6) of that section are amended, to read:
  148         626.989 Investigation by department or Division of
  149  Investigative and Forensic Services; compliance; immunity;
  150  confidential information; reports to division; division
  151  investigator’s power of arrest.—
  152         (5) The office’s and the department’s papers, documents,
  153  reports, or evidence relative to the subject of an investigation
  154  under this section are confidential and exempt from the
  155  provisions of s. 119.07(1) until such investigation is completed
  156  or ceases to be active. For purposes of this subsection, the
  157  term an investigation is considered “active” has the same
  158  meaning as in s. 119.011(3)(d) while the investigation is being
  159  conducted by the office or department with a reasonable, good
  160  faith belief that it could lead to the filing of administrative,
  161  civil, or criminal proceedings. An investigation does not cease
  162  to be active if the office or department is proceeding with
  163  reasonable dispatch and has a good faith belief that action
  164  could be initiated by the office or department or other
  165  administrative or law enforcement agency. After an investigation
  166  is completed or ceases to be active, portions of records
  167  relating to the investigation shall remain exempt from the
  168  provisions of s. 119.07(1) if disclosure would:
  169         (a) Jeopardize the integrity of another active
  170  investigation;
  171         (b) Impair the safety and soundness of an insurer;
  172         (c) Reveal personal financial information;
  173         (d) Reveal the identity of a confidential source;
  174         (e) Defame or cause unwarranted damage to the good name or
  175  reputation of an individual or jeopardize the safety of an
  176  individual; or
  177         (f) Reveal investigative techniques or procedures. Further,
  178  such papers, documents, reports, or evidence relative to the
  179  subject of an investigation under this section shall not be
  180  subject to discovery until the investigation is completed or
  181  ceases to be active. Office, department, or division
  182  investigators shall not be subject to subpoena in civil actions
  183  by any court of this state to testify concerning any matter of
  184  which they have knowledge pursuant to a pending insurance fraud
  185  investigation by the division.
  186         (6) Any person, other than an insurer, agent, or other
  187  person licensed under the code, or an employee thereof, having
  188  knowledge or who believes that a fraudulent insurance act or any
  189  other act or practice which, upon conviction, constitutes a
  190  felony or a misdemeanor under the code, or under s. 817.234, is
  191  being or has been committed may send to the Division of
  192  Investigative and Forensic Services a report or information
  193  pertinent to such knowledge or belief and such additional
  194  information relative thereto as the department may request. Any
  195  professional practitioner licensed or regulated by the
  196  Department of Business and Professional Regulation, except as
  197  otherwise provided by law, any medical review committee as
  198  defined in s. 766.101, any private medical review committee, and
  199  any insurer, agent, or other person licensed under the code, or
  200  an employee thereof, having knowledge or who believes that a
  201  fraudulent insurance act or any other act or practice which,
  202  upon conviction, constitutes a felony or a misdemeanor under the
  203  code, or under s. 817.234, is being or has been committed shall
  204  send to the Division of Investigative and Forensic Services a
  205  report or information pertinent to such knowledge or belief and
  206  such additional information relative thereto as the department
  207  may require.
  208         (7)If an insurer fails or otherwise refuses to comply with
  209  this section, the department may impose an administrative fine
  210  of not more than $2,000 per day for such failure until the
  211  department deems the insurer to be in compliance.
  212         (8) The Division of Investigative and Forensic Services
  213  shall review such information or reports and select such
  214  information or reports as, in its judgment, may require further
  215  investigation. It shall then cause an independent examination of
  216  the facts surrounding such information or report to be made to
  217  determine the extent, if any, to which a fraudulent insurance
  218  act or any other act or practice which, upon conviction,
  219  constitutes a felony or a misdemeanor under the code, or under
  220  s. 817.234, is being committed. The Division of Investigative
  221  and Forensic Services shall report any alleged violations of law
  222  which its investigations disclose to the appropriate licensing
  223  agency and state attorney or other prosecuting agency having
  224  jurisdiction with respect to any such violation, as provided in
  225  s. 624.310. If prosecution by the state attorney or other
  226  prosecuting agency having jurisdiction with respect to such
  227  violation is not begun within 60 days of the division’s report,
  228  the state attorney or other prosecuting agency having
  229  jurisdiction with respect to such violation shall inform the
  230  division of the reasons for the lack of prosecution.
  231         (12)The Division of Investigative and Forensic Services
  232  may adopt reasonable rules as are necessary to administer this
  233  section. Such rules must meet all of the following requirements:
  234         (a)They may not enlarge upon or extend the provisions of
  235  this section.
  236         (b)They must identify specific factors that determine the
  237  grades of penalty.
  238         (c)They must specify mitigating and aggravating factors
  239  for a violation of this section.
  240         Section 4. Subsection (7) of section 633.112, Florida
  241  Statutes, is amended to read:
  242         633.112 State Fire Marshal; hearings; investigations;
  243  recordkeeping and reports; subpoenas of witnesses; orders of
  244  circuit court.—
  245         (7) The State Fire Marshal shall keep a record of all fires
  246  and explosions occurring in this state upon which she or he had
  247  caused an investigation to be made and all facts concerning the
  248  same. These records, obtained or prepared by the State Fire
  249  Marshal pursuant to her or his investigation, include documents,
  250  papers, letters, maps, diagrams, tapes, photographs, films,
  251  sound recordings, and evidence. These records are confidential
  252  and exempt from the provisions of s. 119.07(1) until the
  253  investigation is completed or ceases to be active. For purposes
  254  of this section, the term an investigation is considered
  255  “active” has the same meaning as in s. 119.011(3)(d) while such
  256  investigation is being conducted by the department with a
  257  reasonable, good faith belief that it may lead to the filing of
  258  administrative, civil, or criminal proceedings. An investigation
  259  does not cease to be active if the department is proceeding with
  260  reasonable dispatch, and there is a good faith belief that
  261  action may be initiated by the department or other
  262  administrative or law enforcement agency. Further, these
  263  documents, papers, letters, maps, diagrams, tapes, photographs,
  264  films, sound recordings, and evidence relative to the subject of
  265  an investigation are shall not be subject to subpoena until the
  266  investigation is completed or ceases to be active, unless the
  267  State Fire Marshal consents. These records shall be made daily
  268  from the reports furnished the State Fire Marshal by her or his
  269  agents or others.
  270         Section 5. Subsection (9) of section 633.126, Florida
  271  Statutes, is amended, subsection (10) is added to that section,
  272  and subsection (2) of that section is republished, to read:
  273         633.126 Investigation of fraudulent insurance claims and
  274  crimes; immunity of insurance companies supplying information.—
  275         (2) If an insurance company has reason to suspect that a
  276  fire or explosion loss to its insured’s real or personal
  277  property was caused by intentional means, the company shall
  278  notify the State Fire Marshal and shall furnish her or him with
  279  all material acquired by the company during its investigation.
  280  The State Fire Marshal may adopt rules to implement this
  281  subsection.
  282         (9) If an insurance company fails or otherwise refuses to
  283  comply with this section, the department may impose an
  284  administrative fine of not more than $2,000 per day for such
  285  failure until the department deems the insurance company to be
  286  in compliance A person who willfully violates this section
  287  commits a misdemeanor of the first degree, punishable as
  288  provided in s. 775.082 or s. 775.083.
  289         (10)The Division of Investigative and Forensic Services
  290  may adopt reasonable rules as are necessary to administer this
  291  section. Such rules must meet all of the following requirements:
  292         (a)They may not enlarge upon or extend the provisions of
  293  this section.
  294         (b)They must identify specific factors that determine the
  295  grades of penalty.
  296         (c)They must specify mitigating and aggravating factors
  297  for a violation of this section.
  298         Section 6. Effective January 1, 2023, present paragraphs
  299  (b), (c), and (d) of subsection (3) of section 634.095, Florida
  300  Statutes, are redesignated as paragraphs (d), (e), and (f),
  301  respectively, new paragraphs (b) and (c) are added to that
  302  subsection, and paragraph (a) of that subsection is amended, to
  303  read:
  304         634.095 Prohibited acts.—Any service agreement company or
  305  salesperson that engages in one or more of the following acts
  306  is, in addition to any applicable denial, suspension,
  307  revocation, or refusal to renew or continue any appointment or
  308  license, guilty of a misdemeanor of the second degree,
  309  punishable as provided in s. 775.082 or s. 775.083:
  310         (3) Issuing or causing to be issued any advertisement that
  311  which:
  312         (a) Does not fully disclose in a written advertisement, in
  313  at least 12-point, boldface boldfaced type, the name, address,
  314  and Florida Company Code license number of the service agreement
  315  company.
  316         (b)Does not fully disclose in a radio or television
  317  advertisement the full legal name of the licensed salesperson or
  318  the service agreement company.
  319         (c)Does not fully identify the soliciting licensed
  320  salesperson’s full legal name and license number when the
  321  salesperson begins, and the soliciting salesperson’s telephone
  322  number when the salesperson concludes, each telephone
  323  solicitation. For the purposes of this paragraph, the actual
  324  telephone number of the salesperson may be the number on file
  325  with the department or the number at which the salesperson may
  326  be contacted.
  327         Section 7. Subsection (11) of section 775.15, Florida
  328  Statutes, is amended to read:
  329         775.15 Time limitations; general time limitations;
  330  exceptions.—
  331         (11) A prosecution for a felony violation of s. 440.105 or
  332  s. 817.234 ss. 440.105 and 817.234 must be commenced within 5
  333  years after the violation is committed.
  334         Section 8. Subsection (5) of section 817.234, Florida
  335  Statutes, is amended to read:
  336         817.234 False and fraudulent insurance claims.—
  337         (5)(a) Any insurer damaged as a result of a violation of
  338  any provision of this section when there has been a criminal
  339  adjudication of guilt shall have a cause of action to recover
  340  compensatory damages, plus all reasonable investigation and
  341  litigation expenses, including attorney attorneys’ fees, at the
  342  trial and appellate courts.
  343         (b)If an insurer damaged as a result of a violation of any
  344  provision of this section has reported the possible fraudulent
  345  insurance act to the Division of Investigative and Forensic
  346  Services pursuant to s. 626.9891 and if there has been a
  347  criminal adjudication of guilt, the insurer is entitled to
  348  recover reasonable investigation and litigation expenses,
  349  including attorney fees, at the trial and appellate courts.
  350         Section 9. Except as otherwise expressly provided in this
  351  act, this act shall take effect upon becoming a law.